Already a Bloomberg.com user?
Sign in with the same account.
A decision to award $23.9 million in compound interest to McKesson Corp. (MCK) in a 30-year dispute over a dairy seized by the Iranian government during the country’s 1979 revolution was reversed by an appeals court.
U.S. District Judge Richard Leon in Washington ruled in November 2010 that Iran violated its own laws and international laws when it took control of Pak Dairy Co. and withheld dividends from San Francisco-based McKesson.
Leon awarded McKesson about $44 million, including $23.9 million in compound interest. An appeals court in Washington today reversed the decision to grant compound interest and sent the decision back to the lower court to recalculate the award.
“In light of the utter lack of evidence indicating that compound interest is a recognized remedy under Iranian law, we reverse that portion of the award,” the appeals court said. “However, because Iran does not challenge the award of simple interest in this case, we remand for calculation of an award consisting of the value of McKesson’s expropriated interest in Pak and its withheld dividends plus simple interest.”
The parties have been fighting since at least 1982 over the dairy, which, according to court records was created in 1960 by McKesson and a group of Iranian investors. The case has been the subject of several appeals over jurisdiction.
The case is McKesson Corp. v. Islamic Republic of Iran, 82- cv-00220, U.S. District Court, District of Columbia (Washington).
To contact the reporter on this story: Chris Dolmetsch in New York at firstname.lastname@example.org.
To contact the editor responsible for this story: Michael Hytha at email@example.com.