Turkish mobile operator Turkcell has launched a lawsuit in South Africa against MTN Group, seeking damages for losses it allegedly suffered in Iran.
Last year, Turkcell withdrew a $4.2 billion lawsuit against MTN group in a U.S. court after the Supreme Court ruled that U.S. courts have no jurisdiction over cases brought by foreign corporations involving alleged corporate misconduct that took place outside the country.
Turkcell claimed it filed the lawsuit against MTN in the U.S. because both companies have extensive business dealings in the U.S. and because it alleged that MTN breached international law.
But Turkcell has now re-filed its lawsuit against MTN in South Gauteng High Court in Johannesburg, South Africa, seeking compensation for damages the company allegedly suffered in Iran. MTN is a South African owned and headquartered telecom company but has a presence in 22 countries in Africa, Asia and the Middle East.
MTN is facing corruption allegations over its dealings in Iran, where according to Turkcell it bribed officials to acquire a telecom license. MTN denied the charges and last year appointed a committee of investigators, chaired by retired British Judge Leonard Hoffman, which cleared it of the allegations.
Turkcell alleges that in 2004, MTN improperly paid bribes to South African and Iranian government officials to win the Iranian telecom license in 2005. The license had initially been awarded to Turkcell by Iranian authorities after a tender in 2003.
Turkcell was, however, prevented from securing the license and instead MTN, which had submitted a run-up bid, received it.
Turkcell also accuses MTN of promising Iran that MTN could deliver a South African vote at the International Atomic Energy Agency (IAEA) in support of the country's controversial nuclear program.
Turkcell's allegations come against the backdrop of forceful economic sanctions from Western countries, designed to deter Iran from perusing its nuclear development program. MTN has not been able to repatriate money out of Iran since last year when the new rounds of sanctions were imposed by the U.S. and the E.U. over the country's nuclear program.
Backed by a collection of alleged MTN internal documents including e-mails, invoices, memos and presentations, Turkcell accused MTN of a "staggeringly brazen orchestra of corruption."
MTN insists it was not the cause of Turkcell losing the license in Iran.
"MTN continues to believe that there is no legal merit to Turkcell's claim and will accordingly oppose it," said Xolisa Vapi, MTN corporate affairs in a statement Wednesday.
The company believes Turkcell's own "failure to meet Iranian legal and commercial requirements" caused its exit from the license process.
The Iranian unit is MTN's fastest growing affiliate, with over 34 million subscribers. MTN has a 49 percent share in Irancell, owned and operated by the Iran Economic Development Company.