Iranian Bank Sues UK for $4 Billion over Business Lost to Sanctions

Iran’s largest private bank, Bank Mellat, is suing the UK Treasury for some $4 billion in compensation for what it alleges was lost business due to British sanctions against Iran, a report said.

A spokesman for the UK Treasury said he couldn’t comment on ongoing legal proceedings, Wall Street Journal reported.

In a filing on Friday with London’s Commercial Court, which was reviewed by The Wall Street Journal, Bank Mellat’s lawyers, Zaiwalla & Co., said the bank is seeking $3.98 billion in reparations for lost international businesses due to sanctions.

The claim follows a June 2013 ruling by Britain’s highest court that found sanctions imposed on the bank by the UK government in 2009 were illegal because Bank Mellat isn’t a state-owned financial institution, and there wasn’t evidence it aided Iran’s nuclear program.

The Treasury had expressed disappointment with the UK Supreme Court’s ruling at the time. It also had said the judgment had been superseded, in any case, by a European Union asset freeze, which remains in place, on the bank.

As part of a series of actions by Western governments, Britain has imposed sanctions on a growing number of Iranian businesses.

This latest claim against the UK government also comes after a string of shipping companies and banks, including Mellat, won legal challenges contesting sanctions in a European court last year. The European Union has either appealed or placed the entities affected by the court action under new sanctions.