"Any dispute, controversy or claim arising out of or in connection with this Agreement, if not amicably resolved by the Parties within 60 days of notification thereof, shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce (the "ICC Rules"), except as such ICC Rules may be modified below.
(a) The place of arbitration shall be Geneva, Switzerland.
(b) The language of the arbitration shall be English.
(c) Each Party to the dispute, controversy or claim in question shall nominate one arbitrator within the time limit fixed by the ICC Rules, and the two-party-nominated arbitrators shall agree on the third arbitrator within 30 days of their appointment by the International Court of Arbitration of the International Chamber of Commerce (the "ICC Court"), failing which the third arbitrator shall be appointed by the ICC Court. Where there are multiple claimants or multiple defendants, said multiple claimants or defendants shall jointly nominate an arbitrator within the time limit fixed by the ICC Rules, and the two party-nominated arbitrators shall agree on the third arbitrator within 30 days of their appointment by the ICC Court; provided, however, that if the multiple claimants or the multiple defendants do not agree on a jointly-nominated arbitrator within the time limit fixed under the ICC Rules, such appointment shall be made by the ICC Court.
(d) Any award of the arbitral tribunal shall be final and binding on the Parties. The Parties hereby waive any rights to appeal any arbitration award to, or seek determination of any question of law arising in the course of arbitration from, jurisdictional courts.
(e) Any award of the arbitral tribunal may be enforced by judgment or otherwise in any court having jurisdiction over the award or over the person or the assets of the owing Party or Parties. Applications may be made to such court for judicial recognition of the award and/or an order for enforcement, as the case may be."
1. The Arbitral Tribunal has jurisdiction to award the claims made by the Claimant in these proceedings;
2. The Final Share Purchase Agreement was validly concluded on 9 May 2005 between the Claimant and the First Respondent, in the version communicated to the Respondents on 19 April 2005 and this agreement remains in full force and effect;
3. The First Respondent is obligated to join the Claimant in good faith efforts to bring about Closing under the Final Share Purchase Agreement;
4. The Tribunal remains seized of the matter until the Parties report on the outcome of their efforts to reach Closing under the Final Share Purchase Agreement and any claims then brought before the Tribunal have been resolved;
5. The conclusion of the Share Purchase Agreement does not relieve the First Respondent of the liability which it may have as a result of its failure to execute the Final Share Purchase Agreement and to proceed to Closing;
6. Both Respondents, jointly and severally, are ordered to pay to the Claimant US$ 118’614 as compensation for its legal costs concerning the proceedings on jurisdiction;
7. All other claims are reserved.
1. The First Respondent must deliver to the Claimant all of the 241’428’330 Class B Shares of Turkcell Holding representing all of the outstanding Class B shares against the payment of US$ 3’103761’647;
2. The Tribunal determines the value of the Shares on 30 June 2007 at US$ 1’809 million;
3. The Claimant’s claim for damages is reserved;
4. The claims for arbitration costs are reserved.
Claimant respectfully requests that the Tribunal award damages to the Claimant in an amount not less than $1’809 million, plus interest according to the rates reported by the Turkish State-Owned Banks to the Turkish Central Bank from 30 June 2007 until the date that Respondent pays the damage amount to Claimant.
Claimant respectfully requests that the Tribunal order Respondent to pay Claimant USD $7’788’182.14 which represents the total costs that Claimant incurred in this arbitration through 30 September 2010.
The cost claim was increased to US$ 7’982’357.88 by a submission of 22 December 2010.
1. The Competition Board refused to grant the requested authorisation;
2. The Claimant never filed an application with the Capital Market Board;
3. The Telecommunication Authority to which the Claimant did apply never replied.
• US$ 10.97 billion on 23 May 2005,38
• US$ 15,479 billion on 30 June 2007,39
• US$ 18,832 billion on 21 September 2007,40
• US$ 26,019 billion on 16 December 2007,41
• US$ 11,505 billion on 30 June 2008,42
• US$ 14,106 billion on 19 November 2009,43
13.07% the Claimant directly,
24.02% the Claimant indirectly through its share in Turkcell Holding,
4.22% Çukurova Group directly (according to Mr Osborne the Group held 13.3%),
26.98% Çukurova Group indirectly, through its share in Turkcell Holding; this is the share in Turkcell (held indirectly through the Holding) which the Claimant would have gained by the transaction,
31.71% Others (according to Mr Osborne 22.6%), of which 16.3% free float.
