Appeals Court upheld the right of the Bank Mellat for information

March 31 2016

Friday, 23 October 2015 – The Court of Appeal has this morning in an unanimous decision held that Bank Mellat, Iran’s largest private commercial bank is entitled to be given sufficient information about the evidential case against it so far as to enable the bank to give effective instructions to its legal representatives in relation to allegations made against the bank.  

This appeal relates to interlocutory decisions relating to disclosure of closed materials which would be contrary to public interest, to Bank Mellat in the process of challenging The Financial Restrictions (Iran) Order 2011 which was in force from 21 November 2011 until expiry by effluxion of time on 20 November 2012 and The Financial Restrictions (Iran) Order 2012 which was in force from 21 November 2012 until 31 January 2013 until the coming into force of an EU measure, Regulation 1263/2012/EU.

On 5 November 2014 Collins J at the Administrative Court held that Bank Mellat must be given sufficient information about allegations made against it to enable it to give effective instructions in relation to those allegations to its legal representatives. On 18 November 2014, in a separate closed hearing in which Bank Mellat was represented by Special Advocates, Ouesely J found that in the application of the test there was no need to give any further disclosure to the bank. Bank Mellat appealed the judgment of Ouesely J subsequent to which Her Majesty’s Treasury cross-appealed the initial decision of the Administrative Court arguing that there was no minimum disclosure requirements and that such disclosure principles applied only in cases where personal liberty or some equally compelling fundamental interest is at stake and that financial restriction orders do not fall within that class.  

The Court of Appeal has dismissed the Treasury’s appeal against the order of Collins J and allowed Bank Mellat’s appeal against the order of Ouesely J, stating that “…restrictions on the freedom to do business or engage in financial transactions can be as serious for a bank as restrictions on personal liberty for an individual.”

In an earlier proceedings the UK Supreme Court had held that the listing of Bank Mellat by UK Government in 2009 under Iran sanction was unlawful and the Bank Mellat is currently pursuing a damages claim of USD 4 billion against the UK Government in the English Court.

Zaiwalla & Co. Solicitors, the international law firm acting on behalf Bank Mellat, has welcomed the judgment made in the Court of Appeal. The firm’s Senior Partner, Sarosh Zaiwalla, has said: “Time and again, the Courts have decided that a decision made without regard to the core principles of natural justice and rule of law is void. In the case of HM Treasury, the judgment of the Court of Appeal confirms this and supports the Bank’s right to a fair trial and being provided with sufficient information to address the allegations made against it.” 

Pursuant to the directions of the Court of Appeal the matter has now been remitted to the Administrative Court for reconsideration of the issue of disclosure.

For more information please contact Ms Zoya Burbeza, solicitor at Zaiwalla & Co. by email zoya.burbeza@zaiwalla.co.uk or by telephone +44 (0)207 312 1000.

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