An Iranian bank plans to file a claim worth hundreds of millions of pounds against the British government next month as part of efforts by Iranian companies to dismantle Western sanctions against them, a lawyer for the bank said.
Bank Mellat will demand at least 500 million pounds ($820 million) in a filing at Britain's Commercial Court on Feb. 7, after the Supreme Court ruled last year that the government was wrong to slap sanctions on it, said the lawyer "Sarosh Zaiwalla".
He said that it is the first time that an Iranian plaintiff against sanctions in Europe has reached the stage of claiming damages after a top court found in its favour, adding "by making British taxpayers potentially liable, the case may put pressure on Western governments to ease their measures against Iranian firms in general" .
Zaiwalla represents Bank Mellat in its appeal to the Supreme Court.
"It may set a benchmark for any sanctions against Iran", he said in an interview late on Wednesday.
Western governments have taken a wide range of steps against Iranian firms in the last few years - freezing their assets, blocking trade and preventing them from doing business with Western banks - in a drive to curb Tehran's nuclear programme, which the United States and others suspect may be aimed at building an atomic bomb.
Now, however, governments are now starting to ease part of the sanctions under an interim deal reached between Iran and world powers in Geneva last November. Some measures will be suspended in the next six months while Iran - which denies it wants nuclear bombs - curtails its most sensitive work, on uranium enrichment, and tries to negotiate a final agreement.
The Bank Mellat case could help to accelerate the roll-back of sanctions. Zaiwalla said Bank Mellat was one of about eight to 10 private Iranian firms bringing suits in Europe; Iranian state entities are also taking legal action.
Britain's Supreme Court ruled last June that the government was not justified in imposing sanctions on Bank Mellat in 2009. This followed a January 2013 ruling by the European Union's General Court, which overturned sanctions the bloc imposed on it in 2010.
Bank Mellat has still not been able to resume business in Britain or the E.U because of additional legal action by governments there, so it is considering whether to take further steps in the courts, Zaiwalla said.
Under the Geneva deal, Iran's access to several billion dollars of its oil revenues held abroad will be unblocked. The EU will suspend bans on insuring and transporting Iranian oil, and on trade in petrochemicals and precious metals; the United States will suspend sanctions on Iran's auto industry and the supply of spare parts for airplanes.
Zaiwalla said there was still much uncertainty in the business and legal communities over exactly how the easing of sanctions would be conducted, and therefore over how much Iran's trade in those areas would revive over the next six months.
For example, core U.S banking sanctions will remain in place. So while foreign car makers will in theory be able to resume shipping auto parts to Iran, it is not clear how much easier it will become for Iran to make payments via the global banking system, an expert on the Gulf's car industry said , adding that until that issue is cleared up, foreign companies will move slowly.
He stressed "we still have a blockage on financial flows. So nobody is motivated to send parts and produce there because you are not going to be paid".
However, Zaiwalla said his contacts with Iranian clients and companies showed much of the Iranian business community believed there was a good chance for substantial amounts of trade with the West to resume this year.
"There's a great optimism on the Iranian side...People feel the momentum is rising too fast for anyone to stop it now".
These hopes are shared by many Western businessmen: Zaiwalla said he had arranged a business meeting in Dubai instead of Tehran this week because of difficulty finding hotel rooms in the Iranian capital.
He said "the hotels are fully booked by businessmen from Germany, the UK, other European countries" , adding "they are there to look at the opportunities which may be about to open up".
Iran's non-oil imports sank 17 percent from a year earlier to $33.3 billion in the nine months to mid-December, according to Iranian customs data published by local media.
Sales to Iran by Western firms have dropped by larger margins, as companies from countries such as China, which have not imposed major sanctions on Iran, have been able to fill part of the gap left by their European and U.S rivals.