The Court of Appeal, overruling a lower court, reinstated Iran's suit to reclaim the artifacts.
Iran says the 18 jars, bowls and cups, which date from 3,000 B.C., come from sites in the Halil Rud valley, south of Jiroft town in the Kerman province of southeast Iran. Since 2001, excavations have uncovered graves containing beautifully carved chlorite objects, like those in dispute, but many tombs were emptied illegally between 2000 and 2004, Iran said.
Fayez Barakat, owner of the Barakat Gallery, said he had bought the jars, bowls and cups in continental Europe for about $500,000.
"I'm very disappointed because it does not make any sense. I purchased them myself on the open market, in auction houses," said Barakat, who also has galleries in Beverly Hills, Calif., and Abu Dhabi.
In March, the Iranian government asked London's High Court to order the return of the items held by the Barakat Gallery in the upscale Mayfair section of London.
Iran's lawyer, Hodge Malek, said the gallery had no title to them since there was no way that their unknown finder could obtain good or lawful title.
"This case is so important for Iran because they believe objects of this quality, being the best ones in the tombs, should be back in Iran," he said, adding that a ruling against Iran would have "a huge impact on the black market trade in antiquities."
High Court Justice Gray, ruling on two preliminary issues, dismissed the case, saying Iran had not proved ownership of the artifacts and that Iranian law was unenforceable in the English courts.
However, on Friday the Court of Appeal overturned that decision and reinstated Iran's claim.
One of its three judges, Lord Chief Justice Nicholas Phillips, said that under the provisions of Iranian law, and in particular the Legal Bill of 1979 — which prevents unauthorized excavations and diggings of relics more than 100 years old — Iran could show that it had obtained title to the objects, and that the English courts should recognize and enforce that title.
Barakat said he is considering appealing the ruling to the House of Lords, Britain's highest court of appeal.
He said he had been told that some of the 18 jars, bowls and cups that he had purchased were found in Afghanistan and Syria, and that Iran had not proved its claim of ownership.
Barakat said that when Iran's embassy saw that he was marketing the items for sale in London, it approached him to make its claim.
"I said I had purchased them legally, but that if Iran believes they are important archaeological items from the country, I would sell them to them at cost," Barakat said.
But the Iranians filed their court case instead.