"Nach dem klaren Willen des Gesetzgebers ist bei Wahl von Schadenersatz wegen Nichterfüllung das Erfüllungsinteresse des Verzugsgläubigers zu befriedigen; der Verzugsgläubiger soll vermögensmässig so gestellt werden, wie wenn die primär geschuldete Leistung rechtzeitig erbracht worden wäre. Der Ersatz des Leistungswerts (Nr. 621) allein stellt den Verzugsgläubiger indessen vielfach noch nicht in die gleiche Lage, wie wenn rechtzeitig erüllt worden wäre: Es verhält sich gleich wie bei einer verspäteten Erfüllung; hier hat der Verzugsschuldner zusätzlich zur verspäteten Leistung den Schaden zu ersetzen, der dem Verzugsgläubiger aus der Verspätung erwächst (Art. 103 Abs. 1; vgl. auch Art. 107 Abs. 2 erster Teil). Bei der Wahl von Schadenersatz wegen Nichterfüllung hat der Verzugsschuldner zusätzlich zum Leistungswert, der als Ersatz für die ausgebliebene Leistung geschuldet ist, den weiteren Schaden zu ersetzen, der dem Verzugsgläubiger durch die Verspätung adäquat verursacht wurde."67
"According to the clear intention of the legislator, whenever the obligee has selected damages for non-performance, its interest in the performance of the transaction ["Erfüllungsinteresse"] must be satisfied; the obligee must be put into the financial position it would have been in had the primary obligation owed been satisfied in a timely manner. The compensation for the value of the performance (No 621) alone, however, in many cases does not put the obligee into the same position it would have been in in the event of timely performance: the situation must be treated as that of late performance; here the defaulting obligor, in addition to making the late performance, is liable for damages due to the late performance (Art. 103 para. 1; see also Art. 107 para 2 first part). When the obligee has opted for damages for non-performance, the obligor, in addition to being liable for the value of the performance that is owed in compensation for the missing performance, must compensate the obligee for its further damage adequately suffered as a result of the delay."
"The date on which the undertaken obligation should have been performed is taken into account for calculation of the positive damages. In other words, the Damage is calculated on the date on which the debtor goes into default. The prevailing scholar opinion is also in line with the practice explained above (Prof. Dr. M. Kemal Oguzman - Prof. Dr. M. Turgut Öz, Law of Obligations - General Provisions; Second Edition, p. 374, 393; Ord. Prof. Dr. H. V. Veliededeoglu - R. Özdemir, Commentaries of Turkish Code of Obligations, 1987, p. 246; Von Tuhr, Law of Obligations, Volume 1, 1952, p. 674; Prof. Dr. H. Tandogan, Private Obligation Relations, Volume 2, Ankara 1987, p. 502; Prof. Dr. Kemal Dayinlarli, Constructor’s and Owner’s Default in Construction Contracts, Ankara 2003, p. 89). The established practice of our Circuit is also in line with the "prevailing opinion" stated among the scholars".72
"The fundamental value is defined as the value that the equity would have had at that date [21 September 2007; based on information as of 30 June 2007] (using all available and relevant information) were the firm managed and operated to its full potential."74
He described the fundamental value as "a measure of the long-term value of the company".75 The valuation proceeded by way of a "customary discounted cash flow analysis",76 relying on forecasts of cash flows that each business unit was expected to generate for 11 years (from 2007 until 2017) which were then discounted back to 30 June 2007 to obtain the present value of the business.77
"... beginning on 19 September 2007 and continuing until 23 April 2008 (and intermittently thereafter until 2 June 2008), the market capitalisation of Turkcell exceeded its fundamental value as of 21 September 2007."80
"... is consistent with economic theory which provides that when the market price significantly exceeds the perceived value of an asset, what a rational economic entity once considered to be a long term investment may become an attractive asset for sale."
"To be conservative, we have not done so. For broader strategic reasons that we do not consider in this report, Sonera may choose to continue to hold its stake even though it is apparently more rational to sell. However, it is important to note that were the market capitalisation to continue to increase significantly, the profit that Sonera would earn from selling might outweigh these strategic reasons..."89
"THE CHAIRMAN: The problem I see now would be double. One would be that you can’t flood the market with the full lot of shares you have, because otherwise you destroy the prices; and the second, the buyers, if you sell in this manner [in small quantities, "drop by drop"], are not interested in your control premium.
