The Commercial Court has granted summary judgment to Bank Melli, Persia International Bank and a German bank (DVB Bank SE) to recover over €40 million outstanding under a syndicated post-delivery ship finance facility from a number of Iranian ship owning companies, and to DVB against a number of Iranian guarantors including the Islamic Republic of Iran Shipping Lines in respect of the default under the loan facility.  The case follows a line of similar cases, including Melli Bank v Holbud Limited (see previous blog).

The Court held that the borrowers and guarantors had no prospect of succeeding in their argument that they did not have to repay the sums because the European Union sanctions against Iran frustrated performance of the contract, or made it illegal or impossible to perform because it would have constituted the provision of “economic resources” or the making available of “funds” by increasing equity in the vessel.  Mr Justice Simon stated that this was “not the effect of the Regulations nor is it consonant with their broad intent.”

He rejected the argument that payment under the contract constituted the provision of “economic resources” or would breach the asset freeze, since the agreement was not an asset but an instrument imposing liability to repay; the assets of designated persons were frozen but not the discharge of their liabilities.  Any payments received by the Iranian banks would be paid into frozen accounts with authorisation from the relevant national authority and the borrowers had not tried to obtain a licence. The Court also rejected the borrowers’ application to make a preliminary reference to the European Court of Justice on the meaning and effect of the relevant EU Iran sanctions regulations.

The judgment, handed down on 31 July 3013, is here: Bank Melli and Persia International Bank -v- Shere Shipping and ors [2013] EWHC 2321 (Comm).

This entry was posted in English court cases, Iran and tagged by Maya Lester. Bookmark the permalink.

About Maya Lester

Maya Lester is recommended in the legal directories as a leading junior in the fields of Administrative & Public Law, Competition & European Law, Civil Liberties & Human Rights. She was selected by The Times as one of the 10 Future Stars of the Bar in 2008, and was nominated in 2010 and 2011 for Competition/EU Junior of the Year at Chambers Bar Awards. She has particular expertise in European Union and United Nations targeted sanctions, and has represented hundreds of designated individuals and companies in the European courts. She has extensive experience of all areas of Competition and European Union law, including in relation to regulatory investigations, abuse of dominance, cartels, free movement, fundamental rights and freedoms, actions for annulment in the General Court, and references to the Court of Justice. She is described as "stellar" (Chambers & Partners 2013), "fiercely bright and hardworking" (Legal 500 2012), and a "top-notch performer" (Chambers & Partners 2011). In her wide ranging Public Law, Human Rights and Public International Law practice, Maya Lester regularly appears for and advises individuals, companies, government departments, regulators and public interest groups. She is a member of the Attorney General's B Panel of Junior Counsel to the Crown and Freedom of Information Panel, and is vetted for National Security work. She is described as "a fantastic junior" in Administrative & Public Law, and "clearly very bright and focused" with "great attention to detail". Maya Lester is regularly involved in cases of an international nature, having been educated at Yale Law School (after Cambridge University), Columbia Law School (New York) as a Visiting Scholar, has spent time working at the European Court of Justice and is currently a Bingham Centre Fellow researching targeted sanctions regimes.

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