Accessibility links

Breaking News

UK-Iran Dispute Over 40-Year Debt Continues As Court Rules Against Iran

One of the Chieftain tanks delivered to Iran before the 1979 revolution during the Iran-Iraq war. Undated. File photo

A High Court judge in London has dismissed a £20 million (approximately $24.5 million) claim by Tehran for interest on the historic debt Britain owes Iran.

Judge Stephen Phillips from the High Court in London ruled that the U.K. does not have to pay the sum that Iran believes has accrued on £387 million owed to Tehran over the failed delivery of more than 1,700 Chieftain tanks and armored vehicles based on contracts signed in of 1971.

Meanwhile, the Islamic Republic's ambassador to London, Hamid Baeidinejad, has accused British authorities of delaying the repayment of the debt.

Hamid Baeidinejad, an Iranian top diplomat who serves as Iran's ambassador to the United Kingdom.
Hamid Baeidinejad, an Iranian top diplomat who serves as Iran's ambassador to the United Kingdom.

"The legal counsel of the U.K. Defence Ministry subsidiary company resorts to all possible procedural tactics to delay the payment of Iran's debt," Baeidinejad said on his Twitter account on Monday night.

The initial dispute goes back to a 1970s defense deal between the Royal Iranian Defense Ministry and International Military Services (I.M.S.), a venture owned by the British MoD.

I.M.S. agreed in 1971 to sell Iran more than 1,700 Chieftain tanks and armored vehicles for more than 650 million pounds (approximately $800 million). Britain delivered 185 of the armored vehicles to Iran before the Islamic Revolution that toppled Shah Mohammad Reza Pahlavi, and the establishment of a clergy-dominated republic.

In February 1979, immediately after the revolution, the new regime in Iran canceled the contracts. Having already paid for the undelivered tanks, Tehran demanded its money back, plus interest.

Presently, the U.K. courts are in control of an account holding nearly £500m (roughly $610 million) from the U.K. government-owned company behind the deal, but it cannot be transferred because of the banking sanctions Washington has imposed on Iran.

While Iran and the U.K. are wrangling over the payment of the interest related to the debt, a high court in London declared that it would convene its next session in March 2020.

Responding to the news concerning the dismissal of Iran's claim to receive interests, Tehran's ambassador to London, Hamid Baeidinejad, insisted in a tweet that "the U.K. court had not ruled against Iran, contrary to what the B.B.C. had reported, and that the case had been sent to a court of appeal."

Iranian-British aid worker Nazanin Zaghari-Ratcliffe, undated
Iranian-British aid worker Nazanin Zaghari-Ratcliffe, undated

Earlier, it was reported that the row over the debt had been entangled with the case of an Iranian-British mother, Nazanin Zaghari-Ratcliffe, held in the Islamic Republic's notorious prison, Evin, in the capital city, Tehran.

Nazanin Zaghari-Ratcliffe was arrested in April 2016 at a Tehran airport as she headed back to Britain with her daughter after a family visit and was sentenced to five years in jail for "soft subversion" of Iran's clerical establishment. A charge that had repeatedly denied by Zaghari-Ratcliffe, her family, and legal counsel.

Meanwhile, in a letter from Tehran's Evin prison, Zaghari-Ratcliffe has accused the Iran of putting her "on auction" for its "political ends and demands."

The letter, widely circulated on October 2 on social media reflects the despair of the 40-year-old mother who has been behind bars since April 3, 2016.

The Islamic Republic Foreign Minister, Mohammad Javad Zarif, recently promised to exchange Zaghari-Ratcliffe with Iran's blocked asset in the U.K. but never delivered.