Five decades later, UKEF-backed Iran missiles deal lands in court

Global Trade Review, London, 17 April 2023) UKEF is suing BAE Systems, one of its biggest clients, over contracts for the supply of missiles to Iran in the 1970s. The UK’s export credit agency is trying to recover £13.9mn it paid to the defence and aerospace giant in the 1980s, under three export credit insurance policies issued between 1973 and 1977. A trial is set for London’s High Court on May 8. The government guaranteed contracts for the supply of weapons, spares and maintenance for BAC’s Rapier surface-to-air missile systems to Iran, then led by the Western-backed autocrat Shah Mohammed Reza Pahlavi. In around 1980, BAC called on the guarantees due to “their Iranian counterparty’s non-performance” under the contracts, according to UKEF’s statement of claim in the case. The document does not describe the reason the contracts fell apart but in 1979 the Shah was overthrown by a popular uprising that became the Islamic Revolution, and was replaced by a clerical regime hostile to the UK.