Iranian bank to sue Government for £2.3bn

AN IRANIAN bank sanctioned by the UK for allegedly funding Tehran’s nuclear weapons programme is suing the British Government for £2.3bn – claiming it breached its human rights.

Bank Mellat is demanding compensation for lost business and damage to its reputation caused by the Treasury’s decision to impose sanctions against it in 2009 which banned UK firms from dealing with the lender.

Sanctions have been imposed on Iran because authorities, including the UK, the US and Europe, believe it is trying to enrich uranium for use in atomic bombs, rather than for its energy needs.

Mellat, which describes itself as Iran’s largest private bank and denies the accusations, said the Treasury also lobbied ministers in Brussels to introduce an EU-wide ban.

The ban was lifted in 2013 after the UK’s Supreme Court and the EU’s High Court both ruled it was illegal and breached the European Convention of Human Rights. HM Treasury was accused of being ‘irrational’ and of imposing the sanctions without allowing Bank Mellat to defend itself. The European General Court in Luxembourg also ruled that the Treasury had failed to provide enough evidence that Bank Mellat supported the country’s nuclear and missile programmes.

Mellat wants compensation for what it says is ‘significant pecuniary loss’ and substantial reputational damage.

The path has now been cleared for a bruising court case later this year after a judge rejected the Treasury’s argument that it had not breached the Human Rights Act.

The impending showdown comes as Prime Minister David Cameron has tasked new justice secretary Michael Gove with spearheading efforts to scrap the controversial Human Rights Act – fulfilling one of the Tories’ key manifesto commitments. This could see Britain pull out of the European Convention on Human Rights if the reforms are rejected by Strasbourg.

The Treasury declined to comment last night.

But one Tory MP said: ‘This is worrying. Here we have a case when the Treasury took a view and imposed sanctions to protect our citizens and stop the threat of nuclear war.’