LONDON - Western government sanctions against Iran suffered a big setback on Wednesday when Britain's top court ruled that the government was wrong to have imposed sanctions on the biggest Iranian private bank over alleged links to Tehran's nuclear program.
The Bank Mellat case and 50 more like it pending at the European Union's General Court have cast a cloud over the future of EU sanctions and alarmed Washington, which relies on European support to throttle Iran's links to the global economy in hopes of getting it to curb its disputed pursuit of nuclear power.
The British Supreme Court decision on Wednesday echoed a January ruling by the EU's General Court, which overturned sanctions imposed in 2010, and paves the way for Bank Mellat to sue Britain for damages.
A bank spokesman told Reuters on Wednesday that it is considering launching a claim against Britain that "could exceed 500 million pounds".
Supreme Court Judge Jonathan Sumption ruled that the British government had been "arbitrary", "irrational" and "disproportionate" to single out Bank Mellat for sanctions.
A British government spokeswoman said it was "disappointed" with the decision and was "considering the judgment and its implications for any future orders (for sanctions)".