Iran's largest Private Bank Challenges the Iranian sanctions in the Supreme Court
26 Jun, 2012
The UK Supreme Court will hear next week (4th and 5th July 2012) Bank Mellat’s Appeal against HM Treasury’s Financial Restrictions (Iran) Order 2009 (“2009 Order”), under which it directed the UK financial sector not to enter into or continue to participate in transactions with Bank Mellat and the Islamic Republic of Iran Shipping Lines (IRISL”).
Pavani Reddy, Managing Partner at Zaiwalla & Co. LLP, the solicitors who are representing both Bank Mellat and the interveners, said “The Supreme Court will need to determine the important question of whether International Public Policy, of which the UK’s Public Policy forms part, allows innocent private citizens to be punished for the acts of its their Government?”
“It is highly doubtful that such sanctions would bear any fruit in the present scenario. It would only add to the misery of innocent individuals which is a result contrary to International Law.”
The 2009 Order was made on the basis that HM Treasury believed, at the time of making the 2009 Order, that:
1. Bank Mellat was a State Owned Bank (with 80% of its voting rights controlled by the Government of Iran);
2. It had provided banking services to a UN listed organisation connected to Iran’s proliferation-sensitive activities, and;
3. Such an action against a State Owned Bank would increase pressure on Iran to comply fully and transparently with its International Obligations.
The Appeal has taken a very interesting turn as the Supreme Court of the United Kingdom has granted six private shareholders and/or customers of Bank Mellat leave to intervene in this Appeal. The intervening entities represent the interests of, among others, 42 million low-income and disadvantaged Iranian Citizens who hold shares in Bank Mellat, 120,000 present and former bank employees and numerous various private pensioners, all of whom have been adversely affected by the imposition of these sanctions.
The shareholders have provided evidence to the Supreme Court that the impact of the Financial Restrictions (Iran) Order 2009 has been felt by the bank’s shareholders and customers, all ordinary Iranian citizens, as opposed to the Iranian Government.