MR. OSBORNE: Correct."99
"... would have held a 100% ownership of an unlisted company that had a majority (51%) ownership in a publicly listed company. Combining this stake with Sonera's existing direct stake of 13.07% would have allowed Sonera to create a large block of shares that could have been sold to an investor interested in obtaining the control of the public company."100
"Mr Osborne does not deny that non-marketability discounts exist and are used in valuing assets. In fact Mr Osborne believes illiquidity to be an important concept to consider in identifying a fair market value of an asset."101
In his Report he states:
"There is a large body of empirical data that supports the hypothesis that, even for otherwise identical assets, restrictions on the ability of an investor to sell a given asset can result in a discount on the price that the investor will be prepared to pay for that asset.
The presence or absence of liquidity is therefore relevant to any consideration of the value of an asset in the context of a potential sale, since it affects the fair market value of the asset."102
But Mr Osborne contests that this consideration is relevant here since Sonera had no intention to sell the Shares held indirectly through the Holding.
"Analysis of share price movements of the kind that [Professor Lind] describes is neither as quantitatively precise nor as clear in its implications as he suggests. I do not believe that his results can sensibly be used to assist in the valuation of Sonera's loss of opportunity to purchase Çukurova’s shares in Turkcell."108
"Even though the calculation of fundamental value was as of 21 September 2007, it was based on information as of 30 June 2007, since that was the date of the most recent publically available financial information for Turkcell. I explained in the Statement that any changes in the fundamental value between 30 June 2007 and 21 September 2007 were immaterial for purposed of the valuation."120
"In case any higher contractual or default interest rate is not set forth in the agreement, the highest interest rate paid by the State Owned Banks for one year term deposit accounts opened in the currency of the debt shall be applicable."129
"The Court should ask Bank XXX and according to the results obtained, it should determine the applicable interest rate and decide that interest must be calculated according to such applicable interest rate."132
In a decision of 8 March 1999 the Supreme Court of Appeals held
"... while the rates to be paid for the one-year term deposit on this same currency must be determined from the State-Owned Banks and the judgment must be render on the result thereof..."133
In yet another decision, dated 11 February 2002 the Supreme Court of Appeals held that
"The court had to enquire the highest interest rate paid by the state owned banks to one year deposit accounts opened with German Marks, and it should order the collection of the receivables of the plaintiff together with such determined interest rate..."
In that case, the court below had relied on "the highest interest rate applied by the Central Bank to the foreign currency" and the Supreme Court found that this judgment was against the law.134
(i) attorneys’ fees and expenses for
(a) Sullivan & Cromwell in an amount of US$ 3’4877'78, including US$ 163’565 claimed in December 2010,
(b) Hergüner Bilgen Özeke, including the costs and fees for the experts Dr Kaballioglu and Dr Budak, in an amount of US$ 1’169’900 and including US$ 8700 claimed in December 2010,
(c) Bär & Karrer in an amount of US$ 266’231.89;
(ii) fees and expenses of the Claimant’s other experts, viz.
(a) Professor Robert Lind in an amount of US$ 1’850’527, including US$ 22’211 claimed in December 2011,
(b) Mr Arco Verhulst (KPMG) in an amount of US$ 34'222 and
(c) Mr Leon Coskun in an amount of US$ 104’409;
(iii) Expenses of its witnesses for attending the hearing (Tuohimaa, Grant, Ahrnell and Holcke) in an amount of US$ 19’590.
(i) attorneys’ costs and fees for
(a) Tavernier Tschanz in an amount of CHF 2’599'904,
(b) Akinci Law Firm in an amount of US$ 487’111,
(c) Lenz & Staehelin in an amount of CHF 284’687;
(ii) expert costs and fees for FTI (Mr Osborne) in an amount of GPB 582’037;
(iii) witnesses and Respondent’s representatives, travel and other expenses in amounts of TL 312’179, CHF 63747, US$ 366’630 and EUR 5’925.
2. The amount awarded under item 1 shall bear interest from 30 June 2007 until full payment by the Respondent at the highest rate paid by the Turkish State Banks for one-year term deposit accounts in US Dollars as required by the Turkish Law N° 3095 on Legal and Default Interest, as amended by Law N° 3678.
3. The Respondent shall pay to the Claimant US$ 840’000 as contribution to costs fixed by the Court and advanced by the Claimant, and US$ 3’970’814 as contribution to the Claimant’s reasonable legal and other cost.
4. All other and contrary claims are rejected.
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