The highest court in the land controversially sat in secret for the first time in its history today but insisted it had reached the decision with "great reluctance".
The ruling is highly significant at a time when the Government's contentious plans for secret courts have caused outrage amongst human rights groups and led to several high profile Liberal Democrat resignations.
Today Lord Neuberger, President of the Supreme Court, said that he and his fellow eight justices has agreed to hold a closed hearing in the case of an appeal by an Iranian Bank, banned from trading with British companies under the counter terrorism act.
The UK’s most senior judge, who has always advocated open justice, said that they were “dubious” and “sceptical” about the Government legal team’s claim that they could not deal with the appeal justly without hearing its secret evidence but had agreed to a closed hearing to consider it.
“It must be emphasised that this is a decision which is reached with great reluctance by all members of the court; indeed it is a majority decision,” said Lord Neuberger.
Bank Mellat is appealing sanctions imposed by the Treasury in 2009, claiming it was unfairly accused of alleged links with Iran's nuclear and ballistic missile programmes and the order is “irrational and disproportionate”.
Government evidence – kept secret on the grounds of national security - was considered by Mr Justice Mitting at the High Court when he made the order. Lawyers for the Government insisted that the Supreme Court justices would not have the full picture without considering the secret evidence while those representing the Iranian bank argued that such material – which it cannot see or defend itself against – should be excluded.
During legal submissions earlier this week, it was argued that the Supreme Court’s constitutional status meant that there was a greater burden on it to keep its work public than on lower courts. However, it would be in an unsatisfactory position if it was not allowed to see evidence on which the lower court made a judgement.
“No judge can face with equanimity the prospect of a hearing, or any part of a hearing, which is not only in private, but involves one of the parties not being present or represented,” said Lord Neuberger today, adding: “Nonetheless, as Parliament has decided that, in certain circumstances, such a procedure is necessary and permissible in a trial before a Judge, we have concluded that, on an appeal from a decision in a case where a Judge has considered closed material and given a closed judgment, it may be necessary for this court to go into closed session in order to dispose of the appeal justly.”
During the 40-minute closed session, the nine justices considered secret parts of Mr Justice Mitting’s judgement. Barristers representing the Treasury as well as Bank Mellat were present, though the latter cannot reveal details to the bank.
The Supreme Court said that it would only consider the secret evidence if it deemed it “absolutely necessary” and every effort would be made to give Bank Mellat as much access to information as possible.
Lord Neuberger added: “No doubt in due course when we have completed the closed hearing and (Michael Brindle QC, the barrister for Bank Mellat) has made his closing submissions, and we in due course consider the matter and give our judgment, we will have quite a few things to say about this unhappy procedure.”
Sarosh Zaiwalla of Zaiwalla & Co, the London law firm representing the bank, said: “Although they do so with the greatest reluctance, The Supreme Court have said they will look at the closed judgement.
“HM Treasury are clutching at straws in their insistence that the Court should consider the closed judgement and I am confident that they will find nothing to justify HM Treasury’s decision to designate it.
“Britain is internationally recognised as a beacon of open justice and parties from all over the world come to the UK because of this. It is therefore of international concern that the United Kingdom’s Parliament has given the right to the Court to use this closed evidence procedure.”