Subject: [NEXTEL-1] Appellate Court Dismisses RICO Claims by Motorola, Nokia Against Telsim's Owners, the Uzan family

From: Marcel <[email-masked]>
Date: Thu, 13 Mar 2003 01:31:36 -0500

Appellate Court Dismisses RICO Claims by Motorola, Nokia Against Telsim's Owners, the Uzan
family

Business Editors

NEW YORK--(BUSINESS WIRE)--March 10, 2003--A three-judge panel of the federal
appeals court in New York has dismissed all racketeering charges brought by Motorola and
Nokia
against the prominent Uzan family of Turkey. Among their many business interests is
Telsim, Turkey's
second-largest mobile phone company.

In dismissing the RICO claims, the Second Circuit Court of Appeals, in a unanimous
decision filed
late Friday, ruled that U.S. District Court Judge Jed Rakoff had "incorrectly decided"
that Motorola
and Nokia had legal standing to bring RICO claims against the Uzans.

Telsim CEO Hakan Uzan commented, "I am gratified that the U.S. appellate court has
rejected
these false RICO claims brought against my family and me. We look forward to being
completely
vindicated on all grounds by the appropriate tribunals. It is regrettable that Motorola
and Nokia have
pursued this meritless litigation instead of participating in the previously agreed
arbitration procedure."
The lawsuit arose from vendor financing arrangements between Telsim and Motorola and Nokia

executed in the late 1990's. Each of these agreements provided that any disputes would be
resolved
by arbitration in Switzerland. After an unforeseeable series of major economic upheavals
in the
Turkish economy, Telsim sought to reschedule its debt with Motorola and Nokia. In January
of
2002, even though arbitration proceedings were already pending in Switzerland to
restructure
payments of the debt relating to equipment purchases from Nokia, Motorola and Nokia filed
their
complaint in the Southern District of New York alleging violations of RICO, as well as
violations of
Illinois state law.

The Court of Appeals ruled that Motorola and Nokia cannot bring RICO charges against any
member of the Uzan family. The Court of Appeals also directed the lower court to
reconsider
whether the preliminary injunction - which had required deposit of the Telsim shares into
Court -
should remain in effect in light of the decision striking the RICO claims.
The Court of Appeals stated: "The dismissal of the RICO claims alters things in a way that
justifies
reconsideration of the injunction, the sufficiency of grounds for issuance as well as the
terms of an
injunction, if issued."

The Court of Appeals also directed the lower court to consider dismissing the state law
claims as
well for lack of jurisdiction. In addition, the Court recognized the central role of Swiss
arbitration in
the dispute, and instructed Judge Rakoff to revisit his earlier decision which had allowed
the U.S.
litigation to proceed while barring the arbitrations. Thus, the decision strongly calls
into question
whether Motorola and Nokia will ultimately be permitted to continue their suit in the U.S.
courts.

http://www.businesswire.com/cgi-bin/f_headline.cgi?bw.031003/230695483
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