Telsim 2, Motorola 0

Turkish mobile operator Telsim has won the latest round of its ongoing acrimonious spat with US-based vendor Motorola [MOT]. According to the cellco, the Geneva Court of Justice has ruled in its favour in deciding that Motorola failed to properly establish a case against the Turkish company’s owners, the Uzan family. In the Court’s opinion, the US company did not prove its allegation that it had been defrauded by the Uzans, nor did it convince them it had actually suffered damages as a result. It also rejected Motorola’s appeal against a previous edict blocking its moves to pursue the Uzans directly. Telsim’s chief executive Hakan Uzan welcomed the ‘significant ruling’ which he said acknowledged the fact that Telsim had become victim to a series of mitigating events including the collapse of the Turkish lira, economic recession and a legal requirement for it to issue additional share capital which forced it to reschedule its dollar denominated loans. He went on to say that he hoped the ruling would convince Motorola to ‘give up the legal actions it pursues under US laws and, instead, stand by multiple agreements to settle this dispute by arbitration in Switzerland’.

Relations between Telsim and Motorola soured in late May this year when the US firm hit back at accusations that its owners had made ‘false allegations and misrepresent[ed] the facts of their fraudulent behaviour’. In what became a most public dispute, Telsim placed a series of adverts in US newspapers accusing Motorola of failing to disclose its vendor financing exposure to shareholders. The two companies became embroiled in a legal argument after the Turkish company defaulted on USD2 billion of loans received in the late 1990s. However, Motorola hit back claiming that the adverts were just the latest attempt to muddy the waters to hide the fact that the Uzan family, which controls the Turkish operator, had stolen the money. At the time a spokesman for Motorola brushed aside the charges saying that ‘their veiled threats are simply an effort to cover their fraudulent and unethical behaviour and have become increasingly outrageous and unacceptable’.