UK £ 400m debt to Iran due to settlement

A court of appeal in London is due to settle the size of the debt for the 1970s tank sale which fell through in 1979 during the Islamic Revolution and has remained the subject of a contentious dispute between Tehran and London ever since.

Iran PressEurope: The long-running dispute over the UK government’s non-payment of a £400m debt to Iran is going to be settled in the court of appeal this week.

Earlier, in a tweet, the Iranian ambassador to Britain Hamid Baeidinejad said that a decades-long dispute between the UK and Iran over the size of the debt could be about to come to an end, leaving the government with no excuse to delay payment. The prediction may prove optimistic given legal complexity surrounding the tank sale payment, and the legal constraints preventing the UK from sidestepping sanctions against Iran.

According to Guardian, the dispute concerns an Iranian payment in the 1970s for 1,500 Chieftain tanks and armored vehicles. The contracts were canceled in 1979 during the Islamic revolution but Iran had already paid for the undelivered tanks and demanded its money back. The two sides have been battling in the courts over the size of the debt, including whether interest is payable.

The appeal court is due to hold a two-day hearing on Wednesday and Thursday in January over whether interest on the debt is payable. Last year the high court in London ruled the UK did not have to pay interest on the debt, due to EU sanctions legislation.

The UK has set aside nearly £500m as surety for the debt. International Military Services, then a subsidiary of the Ministry of Defence, has claimed that even if the size of the debt is agreed by both sides, the UK cannot pay since the Iranian Ministry of Defence has been subject to EU sanctions since 2008.


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