Iran has indicated that it wants to settle payments for its new and outstanding oil sales in euros and not in dollars or any other currencies.
Iran has also told its trading partners, including India that it owes it billions of dollars that it wants to be paid in euros rather than U.S. dollars.
Today, the European Court of Justice upheld the decision that Bank Mellat did unfairly have sanctions placed upon it by the European Council, and The Court of Justice confirmed the annulment of the fund-freezing measures in place against Bank Mellat since 2010.
The European Court of Justice also ruled that the European Council had failed to provide sufficient grounds or evidence.
International law firm Zaiwalla and Co., an English solicitors firm of Indian origin had been appointed by Bank Mellat in place of Stephenson Harwood to represent the bank both at the UK and EU level, challenging both the UK Supreme Court and EU Court respectively of their unlawful sanctions on the bank.
Bank Mellat was unlawfully sanctioned by HM Treasury and after the UK Supreme Court dismissed HM Treasury's appeal, the bank is pursuing a damages claim against the HM Treasury to the tune of USD 4 billion.
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The judgment will have significant implications for the bank's pursuit of a damages claim for significant pecuniary losses and substantial reputational damage suffered whilst under sanctions.
Mr. Sarosh Zaiwalla, the founder of the firm, said, "The sanction free Iran is now ready to take the step to keep trade with India going and regain its lost market share. The imposition of extensive sanctions and trade restrictions on Iran have crippled its economy in the past few years, particularly in the financial and energy sectors, significantly affecting the day to day lives of local Iranians and their businesses, in addition to foreign companies and individuals with an interest in investing in the country.
India and Iran are now negotiating to evaluate the Asian Clearing Mechanism (ACU) to increase its oil exports to India and address the payment issue between the two countries. Iran is ready to take the SWIFT route to unblock the pending oil payments. Iran is in the process of opening euro accounts with Indian banks for easy transfer of payments from the Indian oil companies.
Another major development for Iran is that The appeal court of the European Court of Justice in Luxembourg delivered its judgment this morning in favour of Bank Mellat which was represented by Zaiwalla & Co an English solicitors firm of Indian origin in respect Of EU Councils appeal in which European Court of Justice (ECJ) has affirmed that the European Council did not have evidence to substantiate its claim that Bank Mellat was involved in supporting Iran's nuclear and ballistic missile program and has unfrozen the assets of the Bank.
This is very good news both for Bank Mellat and also for Iran and the Iranian people. It not only shows to the world that Iran is an enlightened ancient civilisation which believes in the principle of the Rule of Law but today's ruling paves the way for Bank Mellat to freely trade which will further enhance its stagnant economy."
It may be recalled that in order to strengthen efforts to combat Iran's nuclear proliferation-sensitive activities and the development of nuclear weapon delivery systems in Iran, the Council froze the funds of various Iranian financial entities, including Bank Mellat, 1 from 2010 onwards.
The reasons given for freezing Bank Mellat's funds were essentially as follows: 'Bank Mellat engages in a pattern of conduct which supports and facilitates Iran's nuclear and ballistic missile programmes. It has provided banking services to United Nations and EU listed entities or to entities acting on their behalf or at their direction, or to entities owned or controlled by them. It is the parent bank of First East Export [FEE] which is designated under United Nations Security Council Resolution 1929'.
Bank Mellat successfully challenged the freezing of its funds before the General Court.2. The Council subsequently appealed to the Court of Justice to have the General Court's judgment set aside. In today's judgment, the Court of Justice, confirming the principles established in Kadi II,3 found, as did the General Court, that the first two sentences of the reasons set out above do not enable Bank Mellat to establish specifically which banking services it provided to which entities, particularly as the persons whose accounts were managed by Bank Mellat are not identified.
As regards the reason citing the fact that Bank Mellat is the parent company of FEE (designated by the United Nations Security Council), the Court of Justice notes that, according to the General Court's findings, the Council did not produce any evidence that would have enabled the courts of the EU to determine whether that reason was well founded.
The Court of Justice also declared that justifying the freezing of Bank Mellat's funds on the basis of the freezing of FEE's funds, when FEE was designated in the United Nations resolution because of the very activities being carried out by Bank Mellat, is a circular argument.
As regards the Council's argument that the evidence concerning Bank Mellat's support for Iran's nuclear activities comes from confidential sources which, if disclosed, would enable those who provided the information to be identified (which could endanger their safety and their lives), the court noted that that argument was relied on for the first time at the stage of the appeal, and is therefore inadmissible.
The Court of Justice therefore dismissed the Council's appeal.