Investment Fraud Case Studies in Iran

In recent years, Iran has been embroiled in several high-profile investment fraud cases that have sent shockwaves through the international business community. From telecommunications giant Turkcell’s disputed bid for a mobile phone license to the abrupt closure of Future Bank, these cases highlight the risks and challenges faced by investors operating in the Islamic Republic.

Case Studies

Case 1: Turkcell v. Iran (2008)

In one of the earliest and most notable cases, Turkish telecoms company Turkcell took Iran’s government to court over a disputed bid for a mobile phone license. Turkcell had been awarded the contract, but Iranian authorities later cancelled it, citing a change in legislation that required the winner of the tender process to be a majority-owned domestic company. The case was ultimately decided in favor of the Iranian state.

Case 2: Bahari v. Azerbaijan (II) (2022)

More recently, an Iranian investor has taken Azerbaijan’s government to court over alleged investment fraud. The dispute centers on a failed agreement for the acquisition of a majority stake in a local company. The case is still pending.

Case 3: Central Bank of Iran v. Bahrain (2021)

In another ongoing case, the Central Bank of Iran has sued Bahrain’s central bank over the sudden closure of Future Bank in 2016. The Iranian bank had invested heavily in the commercial lender before its collapse. The case is still pending.

Case 4: Dayyani and others v. Korea (II) (2021)

An Iranian investor has also taken South Korea to court over a disputed deal for the acquisition of a majority stake in Daewoo Electronics. The claimant alleges that the sale was terminated without just cause, and seeks damages. The case is still pending.

Case 5: Bahari v. Azerbaijan (I) (2019)

In an earlier iteration of this dispute, an Iranian investor took Azerbaijan’s government to court over a failed agreement for the acquisition of a majority stake in a local company. The case was decided in favor of the investor.

Case 6: Bank Melli and Bank Saderat v. Bahrain (2017)

Finally, two Iranian banks have sued Bahrain’s central bank over its decision to close Future Bank in 2016. The banks had invested heavily in the commercial lender before its collapse. The case was decided in favor of the investors.

Conclusion

These cases highlight the risks and challenges faced by investors operating in Iran and abroad. As the country looks to re-engage with the international community, it will be important for foreign investors to carefully weigh the potential benefits against the legal and regulatory risks involved.