The Privy Council, one of Britain’s oldest institutions, whose members are appointed by the Queen, has ruled that Altimo, the telecoms arm of Russia’s Alfa Group, had been entitled to appropriate a contentious 13.76% stake in Turkcell from Turkey’s Cukurova Group, after the latter defaulted on a USD1.35 billion loan back in 2005. However, the Privy Council stressed that Cukurova, which is owned by Turkish tycoon Mehmet Emin Karamehmet, should have an opportunity to redeem the shares ‘on appropriate conditions’.
According to Reuters, in the Privy Council’s ‘complex’ 36-page ruling it rejected Cukurova’s argument that it had not defaulted on the loan, adding that Altimo had been entitled to accelerate the terms of the loan and seize Turkcell’s shares. However, the Council’s Judicial Committee has asked the feuding parties for more information and says that it will make a further decision at an unspecified date. This ruling is expected to relate to the terms upon which Cukurova can redeem the shares.
Described by Reuters as ‘an arcane British appeals court’, the Privy Council is hearing the case because Cukurova Holding is registered in the British Virgin Islands (BVI). The Council was formerly a supreme court of appeal for the entire British Empire (other than for the United Kingdom itself), and continues to hear appeals from the Crown Dependencies, the British Overseas Territories, and a number of Commonwealth member countries.