Huawei has lost a UK legal battle against HSBC as it fights to stop the extradition of its chief financial officer, Meng Wanzhou, from Canada to the US, where she would face charges of fraud.
The Chinese equipment giant had sought access to bank documents that it believed would undermine the case against Meng.
At the behest of US authorities, Meng was arrested in December 2018 on charges that include lying to HSBC about Huawei's connection to Skycom, a network equipment vendor that sold products to Iran in possible violation of US trade rules.
Drawing on Reuters reports, US prosecutors have alleged that Skycom is a front company for Huawei, an allegation the Chinese firm has always denied.
Meng allegedly covered up the nature of Huawei's relationship with Skycom during a meeting with HSBC in 2013. This could have led HSBC to breach sanctions against Iran unintentionally.
Rejecting the charge that she misled the bank, Meng's Canadian defense lawyers sought access to HSBC documents they said would have proved she is innocent of fraud.
They had applied to the UK high court under the Bankers Book Evidence Act to release this information.
But Justice Fordham today rejected the application. In a ruling seen by Light Reading, he stated: "I have no real confidence that I am properly equipped to judge whether and if so what HSBC documents would be needed to secure a fair hearing for the applicant in Canada."
The decision marks the latest setback for Huawei in a case that has outlasted the US presidency of Donald Trump, whose administration fought a campaign against the Chinese company on several fronts.
Responding to the decision, a Huawei spokesperson said: "Huawei is disappointed by today's court ruling. The pursuit of justice benefits from access to relevant information and clarity of fact. Huawei remains confident in Meng Wanzhou's innocence and will continue to support her pursuit of justice and freedom."
Legal action against Huawei mirrors an earlier case against ZTE, a smaller Chinese vendor, which eventually paid about $2 billion in US fines after it was found guilty of selling US-made equipment to Iran and North Korea.
Reuters reports dating back to 2012 allege that Skycom offered to sell Hewlett Packard equipment worth about €1.3 million to an Iranian telecom operator.
Prosecutors say Huawei controlled Skycom's operations in Iran until at least 2014 and that HSBC relied on misrepresentations when it decided to continue a banking relationship with the Chinese vendor.
According to US prosecutors, HBSC cleared more than $100 million worth of transactions related to Skycom through the US between 2010 and 2014.
They say that at least $7.5 million of this amount involved payments by Skycom to Networkers International UK, a firm that provided contractors to work on Huawei projects in Iran.
The case has prompted criticism of HSBC in both China and the UK, according to an earlier BBC report. In China it has drawn fire for acceding to US requests that led to Meng's arrest, while its decision to freeze bank accounts of a Hong Kong activist met with accusations in the UK that it is too close to Chinese government authorities.
Commenting on Huawei's application for access to bank documents, HSBC previously told the BBC: "This application for disclosure in the UK is without merit. HSBC is not a party to the underlying criminal case in the US or the extradition proceeding in Canada. It would be inappropriate to comment further on an ongoing legal matter."
- Huawei tried to cover up its control of Iran's Skycom – Reuters
- Huawei's CFO doesn't get her way in Canadian court
- Huawei accused of 'racketeering' in latest US attack
- Big questions ducked in Huawei CFO extradition case
- Huawei CFO paints rosy picture of Canadian house arrest
— Iain Morris, International Editor, Light Reading