Analysis: Turkcell faces battle to bring MTN case in U.S

Tue Apr 10, 2012 11:25am EDT
 
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By David Dolan and Tiisetso Motsoeneng

JOHANNESBURG (Reuters) - Turkish mobile operator Turkcell (TCELL.IS: Quote) may struggle to make its case against MTN Group (MTNJ.J: Quote) in a $4.2 billion legal battle over an Iranian mobile network license that hinges on U.S. human rights law.

Turkey's biggest mobile firm filed the suit against MTN in a Washington court last month on the grounds that MTN's significant U.S. business meant the case could be heard there.

In so doing it hopes to show that MTN breached U.S. and international law relating to bribery and trading in influence, at a time when relations between the United States and Iran are particularly tense over the latter's nuclear program.

Turkcell was initially awarded the Iranian license in 2004 before a disagreement over the terms of the deal prompted an about-face by Tehran, which made a deal with MTN a year later.

The Turkish firm says MTN lobbied the South African government to support Tehran's nuclear program in exchange for winning the contract, and bribed officials from both governments. Iran is a huge growth market for mobile telecoms, as reflected in the size of Turkcell's claim for damages.

Turkcell's lawyer, Read McCaffrey of Patton Boggs LLP, says the nature of the charges and the extent of MTN's business in the U.S. makes the case applicable to a U.S. court.

MTN's shares also trade as American Depository Receipts and the company also sells airtime and offers roaming services to U.S. customers.

But several U.S. legal experts, including one due to argue a related case at the Supreme Court this year, say Turkcell may not get far with the suit because the case has only tenuous links to the United States.   Continued...