Iran's Bank Mellat Seeks GBP500M in U.K. Damages After Sanctions Ruling

Iran 's Bank Mellat is claiming GBP500 million ($782 million) from the U.K. Treasury after a London court ruled against a British decision to sanction the bank, a defense lawyer said Sunday.

The claim underscores the financial risks faced by Western governments as they seek to enforce sanctions over Iran 's controversial nuclear program.

The U.K.'s "Supreme Court has referred [the claim] to the High Court so it can assess the loss" to Mellat due to sanctions, said lawyer Sarosh Zaiwalla, a senior partner at Zaiwalla and Co. LLP, who represents the bank.

In June, the U.K. 's highest court ruled against sanctions that had been imposed on Bank Mellat, Iran 's largest private bank, as a result of its alleged links to Tehran 's nuclear program. The London ruling follows a similar decision in favor of Bank Mellat at a European Union court. But it won't lead to an end to restrictions against the bank for now because EU sanctions remain in place on Mellat. A spokesman for the U.K. Treasury said it had not received any claim and it would "robustly" contest any demand for compensation.

The U.K. sanctioned Mellat in 2009, banning its operations in the country and freezing its assets after it was accused of facilitating Iran 's nuclear program. The measure was expanded to the rest of the European Union the following year.

The sanctions against the bank were part of a vast arsenal of restrictions imposed by the international community on Iran over its nuclear program. They included an EU embargo on Iranian oil and a U.S. ban on dealing with the country's central bank. Western nations accuse Iran of developing an atomic weapon, while Tehran says its nuclear program is peaceful.