Iran bank sues UK Govt for $4b over sanctions

Iran’s largest private bank is suing the British government for almost $4 billion in damages after the Supreme Court quashed sanctions imposed against it over alleged links to Tehran’s nuclear program.

Bank Mellat wants compensation for the “significant pecuniary loss” and substantial reputational damage it sustained as a result of sanctions imposed in 2009, according to a claim filed in London’s High Court and seen by Reuters on Monday.

It claims the UK government also successfully lobbied other authorities to impose their own sanctions that ultimately caused and continue to cause the loss of profitable business, customers, banking relationships and dealing services.

“(Bank Mellat) doesn’t want to be in any way vindictive, it just wants justice,” Bank Mellat’s lawyer Sarosh Zaiwalla told Reuters.

A spokesperson for the UK Treasury declined to comment as the case is ongoing.

Western governments believe the Islamic Republic is attempting to enrich uranium for use in atomic bombs. Europe and the United States have imposed sanctions against specific Iranian people, state institutions or companies to persuade Tehran to rein in the program and open up to U.N. inspectors.

Tehran maintains that its nuclear program is for peaceful purposes only and Western governments are now starting to ease part of the sanctions, after Iran and world powers reached an interim deal in Geneva in November.

Some measures will be suspended in the next few months while Iran curtails its most sensitive work on uranium enrichment and tries to negotiate a final agreement.

Britain’s Supreme Court ruled last June that the government was wrong to have imposed sanctions against Bank Mellat in 2009, arguing that the government had been “irrational” and “disproportionate”.

The bank also won a legal battle at the European Union’s General Court, which quashed the sanctions on grounds that EU governments had failed to provide enough information to support their case that the lender had assisted Iran’s nuclear program.

EU governments appealed that decision and a new verdict is pending at the highest court, the European Court of Justice. Bank Mellat’s European operations remain closed and its assets frozen while the appeal is being considered.

Bank Mellat is the first Iranian plaintiff against European sanctions to reach the stage of claiming damages.

A number of other Iranian companies are bringing suits and state entities are taking legal action, Zaiwalla said in January.-Reuters