(Bloomberg) -- The U.K. government settled a 1.3 billion-pound ($1.6 billion) damages claim brought by an Iranian bank over a trading ban just as a "costly and potentially embarrassing" five-week trial was set to begin.
The U.K. and Bank Mellat settled the London lawsuit for an undisclosed sum, a spokesman for law firm Zaiwalla & Co., which represented the bank, said in a statement. The government has spent 35 million pounds defending the claim, he said.
Mellat sued the U.K. Treasury after its operations were effectively banned from the country's financial sector. The U.K.'s highest court had earlier found that the order was unlawful.
The U.S. Treasury placed financial sanctions on Bank Mellat, which is 20% owned by the Iranian government, in October as part of wider sanctions reimposed on Iran. The sanctions followed the U.S. administration's decision to withdraw from the seven-nation Iran nuclear deal in May 2018.
The settlement was reported earlier Tuesday by the Financial Times.
To contact the reporter on this story: Jonathan Browning in London at jbrowning9@bloomberg.net
To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net
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