UK to repay Iran $650m for Shah’s tanks

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, The Independent reported on Sunday.

In 2010 an international trade court ordered Britain to pay Iran $650 million for failing to deliver some 1,300 tanks after Shah Mohammad Reza Pahlavi was toppled in the 1979 Islamic revolution, officials said.

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, according to The Independent Iran will again chase IMS for nearly £400m in the High Court this summer.

The settlement is between International Military Services Ltd, the state-owned company used by Britain’s Defense Ministry that concluded the Chieftain deals in the 1970s, and Iran’s Ministry of Defense.

In the 1970s, the shah’s government was favored by the United States and Britain as a vital bulwark against Soviet expansion to the strategic oil-rich Gulf.

From 1971-76, his government ordered 1,500 Chieftains and 250 FV2404 armored repair vehicles, which retrieve damaged tanks from the battlefield, all manufactured by the Leyland Co. and Britain’s state-owned Royal Ordnance Factories.

The contracts were worth 650 million pounds, today worth around $1.04 billion, and were paid in full in advance from the shah’s treasury, then overflowing thanks to Iran’s oil wealth.

By Nasim Online

 

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