Iran's biggest private bank is reportedly seeking 500 million pounds ($780 million) from Britain's Treasury.
The claim comes after Britain's Supreme Court ruled in June that sanctions should not have been imposed on Bank Mellat over its alleged links to Iran's nuclear weapons program.
London banned Mellat's operations in Britain and froze its assets in 2009.
The measure was expanded to the rest of the European Union the following year.
A lawyer for Mellat, Sarosh Zaiwalla, told RFE/RL that the bank was making an estimated annual profit of 250 million pounds ($340 million) in Europe, "so the 500 million [pounds] is a conservative [estimate of the bank's] losses."
A spokesman for the British Treasury was quoted as saying it had not received any claim and would "robustly" contest any demand for compensation.
With reporting by "The Wall Street Journal"