The UK has settled a £1.25bn damages lawsuit brought against it by Bank Mellat over sanctions imposed by the British government in 2009 that prevented it doing business with the UK financial sector because of its alleged links to Iran’s nuclear programme.
The two sides reached a compromise late on Monday that dealt with all outstanding matters in the claim, including costs, the Iranian bank’s representative told the High Court on Tuesday. The settlement ends a 10-year dispute that went to the Supreme Court, the UK’s highest court. The terms are confidential.
A five-week trial had been due to start at the court on Monday. But David Foxton, representing the government’s Treasury department, asked for the case to be adjourned so he could take instructions from a “very senior government official”, a statement said on Tuesday.
Bank Mellat was suing the British government for losses after it succeeded in 2014 in challenging a 2009 Treasury order that forbade UK financial institutions from doing business with the Iranian lender, which in effect shut it out of the UK financial sector, because of its alleged links to Tehran’s nuclear programme.
Bank Mellat’s lawsuit had initially claimed $4bn against the Treasury, but that figure was later reduced to $1.6 billion plus interest.