Turkcell drops US-based lawsuit against MTN over Iran licence loss

Turkcell has dropped a lawsuit it was filing in the US claiming MTN Group used bribery to deprive it of its Iranian mobile network licence in 2005.

Turkcell said that it is dropping the case because of an earlier Supreme Court ruling on the Alien Tort Statute, which limits lawsuits in the US affecting companies that predominantly operate overseas.

MTN had long argued that any dispute between South African and Turkish companies, over an Iranian issue should not be held in the US.

Turkcell’s lawsuit in the US had been put on hold while the Supreme Court deliberated on an unrelated case affecting the Shell oil company. Shells’ victory in that case undermined Turkcell’s argument to have its case heard in the US.

Turkcell was suing MTN for US$4.2 billion in damages over how its Iranian mobile licence was cancelled and later awarded to the South African company.

MTN, through one of its subsidiaries, owns a 49 per cent shareholding in Irancell, which holds the second GSM licence in Iran. The remaining 51 per cent in the cellco is owned and controlled by Iran Electronic Development Company (IEDC).

Turkcell and its subsidiary, East Asian Consortium (EAC) was originally awarded the licence in 2003.

Turkcell’s near 70 per cent stake was reduced to 49 per cent by the Iranian government in 2005, and by June of that year, the Iranian government had cancelled Turkcell’s licence and started talks with MTN for the concession.