Mellat v HM Treasury

Mellat v HM Treasury

The Supreme Court's finding was of unlawfulness under section 6(1) HRA due to incompatibility with A1P1; the rule against reflective loss applies in principle under Strasbourg jurisprudence but does not bar Bank Mellat's claim for diminution in PIB's earnings as PIB could not have sued; damages are not limited to direct interference with 'possessions' but may include consequential losses (such as future profits) if causally linked to the unlawful interference with possessions, subject to proof at trial.

Parties
Claimant: Bank Mellat; Defendant: Her Majesty’s Treasury
Jurisdiction
England and Wales
Judgment Date
06 May 2015
Procedural Posture
Civil (commercial, Human Rights) / Judgment on Preliminary Issues
Outcome
Preliminary issues determined in favour of Bank Mellat on all points.
Legal Topics
Damages Under Human Rights Act, Article 1 Protocol 1 ECHR (a1 P1), Reflective Loss, Possessions Under A1 P1, Restitutio in Integrum, Judicial Review, Proportionality and Rationality, Goodwill as Possession
Human Rights Commercial Law Administrative Law Damages Under Human Rights Act Article 1 Protocol 1 ECHR (a1 P1) Reflective Loss Possessions Under A1 P1 Restitutio in Integrum +3 more

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Parties

Bank Mellat

Claimant

Her Majesty’s Treasury

Defendant

Procedural Posture

Civil (commercial, Human Rights) / Judgment on Preliminary Issues

Legal Issues

  1. 1 Whether the Supreme Court's finding of unlawfulness was under common law or section 6(1) HRA (incompatibility with Convention right)
  2. 2 Whether the rule against reflective loss applies to damages under section 8 HRA and A1P1
  3. 3 Whether damages are limited to interference with 'possessions' as defined under A1P1 or can include consequential/future losses

Ratio Decidendi

The Supreme Court's finding was of unlawfulness under section 6(1) HRA due to incompatibility with A1P1; the rule against reflective loss applies in principle under Strasbourg jurisprudence but does not bar Bank Mellat's claim for diminution in PIB's earnings as PIB could not have sued; damages are not limited to direct interference with 'possessions' but may include consequential losses (such as future profits) if causally linked to the unlawful interference with possessions, subject to proof at trial.

Court Disposition

Preliminary issues determined in favour of Bank Mellat on all points.

Orders

  • It is not open to the Defendant to contend that it did not act incompatibly with a Convention right under section 6(1) HRA.
  • The Bank is not barred by the rule against reflective loss from pursuing claims for diminution in subsidiary earnings, including PIB.