Fear of prosecution in Iran is not reason to withhold documents from disclosure required by the courts in England and Wales, Court of Appeal judges have ruled in the latest development in long running litigation between Bank Mellat and the UK Treasury.
Bank Mellat, which is partly owned by the Iranian government, is seeking damages under the Human Rights Act for losses of $1.7bn it says it suffered as a result of restrictions placed on it by HM Treasury in 2009 over allegations of involvement in Iran's weapons programme. In 2013 the Supreme Court ruled the restrictions unlawful. A trial is fixed for June.
The latest decision in Bank Mellat v Her Majesty’s Treasury, described by Lord Justice Gross as 'massive and complex' litigation, relates to records the bank intends to produce to demonstrate its losses. Some 12,500 of these documents contain confidential data about identifiable customers. Up to now, they have been produced in redacted form, with the bank claiming under civil procedure rules that it has a 'right or duty to withhold' inspection if to do so would expose it to the risk of criminal prosecution.
HM Treasury however said that the documents should be provided unredacted to members of a 'confidentiality ring' and more widely in ciphered form. In the High Court last September, Mrs Justice Cockerill ruled in its favour, saying that Bank Mellat had failed to produce evidence that was a real risk of prosecution for involuntary production.
On appeal, Bank Mellat argued that the judge had misunderstood expert evidence and drawn her own inferences, straying outside permissible bounds. Gross LJ rejected this, saying 'I am in no doubt that the needs of the litigants - and the litigation - for the production of the Iranian documents unredacted, should trump the concerns as to Iranian law'. Lord Justice Peter Jackson and Lord Justice Coulson agreed.
The judgment hints at future complications in the long-running case. It notes an 'an inherent element of threat' in an indication from the bank that it would not comply with any disclosure order. This was 'deeply unattractive... this court does not contemplate that its orders would not be obeyed and is unmoved by this indication on behalf of the bank.'
The appeal judges also express concern that no judge has yet been designated for the case, noting that the next case management conference is scheduled for 9 May. 'We express and imply no criticism [of the Commercial Court] but, on the face of it, designation of a judge to grip these proceedings from now up to and including the trial is overdue and a 9 May date for the next CMC strikes us as worryingly late.'
Timothy Young QC, Amy Rogers and Rupert Paines, instructed by London firm Zaiwalla & Co, appeared for the appellant; David Foxton QC, Philippa Hopkins QC and Helen Morton, instructed by the Government Legal Department, for the respondent.