Britain`s highest court for the first time convened behind closed doors -- in a case involving an Iranian bank -- just one week after the Supreme Court decided it had the power to sit in secret.

The panel of nine justices decided Thursday that a secret hearing was "absolutely necessary" in the ongoing case. The most senior judge, David Neuberger, noted that the decision was made with "great reluctance" by a majority. Justices had been told that some material in the case related to national security and couldn`t be safely aired in public.

Bank Mellat, an Iranian bank, is trying to overturn a 2009 order by the U.K. Treasury barring it from operating in the country. That order, made under counterterrorism laws, shut the bank out of the British financial sector because it allegedly helped finance Tehran`s disputed nuclear program.

The bank denies the allegation and argues the order was unlawful. It appealed to the Supreme Court after failing to persuade the High Court and the Court of Appeal to overturn the order.

Lawyer Sarosh Zaiwalla, who represents Bank Mellat, said it is "of international concern" that the court is using a closed evidence procedure. Human rights campaign group Liberty called the move a "sad landmark" in British history.

"The creep of secrecy has now reached our highest court, a body with a noble tradition for upholding justice and the rule of law," Liberty`s legal officer, Corinna Ferguson, said. Copyright 2013 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.