Cukurova Finance International Ltd v Alfa Telecom Turkey Limited
In its third judgment since January 2013 (and the fifth since 2009) the Privy Council has acceded to Cukurova’s application to vary the terms upon which Cukurova is entitled to recover its controlling interest in Turkcell, the leading mobile phone company in Turkey, from Alfa Telecom Turkey Limited (‘ATT’). Her Majesty’s Order in Council dated 10 July 2013 set the financial terms for Cukurova to recover its indirect interest in Turkcell and required Cukurova to pay ATT within 60 days. However, ATT caused a series of steps to be taken in the New York courts and elsewhere in the name of a third party, Sonera, whose overriding aim, as Lord Neuberger giving the judgment of the Board said, ‘has been and is simply to thwart redemption in ATT’s own interests’.
The Board accepted that it had jurisdiction to vary the terms on which relief was given referring to the cases of Chandless-Chandless v Nicholson [1942] 2 KB 321 and Starside Properties Ltd v Mustapha [1974] 1 WLR 816 and holding that the test to be applied was whether it was just and equitable to do so. The Board also concluded that it had the power to make the order itself as opposed to taking the usual course of advising Her Majesty that an order should be made, relying on Belize Alliance of Conservation Non-Governmental Organisations v Department of the Environment of Belize (Practice Note) [2003] UKPC 63, [2003] 1 WLR 2839, para 33. In that case Lord Walker of Gestingthorpe, delivering the judgment of the Board, said that the Board has jurisdiction to grant interim relief “in order to ensure that any order which it makes on the eventual hearing of the appeal should not be rendered nugatory”. The Board agreed that the power to vary the terms of relief in this case must be taken to have been conferred by Parliament in the Judicial Committee Acts of 1833 and 1843 as being necessary for the proper exercise of its appellate jurisdiction.
In the light of the steps taken by ATT in New York to thwart Cukurova’s redemption of the indirect interest in Turkcell the Board ordered that the time limit for Cukurova to redeem the shares be extended from 60 days from 9 July 2013 for an indefinite period (with liberty to either side to apply) and that ATT’s entitlement to on-going interest should be stopped from 30 July 2013. Since interest was accruing under the Order in Council at the rate of over US$370,000 per day in ATT’s favour prior to the Board’s latest judgment, this represents a significant additional victory for Cukurova.
As in the previous hearings before the Board, Kenneth MacLean Q.C. leading James Nadin and David Caplan represented Cukurova, instructed by White & Case.
A full text of the Judgment is available here.