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British court rules against Iran in tank payment dispute

Published: Updated:

A UK court has ruled in London’s favor in a long-standing financial dispute with Iran that has wider political ramifications for Britain’s increasingly strained relationship with the Islamic republic.

The case revolves a payment of £650 million made by Iran in the 1970s to buy 1,500 Chieftain tanks from Britain and repair 250 more.

The deal was blocked after the 1979 Islamic Revolution deposed the Western-backed Shah. Britain kept the paid portion of the contract.

Just under £400 million ($500 million, 450 million euros) are now being kept in a frozen British bank account.

Sending the money to Tehran is further complicated by EU and US sanctions linked to Iran’s nuclear programme.

A judge with the UK High Court ruled on Wednesday that Britain did not owe Iran interest payments of more than £20 million that had accumulated on the sum over 10 years.

Justice Stephen Phillips cited a precedent case that found claims made by any “Iranian person, entity or body, including the Iranian government” were invalid in commercial disputes because of the Western sanctions.

The Iranian claim was made jointly by its defense ministry and armed forces.