Sweden’s TeliaSonera has asked the US Supreme Court to review a lower court decision, which reversed a previous ruling over a US$932m damages award for a failed sale of Turkcell shares.
A federal appeals court in New York last month overturned a state…
Sweden’s TeliaSonera has asked the US Supreme Court to review a lower court decision, which reversed a previous ruling over a US$932m damages award for a failed sale of Turkcell shares.
A federal appeals court in New York last month overturned a state district court decision freezing the assets of Turkey’s Cukurova Holding until it paid the US$932m damages award to TeliaSonera, saying it did not have jurisdiction over the case.
The appeals court decided Cukurova, controlled by Turkish businessman Mehmet Emin Karamehmet, did not have “sufficient contacts with New York to render it at home”.
With interest, the amount owed now totals about US$1bn.
TeliaSonera has submitted a petition for a writ of certiorari in the supreme court, alleging that the appeals court misapplied jurisdictional standards, a spokesperson for the telco confirmed.
The dispute dates back to 2005 when Cukurova negotiated the sale of shares in Turkcell to a Dutch unit of TeliaSonera and then did not deliver them.
A Swiss arbitrational tribunal for the International Chamber of Commerce (ICC) decided the parties had concluded a share purchase agreement and ordered Cukurova to pay the Dutch unit, Sonera, US$932m in damages. Sonera then filed applications to enforce the judgement in several jurisdictions, including New York, the British Virgin Islands, Switzerland and the Netherlands.
In the UK, the Privy Council this month dismissed Cukurova’s appeal against the damages award, saying the UK Court of Appeal had been right to conclude that the tribunal had the jurisdiction to make the award and that Cukurova had ample opportunity to present its case.
Asked when TeliaSonera expects the dispute to finally be resolved, the company spokesperson said: “Nine years on, we have learnt from experience not to forecast when this can all be sorted out.
“Our top priority is to get ordinary corporate governance in place for Turkcell.”
The dispute between Turkcell’s three major shareholders, which also include Russian investment firm Altimo, has prevented it from holding an AGM and paying dividends since 2010. The 2014 AGM is set for 29 May.
In a separate court battle, Cukurova has until the end of June to pay about US$1.6bn to Altimo, part of oligarch Mikhail Fridman’s Alfa Group, to recover a 13.8% stake in Turkcell that would see it regain control of the mobile operator.
The US appeals court 25 April decision kick-started a 60-day deadline set by the Privy Council for Cukurova to make the payment.
Questions have been raised over whether Cukurova will be able to meet the deadline. The Turkish company is reportedly seeking a loan of about US$1.6bn to recover the stake. If it is successful, analysts have said Turkcell might finally be able to distribute dividends.
