Most surprisingly, the appeals court ruled that the British government violated Bank Mellat’s human rights as guaranteed by the European Convention on Human Rights.
The decision is a huge defeat for Her Majesty’s Government, although it is not yet a victory for Bank Mellat. The court did not rule on the merits of Bank Mellat’s claim of $4 billion. It just said that the UK Treasury could not limit the damages Bank Mellat could seek. The actual merits of Bank Mellat’s claims will now be decided in a trial court expected to hear the case next year.
The British government slapped sanctions on Bank Mellat in 2009 and the bank then went to court challenging the sanctions. The case went all the way up to the UK Supreme Court, which ruled in 2013 that the British government’s decision to lock the bank out of the British financial market was “irrational” and “disproportionate” to the declared objective of hindering Iran’s nuclear program.
With that decision, Bank Mellat sued the government, seeking compensation for its losses. It said it lost customers and an immense amount of business and said Britain should pay it $4 billion for all the damage done.
The UK Treasury then appealed to limit what Bank Mellat could sue for, citing three legal arguments. The High Court rejected all three.
In the upcoming trial, Bank Mellat will have to provide evidence to support its claims.
The European General Court in Luxembourg has also ruled that the UK Treasury overstepped its bounds and failed to provide enough evidence to prove that Bank Mellat supported Iran’s nuclear and missile programs.