An Iranian bank suing the British government for $4 billion over “unlawful” sanctions imposed over alleged links to Tehran’s nuclear weapons programme has been ordered to hand over details of its Iranian customers.
The UK imposed financial restrictions on Bank Mellat in 2009 for supplying financial services to key figures and organisations linked to the weapons programme which the bank says unfairly cost it millions of dollars in revenue.
The move banned any company operating in Britain from dealing with the Tehran-based lender. The bank says that ‘copycat’ rulings by the European Union, the UAE and South Korea had the further effect of squeezing its finances.
The bank sued after the UK’s top court in 2013 ruled that the government had acted unlawfully because it had failed to give Bank Mellat proper notice to defend itself.
The bank won a second ruling in 2016 against the EU, which its lawyers described as the first big legal success for an Iranian corporation challenging the sanctions regime, the Financial Times reported.
The bank is now seeking billions of dollars over the initial 2009 ruling that saw it locked out of the UK market and stifled its substantial international business, much of which was carried out through London.
But a dispute over retrieval of information on clients triggered a fresh legal battle. The bank wanted to hold back the names of its clients and even warned if “push came to shove” it would disobey an order from a court ruling.
Three judges on Friday threw out the appeal by the bank and said the warning about withholding data “contains an inherent element of threat. It is thus… deeply unattractive.”
An expert witness for the bank had claimed that the bank’s reputation and future business could be threatened if it handed over unredacted documents and its staff could face “potential persecution”.
The “massive and complex” trial to decide is due to start in June 2019 and the UK government had been seeking details of the bank’s Iranian customers so it can fight its case.
A judge in September last year had ordered Bank Mellat to hand over all the customer details but the bank had challenged the ruling, saying that it would be a breach of privacy under Iranian law.
The UK had the agreed that the documents would be shared only with a group of officials and lawyers dubbed “The Confidentiality Club” and that the names would be protected by cipher codes.
Dr Mohammad Hedayati-Kakhki, an Iranian barrister and academic, said that such a move would probably be investigated by Iranian investigators who are “are known for use of aggressive investigative techniques,” according to court documents.