The Court of Appeal is due to hold a two-day hearing on Wednesday and Thursday this week to make a decision over whether interest is payable on a long outstanding debt that the UK is expected to pay back to Iran. The debt dates back to the 1970s and concerns a payment that Iran had made to purchase 1,500 Chieftain tanks and armoured vehicles that were not delivered. Although Iran had made an upfront payment, the contract was subsequently cancelled when the Shah of Iran was deposed in 1979. The funds were not returned to Iran.
Although all parties have denied it, it’s been understood that the UKs refusal to pay the outstanding debt is likely to have been a key obstacle to the release of dual-national, Nazanin Zaghari-Ratcliffe, wife of Richard Ratcliffe.
Even if the amount is settled this week the Ministry of Defence has expressed a view that the UK may be unable to pay the debt as Iran is currently subject to EU sanctions. However the Defence secretary, Ben Wallace, is hoping that the UK might be able to off-set the debt through providing humanitarian aid instead (i.e. food and medicine) and it’s understood that Iranian officials are considering visiting London to discuss options.