EghtesadOnline: The British government is locked in crunch talks in an effort to avoid a lengthy high court battle by settling a £1.25 billion legal claim by Iran’s Bank Mellat.
A five-week hearing involving Bank Mellat and the UK Treasury is due to begin today (Monday), This is Money reported.
The government in London has apparently entered settlement talks with the bank aimed at averting a costly – and potentially embarrassing – court case.
Bank Mellat is 80% privately owned, with the Iranian government holding a 20% stake, Financial Tribune reported.
It is demanding compensation after the British Treasury imposed sanctions on it in 2009. At the time, the treasury claimed that Mellat Bank had provided support for Iran's missile program, and its suspected nuclear program.
According to media reports, in January 2013, the European General Court struck down EU sanctions against the bank, saying there was no evidence to support claims that the bank was in any way involved in these programs. Later that year, the UK's Supreme Court similarly ruled that the allegations were unlawful.
Concerns and Actions
The treasury is reportedly expected to base its defense on the assertion that Iran's suspected nuclear weapons program posed a risk to the UK's national interest, helping to determine its policy toward the Iranian bank, with these "concerns" serving as "ample justification for taking action".
Labor ministers at the time had believed there was evidence linking Mellat with the financing of state nuclear weapons development. Mellat claims action by the UK led to other countries imposing their own sanctions.
Represented by City firm Zaiwalla & Co, Iran’s Bank Mellat is understood to be close to reaching a settlement with the UK government, represented by its legal department.
A lawyer representing Mellat Bank earlier said the financial institution's total losses may have actually amounted to up to $4 billion.
Since the Islamic Revolution in 1979, Iran’s overseas assets have always been at the risk of blockage and confiscation by the government positing hostile attitude toward Iran on multitudes of excuses.
As an exemplar case is the US. The United States has since then frozen billions of dollars' worth of Iranian state and private assets. US court rulings have seized these funds through cases accusing Iran of involvement in international terror plots, with Tehran fervently denying these claims.