WANA (Apr 29) – The International Court of Justice in The Hague has rejected the complaint filed by the government of Bahrain and upheld the ruling requiring Bahrain to pay €214 million in damages to two Iranian banks.

 

In the case involving Future Bank, the Hague court confirmed the verdict that obligates Bahrain to compensate the Iranian banks, following Bahrain’s unsuccessful attempt to challenge the previous decision.

 

Future Bank, founded in Bahrain in 2004, was established as a joint venture between Iran’s Bank Melli, Bank Saderat, and Bahrain’s Ahli United Bank.

 

In 2008, the bank was placed on the United States sanctions list, and in 2015, under allegations including money laundering, violation of the nuclear deal, and breach of U.S. sanctions, its management was taken from the shareholders.

 

The Bahraini government handed over the bank’s administration to the Central Bank of Bahrain and took direct control of it. In 2017, the Iranian banks filed a complaint with the Permanent Court of Arbitration under UNCITRAL arbitration rules.

 

After navigating various legal and procedural challenges, the tribunal ultimately issued a ruling condemning Bahrain and ordering the payment of €214 million in damages to the Iranian banks.

 

Following the ruling, Bahrain filed an appeal with the International Court of Justice. However, the ICJ also rejected Bahrain’s complaint and upheld the compensation order.

 

In summary, the ruling concluded that Bahrain’s allegations regarding Future Bank’s involvement in illegal activities were unproven. Traces of such activities were only found after the Central Bank of Bahrain had already assumed control of the bank, which the court did not accept as a valid justification.

 

The court further noted that the decision by Bahrain’s Crisis Management Committee to transfer Future Bank’s administration to the Central Bank was made “without any thorough investigation or supporting evidence.”

 

Finally, the court stated that the political dimensions of the case could not be ignored and deemed Bahrain’s expropriation of Future Bank to be politically motivated. As a result, Bahrain has been ordered to pay €214 million in damages to Iran’s Bank Melli and Bank Saderat.