Cukurova Finance International Limited and
Cukurova Holding AS (Appellants) v Alfa Telecom Turkey Ltd (Respondent)
Kenneth MacLean Q.C. leading James Nadin and David Caplan of One Essex Court and Arabella Di Iorio of Maples and Calder represented Cukurova Holding and Cukurova Finance International before the Privy Council in their successful appeal against the decision of the Court of Appeal of the Eastern Caribbean Supreme Court (HCVAP 2010/018 - 20 July 2011). The successful appeal represents the culmination of nearly six years of hard-fought litigation between the Cukurova Group of Turkey and the Alfa Group of Russia concerning ownership and control of Turkcell, the largest mobile phone company in Turkey. This ground-breaking decision establishes that the court’s power to grant relief from forfeiture applies to mortgages of financial instruments (such as shares) which fall within the ambit of the Financial Collateral Arrangements (No 2) Regulations 2003 and that such relief may be granted where the collateral taker exercises a power of appropriation over the collateral.
Given the proliferation of financial collateral arrangements containing a power of appropriation, the decision will be required reading for collateral takers, particularly for those pursuing a so-called “loan-to-own” strategy.