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Iran to sue UK government firm over tank deal | ASHARQ AL-AWSAT English Archive 2005 -2017
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Former British foreign secretary Jack Straw speaks during a press conference at the Iranian parliament in Tehran on January 8, 2014. (EPA/ABEDIN TAHERKENAREH)

epa04012517 Former British foreign secretary Jack Straw (F) speaks during a press conference, at the Iranian parliament in Tehran, Iran, 08 January 2014. Straw said that London was improving diplomatic ties with Tehran after a two-year estrangement. Straw also hoped that the nuclear agreement reached last November between Iran and the six world powers in Geneva would be implemented for ending nuclear dispute and ending financial sanctions against Iran. EPA/ABEDIN TAHERKENAREH

Former British foreign secretary Jack Straw speaks during a press conference at the Iranian parliament in Tehran on January 8, 2014. (EPA/ABEDIN TAHERKENAREH)

London, Asharq Al-Awsat—The Iranian government is set to launch a legal case against a company owned by the British Ministry of Defence (MoD) over a defunct arms deal more than 35 years old, a British newspaper has revealed.

The London-based Independent on Sunday reported that Iran will go the the Uk’s High Court later this year to seek almost 400 million pounds (657 million US dollars) in relation to an order for Chieftan tanks placed by the shah of Iran in the late 1970s.

The shah paid 1 billion dollars up front for 1,500 tanks and 250 repair vehicles. Delivery of the tanks was halted with less than 200 in Iranian service following the 1979 revolution and the toppling of the shah, leading Iran to seek a refund from International Military Services Ltd (IMS), which is owned by the British government.

An MoD spokesperson told Asharq Al-Awsat: “No money will be paid to Iran while EU sanctions remain in place. Settlement negotiations between International Military Services Ltd and the Iranian regime are ongoing and no agreement has yet been reached.”

According to Independent on Sunday, the row was thought to have been settled in 2010 after an international arbitration panel ruled in Iran’s favor, but has been further prolonged by unusual negotiation tactics from Tehran, secretive meetings in Istanbul, and postponement of legal proceedings due to a change of judge.

In 2010, it was expected that IMS would transfer more than 390m pounds to an account holding Iranian assets, which Iran could not access because of EU sanctions against the country overs its nuclear program.

Observers speculate that the Iranian government is seeking the propaganda coup of a court victory rather than a negotiated settlement as it continues international negotiations with world powers over its nuclear program, in a bid to appease conservative elements in the country suspicious of any interaction with the US, the UK, and other Western states.

The UK and Iran have recently begun moves to patch up relations, appointing non-resident charge d’affaires after the two states shut down their embassies in 2011, following a protest which damaged the British embassy in Tehran.

A British parliamentary delegation also visited the country last month.

On the nuclear issue, Iran reached a preliminary deal with the five permanent UN Security Council members plus Germany on November 24 over its nuclear program.

As part of the agreement, the US and the EU have lifted some of the financial restrictions on Iran’s economy after Tehran ceased uranium enrichment to 20 percent. Iran has also pledged to dilute half of the stockpile of the already enriched material.

Diplomats from the P5+1 (US, China, Germany, Britain, France and Russia) are expected to meet with representatives from Iran on February 18 in Vienna to discuss the terms for a permanent deal.