In Cukurova Finance International Ltd v Alfa Telecom Turkey Ltd  UKPC 2, the Privy Council held that a borrower may claim relief from forfeiture notwithstanding that the forfeited security has been appropriated by the lender in satisfaction of a debt.
Alfa Telecom Turkey Limited (Alfa) lent USD 1.35 billion to a company in the Cukurova group of companies (Cukurova). The lending was secured by charges over Cukurova's shares in a number of BVI companies including a shareholding in Turkcell, the largest mobile telecommunications company in Turkey. If Cukurova defaulted on the loan, Alfa could appropriate the charged shares.
Alfa accelerated the loan on the basis that various events of default had occurred and demanded immediate repayment of the outstanding balance. When Cukurova failed to pay, Alfa appropriated the charged shares. A month later, Cukurova gave Alfa notice that it intended to "prepay" the full amount due and purported to proffer the sum eight days later. Alfa rejected the tender on the basis that it was too late.
At first instance, Bannister J held that none of the events of default were made out. On appeal, the Court of Appeal held that three of the alleged events of default had been made out and therefore Alfa had been entitled to accelerate the loan and appropriate the charged shares. The Privy Council upheld the decision that the acceleration and appropriation were valid, but concluded that it had jurisdiction in equity to grant relief from forfeiture.
The Privy Council found as a matter of principle that relief from forfeiture extends to forfeiture of proprietary or possessory rights, and not just contractual rights, and is not limited to rights over real property. The Privy Council is yet to determine the nature of relief to be granted in this instance.
See court decision here.