## Facts

- Bank Mellat, an Iranian bank, was subject to a UK Treasury direction prohibiting UK financial institutions from conducting any transactions with it.
- The direction was issued under the Counter-Terrorism Act 2008 to prevent Iran from acquiring nuclear weapons.
- Bank Mellat challenged the direction, arguing that it was unlawful, discriminatory, and disproportionate.

## Issues

1. Whether the Treasury's direction pursued a legitimate aim.
2. Whether the measure was rationally connected to that aim.
3. Whether the measure was necessary to achieve the objective.
4. Whether the direction struck a fair balance between the rights of Bank Mellat and the public interest.
5. Whether sufficient justification and evidence supported the singling out of Bank Mellat.

## Decision

- The Supreme Court found in favour of Bank Mellat.
- The Court held that the direction was unlawful because it was disproportionate.
- The Treasury did not sufficiently justify singling out Bank Mellat, nor did it demonstrate that the direction was the least restrictive means to achieve the stated objective.
- The direction failed several components of the proportionality test, particularly with respect to rational connection, necessity, and fair balance.
- The Court emphasised the need for careful evidence and reasoned justification when imposing drastic financial measures.

## Legal Principles

- The Court articulated a structured four-part proportionality test for asset-freezing measures:
  - Is there a legitimate aim?
  - Is the measure rationally connected to the aim?
  - Is the measure necessary for achieving the aim?
  - Does the measure strike a fair balance between individual rights and the public interest?
- Asset-freezing measures require rigorous scrutiny and clear justification, especially when they interfere with fundamental rights.
- The judiciary retains an important role in reviewing executive action, even in national security contexts.
- Consideration of less restrictive alternatives is essential in proportionality assessments.

## Conclusion

The Supreme Court held that the asset-freezing direction against Bank Mellat was unlawful due to a lack of proportionality and inadequate justification, establishing a structured proportionality test that serves as a standard for scrutinising financial sanctions impacting individual rights.

Bank Mellat v Her Majesty's Treasury [2013] UKSC 39