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Mon 14 May 2012 02:05 PM

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EXCLUSIVE: UAE firm may seek damages over EU Iran claims

Accountant says it spent US$109,000 providing it is not a front for Tehran regime

EXCLUSIVE: UAE firm may seek damages over EU Iran claims
Morison Menon Chartered Accountants brought action against the EU in December 2011.

A UAE firm cleared of European Union allegations it was operating as a front for the Iranian government is seeking to recover costs involved in fighting its case and is considering seeking compensation for the damages, Arabian Business has learned.

Morison Menon Chartered Accountants (MMCA) brought legal action against the Council of the European Union in December 2011 after its name was added to a list of companies suspected of being “involved in the nuclear or ballistic missile programmes of the Islamic Republic of Iran”.

Following an investigation, MMCA was found innocent of claims it was operating as a front for the Islamic Republic of Iran Shipping Lines (IRISL) by the European Communities Court of Justice in Luxembourg, and removed from the list on April 24.

“They have given a letter saying that no circumstances exist now to continue the listing,” Raju Menon, managing partner of MMCA, told Arabian Business in an interview.

“We assisted [IRISL] to set up some companies [in the UAE] but that is only a professional capacity and it was done before the date [for EU sanctions]… but because the IRISL name is involved and without doing any due diligence, or without giving us any phone call, somebody listed us,” Menon said in a previous interview.

The firm, which has offices in Dubai, Abu Dhabi, Ras Al Khaimah and Sharjah and is licenced by the Dubai government, said it has already lodged a claim to be reimbursed for its legal costs.

“You cannot expect... [an apology] but you can ask for your costs, which we have already file. Lawyers costs could be somewhere in the region of AED400,000 (US$108,896)… It was not a cheap case,” Menon said.

In court documents, MMCA’s lawyers claimed “it is very probable that banks located in the UAE will remove them from their approved list of auditors, which will result in an additional loss of clients and that those banks will no longer use the applicants [Morison Menon] for the auditing of their trust accounts”.

Menon confirmed it had lost clients as a result of the listing and its senior partners had to redirect time to fighting the case and MMCA was now considering seeking compensation for damages.

“We lost a few clients… We can definitely ask for damages,” he said. “Even just the time we spent. Three senior partners have been spending close to 60 days on this… So that can run to probably AED1.5m (US$408,400)

Rising tension over Iran’s nuclear programme prompted the European Union and the US to impose additional sanctions on the Islamic Republic, restricting trade and financial transactions.

Iran, the second-largest producer in the Organisation of Petroleum Exporting Countries, after Saudi Arabia, is already under four rounds of UN sanctions.

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