Bank Mellat challenges EU sanctions
TEHRAN - Bank Mellat, the largest Iranian private bank, has chosen Zaiwalla & Co. Solicitors in London to act on their behalf to challenge the applicability of the Sanctions which had been imposed on the Bank by the UK and the European Union, because of the alleged influence of the Iranian private sector on that country’s nuclear development activity.
Bank Mellat earlier had instructed Stephenson Harwood, a large City of London Solicitors firm, but later replaced them with Zaiwalla & Co.
Bank Mellat lodged last month with the UK Administrative Court their challenge to the Financial Restrictions (Iran) Order 2011, which had been issued by Her Majesty’s Treasury on 21 November 2011. Under that legislation, UK Financial Institutions were ordered not to deal with any bank incorporated in Iran, including the Central Bank of Iran.
If Bank Mellat succeeds in its challenge to the 2009 Order this will have a substantial effect on the validity of the 2011 Order and will impact the way the UK imposes restrictions on Iranian Banks, 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.
Zaiwalla & Co, which is a niche Indian origin chancery lane firm with strong overseas clients connection, 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. It is the first time that leading Iranian private sector banks have chosen a Solicitors firm of Indian origin to represent them before the English Courts and the European Court of Justice.