Iran's central bank will challenge the legality of President Carter's order freezing assets as it applies to Iranian deposits outside of U.S. territorial control.
Governor Ali Reza Nobari of the central bank said in Tehran he plans to sue Bankers Trust Co's London branch for seizing $68 million in deposits on Nov. 15, the day after Carter's order.
From the start, outsiders have questioned whether the U.S. order is applicable in other jurisdictions. An authoritative British source said "He had no doubt" that if Iran pursues the issue through British courts, "they will win hands down."
The Bank of England has publicly side-stepped the assets question, although authorities there are paid to be privately dubious about the wisdom of trying to attach assets physically located outside of the United States.
If the courts rule in favor of Iranian authorities seeking to recover their deposits, the British government is expected to help enforce the order. Failure to comply, a source said, could result in a bank being excluded from future operations in Great Britain.
At a press conference in London Wednesday on his return from a Middle East trip, U.S. Treasury Secretary G. William Miller indicated that while U.S. allies were sympathetic to the U.S. decision to hold Iranian assets, he had no promise of support from the British on the jurisdictional question.
After a talk with Chancellor of the Exchequer Sir Geofrey Howe, all Miller was able to say was that they had agreed the matter concerned "concurrent jurisdiction" of international law, and that any legal matters would be settled by due process.
Governor Nobari told the Associated Press that Bankers Trust had no right to seize its deposits, held by Bankers Trust against a loan in the same amount to Iranian banks and private companies. In New York, Bankers Trust officials said its action was the same as taken by other American banks and "we continue to believe that our action was proper in every respect."
Meanwhile, Chase Manhattan Bank -- which also had seized Iranian deposits in its foreign branches -- said that as the agent bank for loans made sy sydicates to Iran, it had called for a meeting in London next week to discuss the situation.
All told, 11 european or Japanese banks are involved in the Chase-led syndicates. Sources said Chase wants to know whether Iran should be declared in default on those loans.
The Dow Jones news service reported that Japanese banks in the syndicate are inclined to say "no" to Chase, believing that Iran is willing to pay its loans but is unable to do so because of the American order freezing Iranian assets.
They cite a repayment this week by Iran of part of a $50 million loan in which the lead bank was Sumitomo Bank Ltd. of Tokyo. This is taken as a sign that Iran intends to fulfill its obligations, starting with those syndicates not led by a U.S. bank.
Meanwhile, the U.S. Treasury modified the freeze order to allow, among other things, payment in "hardship cases" to small exporters to Iran, limited to $500,000 for any single exporter.