The Court of Appeal of the Eastern Caribbean Supreme Court issued a decision confirming that since 27 April 2007 Russia's Alfa Group is the legal and beneficial owner of the Turkcell shares that were previously held by Cukurova Group through its affiliated companies Cukurova Telecom Holdings (CTH) and Cukurova Finance International (CFI). The Court confirmed that Alfa validly appropriated Cukurova's shares in Turkcell following a number of defaults committed by Cukurova Group under the loan agreement extended by Alfa to Cukurova Group in November 2005. The Court has also agreed with the initial judgement that Altimo, the telecoms investment arm of Alfa, acted in good faith in enforcing the security under the loan. In 2007, following a number of defaults by Cukurova Group, Alfa appropriated the shares representing the Cukurova's stake in Turkcell which Cukurova charged to Alfa as security for its outstanding loan of US$1.35 billion. In the legal proceedings in the British Virgin Islands, Cukurova initially raised various arguments as to the nature of Alfa's actions that led to the defaults and exercise of security rights. These arguments were completely rejected by the Appeal Court. The Court confirmed that Alfa "merely enforced its contractual rights in relying upon any act of defaults which did occur, calling the loan and appropriating." Having found that Cukurova had committed the first three defaults, the president of the Court of Appeal tribunal, the Honourable Michael Gordon QC, concluded that to deal with all of the other defaults said to have been committed by Cukurova was unnecessary.
