Bank Mellat to sue UK gov’t over its sanctions

January 24-2014

Iran’s Bank Mellat plans to sue the British government next month for almost a billion dollars for imposing sanctions on the bank that have been overturned by Britain’s Supreme Court, a lawyer for the bank said.

Bank Mellat will demand at least 500 million pounds ($835 million) in a filing at Britain’s Commercial Court on February 7, said its lawyer, Sarosh Zaiwalla.

It is the first time an Iranian business hit by sanctions has reached the stage of seeking damages after a court found in its favor, he said.

By making British taxpayers potentially liable, the case may put pressure on Western governments to ease their sanctions against Iranian firms in general, said Zaiwalla, who is based in Britain and represented Bank Mellat in its successful appeal to the Supreme Court.

“It may set a benchmark for any sanctions against Iran,” he said in an interview with Reuters last Wednesday.

Zaiwalla said Bank Mellat was one of eight to 10 private Iranian firms that will bring suits in Europe; Iranian state entities will also take legal action.

Britain’s Supreme Court ruled last June that the UK government was not justified in imposing sanctions on Bank Mellat in 2009. This followed a January 2013 ruling by the European Union’s General Court, which overturned sanctions the bloc imposed on it in 2010.

Bank Mellat has still not been able to resume business in Britain or the EU because of new legal action by the UK and EU, so it is considering whether to take further steps in the courts, Zaiwalla said.