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Indian-origin law firm settles Iranian bank case against UK government

Indian-origin law firm settles Iranian bank case against UK government
Highlights

The UK High Court was informed of the settlement as it was set to begin a five-week trial in the case on Tuesday.

LONDON: A law firm founded by an Indian-origin lawyer on Tuesday achieved a USD 1.6 billion settlement for its client, Iran's Bank Mellat, against the UK government to end a 10-year-long legal dispute in the British courts.

Zaiwalla & Co LLP, a sanctions specialist law firm based in London, won the damages in the Bank Mellat versus HM Treasury case dating back to 2009 – when the British government imposed sanctions preventing Iran's largest private bank from doing business with the UK's financial sector because of alleged links to the country's nuclear programme.

The UK High Court was informed of the settlement as it was set to begin a five-week trial in the case on Tuesday.

The terms of the settlement in the case, which had gone all the way up to the UK Supreme Court, remain confidential.

“Bank Mellat's earlier success in the Supreme Court, through our firm, against the UK government which has now resulted in a satisfactory settlement of the High Court proceedings to assess damages, will reinforce further the confidence of foreign parties in the independence of the English Judiciary,” said a statement by Zaiwalla & Co.

LLP, founded by Indian-origin lawyer Sarosh Zaiwalla.

"Today, in many countries throughout the world, the English Court is considered as the International Commercial Court, where parties can obtain fair and impartial justice," the statement noted.

Bank Mellat was sanctioned by HM [Her Majesty's] Treasury, under the Financial Restrictions (Iran) Order, pursuant to the powers granted to it by the UK's 2008 Counter-Terrorism Act.

The Order issued in 2009 had prohibited UK financial institutions from having any business relationship with Bank Mellat, which had challenged the order in the Court of Appeal and lost.

It went on to appoint Zaiwalla & Co.

LLP as its legal advisory team prior to taking the matter to the Supreme Court, which subsequently decided that the Iranian bank had been irrationally singled out and that the elimination of its business in London was a disproportionate response to the HM Treasury's stated goals.

The court also ordered HM Treasury to pay Bank Mellat's costs and it remitted the case to the High Court for the assessment of damages caused to Bank Mellat as result of the 2009 order.

Bank Mellat thereafter sued the Treasury for damages and claimed that the sanctions led to losses of USD 1.6 billion.

The parties have now reached an 'amicable settlement' where all the outstanding matters in the claim, including losses, have been settled and Bank Mellat's claims have been concluded on terms confidential to the parties.

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