A UK court has thrown out an appeal by Turkey’s Cukurova Holding against an order that it must pay more than $1 billion in damages to TeliaSonera – the latest instalment in the two companies’ epic fight for control of Turkcell, the country’s leading mobile operator.
The Privy Council has dismissed Cukurova’s appeal against an order from a Swiss court that it must pay $932 million in damages to TeliaSonera, following its failure to act on a 2005 agreement to sell its indirect stake in Turkcell. The final figure, including interest, is over $1 billion.
In March 2005, Cukurova and TeliaSonera struck an agreement about the potential purchase by the latter of Cukurova’s 53-per-cent stake in Turkcell Holding, which in turn holds 51 per cent of Turkcell.
Then in May 2005 Cukurova announced it would not sell its shares, which led TeliaSonera to launch arbitration proceedings against the Turkish company.
The arbitration tribunal made a final award of $932 million against Cukurova in September 2011.
TeliaSonera applied to the High Court in the British Virgin Islands for permission to enforce the award (the relevant Cukurova subsidiary was incorporated in the British Virgin Islands).
The High Court granted permission and increased the damages, including interest, to over $1 billion.
But the Turkish company launched an appeal, a process that ended up in the UK’s Privy Council, which is the final court of appeal for many Commonwealth countries.
Last month, Cukurova scored a victory in the US where a court ruled that TeliaSonera could not enforce the $932 million arbitration award. But this week has seen a setback for the Turkish firm.