February 07-2014
Iran is now suing the British government for tanks that the Shah ordered but that were not delivered after the revolution.
The Islamic Government says the UK owes it 400 million pounds ($660 million) for money that Britain just pocketed after the revolution.
The Shah ordered 1,750 tanks and support vehicles for 650 million pounds from International Military Services (IMS), a sales corporation owned by the UK Ministry of Defense.
Only 185 or 11 percent of the order was ever delivered. Iran has sought to get the rest of the money back ever since.
The International Chamber of Commerce, which runs a private arbitration court, sided with Tehran in an arbitration concluded in 2009.
The dispute was thought to have been settled in 2010, but has been further prolonged by what British officials say are bizarre and incomprehensible tactics used by Tehran, by secret meetings in Istanbul, and by the postponement of legal proceedings in Britain due to a change in the presiding judge.
IMS set aside hundreds of millions of pounds more than a decade ago in case international courts ruled against the firm. In 2010, after the arbitration court ruled in Iran’s favor, it was expected IMS would transfer the money to an account holding Iranian assets, although Tehran could not get its hands on the money because of EU sanctions.
But no payment was made and British ministers have refused to disclose why not.
However, The Independent on Sunday, a London newspaper, this week reported Iran is going into court to chase IMS for the funds this summer.
The newspaper said Iranian negotiators and IMS met in July 2010 and March 2011 to iron out the details of what was thought to be a final settlement. But it said, “The Iranians then went quiet.”
A meeting with Iran’s justice minister took place in Istanbul last month, and there have been what are described as “informal” talks in London, The Independent reported.
Iran tried to take IMS to the High Court last summer, but the British team was concerned that the judge’s expertise was in property litigation rather than in sensitive international contractual battles, the newspaper said. The case was delayed, but is now due to begin later this year, much to the bemusement of British officials who feel “there is very little between” the two parties on what is owed and how monies can be offset and transferred.
The Independent said British Defense Ministry officials are still hopeful that a negotiated settlement can be completed before the legal action starts, but there is some speculation that Tehran’s brokers would rather resolve the issue through a court ruling than appear to have compromised in any way.
There is a political benefit in Iran if the government can say Britain lost in court as opposed to reaching a negotiated compromise, which many in Tehran automatically take to mean has Iran has lost its pants.
