A UK-government owned company spent £1.4 million ($1.82m) on legal fees last year as a dispute with Iran over a near-£400m ($520m) arms debt entered its fifth decade.
Defence minister Jeremy Quin said £1,432,000 had been spent by the International Military Service on external legal advice in 2019/2020 as Iran pressed to get the debt repaid.
Campaigners say resolving the financial wrangle over the cancelled deal for 1,700 tanks and armoured vehicles is key to securing the freedom of jailed British-Iranian dual citizens, including Nazanin Zaghari-Ratcliffe and Anoosheh Ashoori. Both governments officially denied any link.
The arms deal in 1971 with the former Shah of Iran was cancelled after the 1979 revolution without any of the vehicles being delivered, but the money was never repaid.
The tanks were later sold to Iraqi leader Saddam Hussein, who turned them on Iran during the 1980-1988 war. Before he became defence secretary, Ben Wallace once described Britain’s role in the affair as one “marred by double dealing and obfuscation”.
Britain accepts that it owes money to Iran but says that it could not pay the bill because of EU sanctions that were imposed on the Iranian defence ministry in 2008.
The two sides were still involved in court cases disputing the final amount to be paid before sanctions were imposed.
A court heard this year that both sides agreed that the IMS could not lawfully pay anything because of the sanctions.
The UK government has reportedly been considering repayments via humanitarian aid to try to avoid breaking the sanctions regime.
The IMS paid £382m into a court-controlled account in 2002 until the dispute was settled, which has risen to more than £500m with interest.
Details of the legal bill emerged this week after a question in parliament by Ms Zaghari-Ratcliffe’s MP, Tulip Siddiq.
