UK Supreme Court votes to lift sanctions on Iranian bank

Tehran Times | June 19, 2013

LONDON – The UK Supreme Court has ruled in favor of Bank Mellat, Iran’s largest private bank, in a result which will see it removed from the United Kingdom’s sanction list.

The appeal was heard by nine out of the Supreme Court’s twelve judges after the UK’s highest court was forced to enter closed session for the first time in its history, in order to receive secret evidence from the security services.

Her Majesty’s Treasury imposed sanctions against the bank in 2009 alleging that the bank’s activities supported the Iranian nuclear program, but Wednesday’s ruling found no evidence to support this claim. The UK Supreme Court result follows similar success for the bank at the European Court in January of this year in respect of sanctions which had been imposed on the bank by the EU Council.

The ruling is a blow to the controversial system of “secret courts” which have allowed the security services to provide evidence to the Supreme Court behind closed doors for the first time in its history.

The Supreme Court reluctantly entered into closed session in March, effectively barring the bank from accessing the evidence against it. Zaiwalla & Co Solicitors, the London-based international law firm representing the bank, had argued against the imposition of closed courts on the grounds that it contravenes the British common law principle of open justice. The failure of the Treasury to produce compelling evidence, despite the controversial new powers, puts the spotlight back on the Justice and Security Bill, which expanded the system of closed courts to civil cases.

The ruling sends a strong message to the UK government that political expediency is not a sufficient legal justification for sanctions placed against Iranian private businesses which operate out of Iran. The Supreme Court is now expected to order the British government to pay Bank Mellat all of its legal costs and damages for the wrongful listing of Bank Mellat.

After initial failure to challenge sanctions before the English High Court and the Court of Appeal, Bank Mellat turned to Zaiwalla & Co in 2010 and has since gone from strength to strength in the European and now Supreme Court. The firm, led by Sarosh Zaiwalla, have shown that even in cases of national security, the UK government must abide by the rule of law, with the some of the justifications for the sanctions considered “arbitrary”, “discriminatory” and even “irrational”.

Sarosh Zaiwalla, senior partner at Zaiwalla & Co said, “Today’s ruling is a victory for the rule of law as much as it is for Bank Mellat.

“The judgment will put enormous confidence in the independence of the British judiciary and sets an example that even controversial disputes can be resolved by applying the principle of rule of law through the British courts.

“Nevertheless, the reading of the closed judgment clearly contravenes the British principle of open justice, the bank’s success demonstrates just how unjustified closed sessions are.”