Iranian bank to challenge UK, EU sanctions; hires Zaiwalla & Co Solicitors

LONDON: Bank Mellat, the largest Iranian private bank, has decided to challenge the applicability of the sanctions imposed on it by the UK and the European Union and has appointed Zaiwalla & Co Solicitors to fight the case.

The sanctions were imposed mainly because of the alleged influence of the Iranian private sector on the country's nuclear development activity.

Zaiwalla said in a statement that it has been appointed by the bank to represent the case. Set up solicitors of Indian origin, Zaiwalla & Co, a niche chancery lane firm with strong overseas clients, are also before the European Court of Justice and the UK Supreme Court, acting for several other Iranian institutions affected by the UK and EU sanctions.

On February 20, Mellat lodged with the UK Administrative Court the challenge to the Financial Restrictions (Iran) Order 2011. Under that legislation, UK Financial Institutions were ordered not to deal with any bank incorporated in Iran, including the Central Bank of Iran.

Bank Mellat's challenge before the court will raise the important question of whether it is acceptable that sanctions should injure the private sector, when that sector had no role with or influence over the Iranian government's nuclear policy.

In the case of Libya, for example, action was taken to protect Libya's innocent private citizens from physical injuries that resulted from actions taken by their own government.

On the same principle of International Public Policy, the Court will be asked by Bank Mellat to ensure that the innocent private sector in Iran is not made to suffer financial injury as a result of the actions of the Government of Iran.