US court green lights terrorism lawsuit against MTN



Published Oct 24, 2023


In a groundbreaking legal decision, the US District Court for the Eastern District of New York has given the nod for a high-stakes Anti-Terrorism Act lawsuit against Africa’s telecoms giant, MTN Group, to advance to the discovery stage.

This ruling comes as MTN Group wasted no time in submitting an appeal, setting the stage for a precedent-setting legal battle that could rattle court and boardrooms alike for years to come.

Bloomberg reported that in a federal lawsuit filed in New York, more than 50 Americans claim MTN and other technology companies did business with the Islamic Revolutionary Guard Corps (IRGC), even though they knew the transactions would help finance, arm and support the Iranian group’s terror campaign in neighbouring Iraq.

As a result, thousands of Americans were injured or killed between 2011 and 2016, according to the suit. The court’s ruling was multifaceted, dealing with counts of aiding-and-abetting liability under the Justice Against Sponsors of Terrorism Act (Jasta), civil conspiracy liability, and aiding and abetting terrorist acts in Afghanistan.

MTN managed to fend off two of the three counts, but the court determined that the plaintiffs had sufficiently stated a claim for aiding and abetting liability against MTN in Iraq.

What makes the ruling particularly remarkable is that it marks the first time a US court has allowed for the possibility of corporate liability under the Anti-Terrorism Act for direct aid to the IRGC.

Notably, the judgment also highlighted that even after the IRGC was officially designated as a Foreign Terrorist Organisation (FTO) in 2019, MTN retained its commercial ties. In a 2020 statement, MTN said that the close collaboration between MTN Group and MTN Irancell – in which the group has a minority 49% investment shareholding – will continue as it is, and business will be run as usual.

Adding another layer to the case, the court cited that “decades of media coverage allegedly alerted MTN to Hezbollah’s use of cellphones as detonators and to provide key means of communication and track enemy operatives”.

Hezbollah is a Lebanese militant organisation with historical ties to Iran via the IRGC. The US designated it as a terrorist organisation. Hezbollah fighters are reportedly trading fire with Israel across the border since Israel’s war with Hamas began in Gaza.

MTN called for a “pre-motion conference” on October 15 to discuss its appeal, represented by the law firm Freshfields Bruckhaus Deringer. The telecoms giant argues that the case could have a chilling effect on foreign investment and further complicate an already complex geopolitical landscape.

While the appeal remains pending, the court’s decision has allowed the lawsuit to proceed to the discovery stage, a critical phase where evidence can be gathered to either substantiate or refute the plaintiffs’ serious allegations. Interestingly, MTN has yet to issue any announcements through the Stock Exchange News Services (SENS), a regulatory news platform mandated by the Johannesburg Stock Exchange (JSE) for listed companies.

The firm representing the plaintiffs, Sparacino PLLC, said in a statement that it conducted an exhaustive investigation before filing this case. Last year, MTN flatly denied any wrongdoing, asserting that the US lacked jurisdiction to proceed with the case under the Anti-Terrorism Act.

If the court’s decision withstands MTN’s appeal, it could pave the way for similar lawsuits and more than anything – Mupita would be judged by his decision not to cut relations with IRGC last year after the US President Joe Biden reaffirmed the decision to keep the IRGC on FTO list.

The SA Jewish board of deputies and the JSE have said they will not respond on the matter at the moment.