Kenneth MacLean QC, together with a team which included James Nadin and David Caplan of One Essex Court, represented the Defendants, Cukurova, in litigation in the High Court in the British Virgin Islands concerning certain shares which indirectly confer control over Turkcell, a company quoted on the Istanbul and New York Stock Exchanges and the largest mobile phone operator in Turkey. In 2005 the shares were charged by Cukurova to Alfa Telecom Turkey, part of the Alfa Group of Russia, as security for the repayment of a loan of over USD1.3 billion. In 2007 ATT alleged that Cukurova had committed a number of defaults under the loan facility and purported to enforce its security by exercising a power of appropriation over the shares in reliance on the English Financial Collateral Arrangements (No 2) Regulations 2003. The litigation has already reached the Privy Council (May 2009) on certain preliminary issues of law concerning the Regulations. It is the first case in which the power of appropriation over financial collateral has been judicially considered. After nearly 3 years of litigation and a witness trial lasting 3 weeks, the BVI High Court has held (20 May 2010) that Cukurova was not in default under the secured loan facility as ATT alleged and that ATT’s attempt to exercise the power of appropriation over Cukurova’s shares was ineffective. The High Court has also ruled that Cukurova made an effective tender of repayment of the secured loan which entitled it to redeem its security.
Kenneth MacLean Q.C., James Nadin and David Caplan appeared for the successful Defendants and were instructed by John Reynolds of White & Case LLP