Iran sues MoD firm over the Shah's tanks

Thirty-five years and one revolution later, the row over non-supply of military vehicles worth £650m rumbles to High Court

The Iranian government is taking a Ministry of Defence-owned company to the High Court to end a £400m row over British-made Chieftain tanks that has dragged on for 35 years.

At the centre of the dispute are hundreds of tanks paid for by Tehran but never delivered as a result of the 1979 Iranian revolution. The Shah of Iran had ordered 1,750 tanks and support vehicles for £650m from International Military Services (IMS) before he was toppled, whereupon the deal was cancelled. Only 185 were delivered and Iran has wanted its money back ever since. The International Chamber of Commerce sided with Tehran in an arbitration concluded in 2009.

The dispute was thought to have been settled in 2010, but has been further prolonged by bizarre negotiation tactics from Tehran, secretive meetings in Istanbul, and postponement of legal proceedings due to a change of judge.

IMS set aside hundreds of millions of pounds more than a decade ago in case international courts later ruled against the firm. In 2010, it was expected that IMS would transfer to an account holding Iranian assets more than £390m, which Tehran could not touch because of EU sanctions.

IMS was then to be wound down, but the MoD's shareholding of all but one of the firm's 20 million shares is still noted deep in the department's annual accounts. Ministers have refused to disclose details of what happened in the years in between.

However, The Independent on Sunday can reveal that Iran will again chase IMS for nearly £400m in the High Court this summer.

IMS directors, led by chairman and former senior MoD official Sir Roger Jackling, thought an agreement had been struck with the Iranians after the 2009 ruling and the company ceased any trading activities in February 2010. Iranian negotiators and IMS met in July 2010 and March 2011 to iron out the details of what was thought to be a final settlement. But the Iranians then went quiet.

A meeting with an Iranian justice minister took place in Istanbul early last year, and there have been what are described as "informal" talks in London. Iran tried to take IMS to the High Court last summer, but the British team was concerned that the judge's expertise was in property litigation rather than in sensitive international contractual battles. The case was delayed, but is due to begin later this year, much to the bemusement of British officials who feel "there is very little between" the two parties on what is owed and how monies can be offset and transferred.

MoD officials are still hopeful that a negotiated settlement could be completed before the latest legal action starts, but there is some speculation that Tehran's brokers would rather resolve the issue through a court ruling than appear to have compromised in any way.

In IMS's latest annual report, the board states: "Once all these issues have been resolved, the intention is to liquidate the company."

Alison Seabeck, shadow Defence minister, said: "It is unclear why the MoD didn't... try to clear the matter off its books [or why it] went for a deferment of the court case last year."

An MoD spokesman said: "No money will 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."

 

 

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

SEN Learning Support Assistant vacancy in Penarth

£55 - £65 per day + Travel Scheme and Free Training: Randstad Education Cardif...

Key stage 1 and 2 teachers required for the Vale of Glamorgan

£90 - £110 per day + Travel Scheme & Free Training: Randstad Education Cardiff...

Foundation Phase Teacher required

£90 - £110 per day: Randstad Education Cardiff: Exciting opputunities availabl...

Learning Support Assistant

£65 - £70 per day: Randstad Education Cardiff: Due to the continual growth and...

Day In a Page

Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
How live cinema screenings can boost arts audiences

How live cinema screenings can boost arts audiences

Broadcasting plays and exhibitions to cinemas is a sure-fire box office smash
Shipping container hotels: Pop-up hotels filling a niche

Pop-up hotels filling a niche

Spending the night in a shipping container doesn't sound appealing, but these mobile crash pads are popping up at the summer's biggest events
Native American headdresses are not fashion accessories

Feather dust-up

A Canadian festival has banned Native American headwear. Haven't we been here before?
Boris Johnson's war on diesel

Boris Johnson's war on diesel

11m cars here run on diesel. It's seen as a greener alternative to unleaded petrol. So why is London's mayor on a crusade against the black pump?
5 best waterproof cameras

Splash and flash: 5 best waterproof cameras

Don't let water stop you taking snaps with one of these machines that will take you from the sand to meters deep
Louis van Gaal interview: Manchester United manager discusses tactics and rebuilding after the David Moyes era

Louis van Gaal interview

Manchester United manager discusses tactics and rebuilding after the David Moyes era
Will Gore: The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series

Will Gore: Outside Edge

The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series
The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz