The High Court of Justice of England and Wales has rejected the British government’s attempt to delay a hearing in which Iran’s Bank Mellat is seeking US$4 billion damages from the UK Treasury.
Bank Mellat is suing the government for losses – the largest part of which the Iranian bank says are due to it being rendered unable to write letter of credit (L/C) business – after a Treasury order effectively locked the bank out of the UK’s financial sector.
In 2014 the bank successfully challenged a 2009 Treasury order prohibiting UK financial institutions from doing business with the Iranian lender because of its alleged links to Tehran’s nuclear programme.
But the Treasury countered this by saying a hearing was not required because Bank Mellat had suffered no irrecoverable loss as a result of the order and that it was not incompatible with the European Convention on Human Rights.
The court however ruled against the Treasury on all counts and upheld a previous Supreme Court ruling that that the Treasury had violated the bank’s rights under the convention.
The bank should, according to the High Court judgment, have the right to claim for damages as a consequence of the unlawful interference.
Bank Mellat claims its biggest loss of US$1.3 billion was via commission on its foreign currency-denominated L/C business.
Categories: Trade Based Financial crimes News