Vélfag is pushing back on two separate fronts in what has become a drawn-out legal dispute touching both government and the banking sector. The company has challenged the Ministry of Foreign Affairs’ decision this summer to deny its majority owner, Ivan Kaufmann, the official title of chairman of the board.
On a separate track, Vélfag is also seeking a review of Arion Bank’s decision to freeze the company’s funds back in July.
Delegating Authority: A Query into Financial Oversight
Vélfag made clear in a statement that it is unhappy with the ruling and intends to appeal. The company says it will keep pushing until its rights are fully protected through the process.
“This case raises critical questions regarding the Icelandic government’s authority and the application of existing laws,” the company noted. “It is quite unusual—and, to our knowledge, without precedent—that coercive measures against an Icelandic company have been handed over to a private institution like Arion Bank.”
Vélfag’s attorney, Sigurður G. Guðjónsson, said the verdict caught them off guard. “We believe the law does not impose a requirement on financial institutions to freeze accounts, and that individuals affected by such actions ought to address their petitions for relief directly to the respective financial entity.”
He went on to flag a broader concern: “financial companies are not bound by the procedural obligations of administrative law and have seemingly disregarded their responsibilities regarding the unfreezing process. If Vélfag were to pursue a case against the bank, it’s evident that it would not be prioritized, potentially dragging on for a minimum of two years.”
Ivan Kaufmann, Vélfag’s registered chairman, told Morgunblaðið that he expects the matter to end up before European courts — and that he is hopeful about the outcome there.
