Motorola Wins Battle with Uzans, Not the War"

Motorola has said that the Court of Appeal of England and Wales dismissed a number of appeals brought by Cem Uzan and Aysegul Akay, members of the Uzan family of Turkey, thus upholding the Worldwide Freezing Orders. The Court also stayed its decision to discharge the Worldwide Freezing Orders against Kemal and Hakan Uzan.

The Court's decision upholding the Worldwide Freezing Orders against Cem Uzan and Aysegul Akay and staying its decision regarding Kemal and Hakan Uzan, helps ensure that up to US$800 million of the Uzans' assets worldwide will be preserved pending enforcement of a judgment that is expected to be issued by the United States District Court for the Southern District of New York regarding Motorola's substantive fraud claim against the Uzans. Significantly, the Court of Appeal also affirmed that Cem Uzan and Aysegul Akay's sentences of incarceration of fifteen months and six months respectively, remain in place.

Motorola noted that third parties throughout the world, including various global financial institutions that directly or indirectly hold assets on behalf of the Uzans, risk contempt sanctions and liability if they assist or permit a breach of the Worldwide Freezing Orders.

Jeff Johnson, Motorola's senior corporate counsel, said, "The Court of Appeal's rejection of the Uzans' appeals is a significant affirmation of Motorola's worldwide actions seeking to recover approximately US$2 billion of which our Company was defrauded by the Uzan family. Today's action clearly underscores the importance of international judicial co-operation against the Uzans' actions, which were referred to by one English judge as 'one of the biggest frauds of the century'."

The Court of Appeal rejected the appeals of various lower Court decisions relating to the appropriateness of the Worldwide Freezing Orders, ancillary Orders requiring Cem Uzan and Aysegul Akay to attend for cross examination on their assets, and the length of prison terms imposed against them in light of their contempt of Court. The Court of Appeal also accepted that without the Worldwide Freezing Orders, there was little doubt that Cem Uzan and Aysegul Akay would continue to dissipate their assets in an attempt to make them judgment proof or to otherwise secrete their assets. The Court went on to describe the Uzans' evidence in relation to their assets as "piecemeal, late, untruthful and manifestly incomplete" and that the Uzans' "defiant attitude" has been "part and parcel of a series of tactical delays and regrettable lack of frankness in two jurisdictions...."

The Court of Appeal upheld the appeal of Hakan and Kemal Uzan in relation to the appropriateness of the Worldwide Freezing Order against them. The Court of Appeal accepted that there were ample grounds on the merits to grant Worldwide Freezing Orders against Hakan and Kemal Uzan. The underlying fraud claim against them was regarded as very strong, as was the evidence of their attempts to make themselves judgment proof. However, in the absence of any assets within the jurisdiction belonging to Hakan and Kemal Uzan, the Court of Appeal did not consider it expedient to maintain the Orders. The Court of Appeal has however granted a stay of its decision in this regard, pending an appeal to the House of Lords. The Orders therefore remain effective and Hakan and Kemal Uzans' assets to a value of $400 million remain frozen worldwide.

Of equal importance, both Hakan and Kemal Uzan remain in contempt of Court in England as well as the United States.

These proceedings were brought by Motorola in May 2002 following the favorable preliminary findings of the United States District Court for the Southern District of New York in relation to the Uzans underlying fraud. In granting Worldwide Freezing Orders against the Uzans on May 30, 2002, the English Courts concluded that Motorola "clearly have a strong case that a fraud has been committed - a strong case that dissipation is a serious risk". The Freezing Orders required the Uzans to disclose their worldwide assets but they failed to comply, the English courts noting that "these defendants have failed to make any real attempt to make full and frank disclosure of their asset position". In light of this the English Courts ordered the Uzans to attend for cross examination on their assets. The Uzans chose to ignore these Orders as well, and were accordingly found in contempt with sentences of incarceration of between 6 and 15 months issued, and the Court noting that "The message of this court is simple: no one is above the law; the court's orders are to be obeyed."

Posted to the site on 13th June 2003