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Standard Chartered has failed in its attempt to narrow the scope of a £1.5bn lawsuit over claims that its breaches of sanctions against Iran were more widespread than it has acknowledged.

The High Court in London on Tuesday ruled against the Asia-focused bank, which was trying to slash the value of the lawsuit by blocking hundreds of funds from taking part.

A central issue was whether investors who had not read statements issued by the bank that were alleged to be misleading would be allowed to sue. These include passive funds, which automatically hold all stocks in a given index. The court decided in favour of the investors.

The decision comes after a judgment in another similar shareholder lawsuit against Barclays. In that case, the court ruled that any claimant would be required to prove that they had read — or was at least aware of the gist — of statements that they were complaining about.

Almost 1,400 funds are claiming a total of about £1.5bn from Standard Chartered in a case previously described by the judge as “litigation on a grand and complex scale”.

Investors accuse the FTSE 100 bank of issuing misleading statements and omitting crucial information, particularly about its compliance with US sanctions on Iran.

They argue they relied on flawed information when they took the decision to invest in Standard Chartered, and suffered losses as a result. The bank denies the claims against it, saying they were “without merit”.

The case is one of several brought by investors in London-listed companies seeking compensation for declines in share prices, a long-standing trend in the US that has gained momentum in the UK.

At a hearing last month, Standard Chartered called for the removal from the case of about 950 funds, which had claimed a total of about £760mn.

Lawyers acting for the claimants, represented by Graham Chapman KC, argued that even if the investors had not read the statements directly, they still relied on the information. This was because the market as a whole had incorporated it into the bank’s share price.

Lawyers for Standard Chartered, represented by Adrian Beltrami KC, argued that the earlier Barclays case had set a precedent and the claims against the two banks were “indistinguishable” on the relevant legal point.

However, Mr Justice Michael Green ruled on Tuesday that there were “points of difference” between the two cases and the matter was a “developing area of law”, allowing him to diverge from the Barclays judgment.

His decision not to strike out the claims against Standard Chartered means that the full group of investors can proceed to trial, which has been scheduled for October 2026.

Standard Chartered agreed to pay $1.1bn in 2019 to settle charges that it violated Iran sanctions and ignored red flags about its customers. The settlement included a guilty plea by a former bank employee. That came seven years after the bank first paid a $667mn fine and signed a deferred prosecution agreement with US prosecutors to avoid criminal charges for breaching Iran sanctions.

However, the investors claim the misconduct was broader than Standard Chartered has acknowledged. In documents filed with the High Court they accused the bank of engaging in a “systemic course of conduct” in “developing its Iran business in breach of sanctions”.

The bank said in a statement on Tuesday: “Whilst we acknowledge today’s decision, we regard this claim as being without merit and will continue to vigorously defend the allegations as the claim proceeds to trial.”