Cukurova Finance International v Alfa Telecom Turkey
Further proceedings in Cukurova Finance International Limited and another (Appellants) v Alfa Telecom Turkey Limited (Respondents)
18 June 2014
Reference should be made to the Board's decision on 9 July 2013.
The proceedings before the Board on 16 June 2014 arose out of litigation which has continued for some years following a loan agreement between the parties. Alfa's loan to Cukurova had been secured on shares which Cukurova held and, in default of repayment of the loan, Alfa appropriated the shares in April 2007. The Board decided that Alfa had been entitled to appropriate the shares but that Cukurova were entitled to relief from forfeiture. In July 2013 the Board decided that Cukurova should be permitted to recover the shares on condition that they paid a sum in excess of US$1,500,000,000 to Alfa within 60 days plus interest. Cukurova subsequently applied for the terms of the repayment to be varied and Alfa applied for a cut-off date to be set for the payment of the redemption sum. The hearing on 16 June was concerned with the grant of a proposed new charge not the redemption of the existing charge.
On 16 June the Judicial Committee was asked to deal with the following issues.
- Whether Alfa should co-operate in the creation of a legal mortgage in favour of Cukurova's new lender.
- Whether the Board should grant further time beyond the 60 day period set for the redemption of shares and which is due to expire on 24 June 2014.
- Whether the Board should stop interest during any extended period.
Having heard submissions from the parties, the Board outlined what it proposed to order but gave the parties the opportunity to take instructions in relation to the first point. On the question whether the proposed grant of a legal mortgage is permitted and would give rise to Alfa's pre-emption rights, the Board indicated that the conditions suggested by Alfa seemed sensible, although the Board suggested modifications to two of the conditions which Alfa proposed. In relation to the two other points, the Board indicated that it would decide to extend time until 30 July 2014 and that interest should continue to run during that period.
The parties are seeking to agree an order which will then be submitted to the Board for approval and published here on the JCPC website in due course.