British expect to end £300m dispute with Iran over tanks ordered in 1976

British expect to end £300m dispute with Iran over tanks ordered in 1976
Ironically, many of the Chieftain tanks not delivered to Iran instead went to Iraq and ended up lined up against the Iranians in the Iran-Iraq war.
By bne IntelliNews November 16, 2017

The British Foreign Office said on November 16 that it hopes to soon settle a longstanding dispute with Iran over around £300m owed to the Iranian government for Chieftain tanks ordered in 1976 but never delivered.

The matter might be brought to a conclusion during British Foreign Secretary Boris Johnson's visit to Iran, set to take place in the near future. However, Downing Street has insisted that there would be no linking of the issue to the effort to secure the release of Iranian-UK dual national Nazanin Zaghari-Ratcliffe, serving a five-year jail sentence for spying. Her case made international headlines after Johnson erroneously stated earlier this month that she was training journalists in Iran prior to her arrest, while her family have insisted all along that she was simply in Iran for a holiday. Johnson has since apologised.

The Guardian reported on November 15 that the chances of a settlement in the Chieftain tank dispute are high since both sides have given ground over the precise sum involved and because of the economic sanctions that were lifted as part of the late 2015 nuclear deal. The newspaper said that Ben Wallace, the current Home Office security minister, stated in 2014 before he took the role that the UK government’s approach to the case was “un-British, double-dealing and obfuscatory”.

Forty one years ago, £600m was paid upfront by Tehran to International Military Services (IMS), then a subsidiary of the UK Ministry of Defence but now only a shell company, for 1,750 Chieftain tanks. However only 185 tanks had been delivered prior to the fall of the shah in the Islamic Revolution of 1979 which prompted the British to ban arms exports to Iran. Ironically, the remainder were sold to Saddam Hussein and many were deployed against Iran in the Iran-Iraq war.

In 2001, the Paris-based International Chamber of Commerce said after arbitration that IMS should pay Iran £390m. A further UK legal challenge led in 2009 to the Dutch supreme court slightly reducing the sum. The UK then contended that it could not make any payment because Iran was by now subject to EU sanctions.

In 2013, Iranian officials attempted to press for payment via a UK court enforcement order, but when they arrived at Heathrow airport they had their visas cancelled and were deported.