The ICJ issues its judgment in the Case Certain Iranian Assets

The USA have violated the Treaty of Amity according to the International Court of Justice 

The International Court of Justice issued this March 30th, 2023 its judgment on the case Certain Iranian Assets opposing the Islamic State of Iran to the United States of America After a long session of more than an hour, the Vice-President of the ICJ read the operative part of the judgment, largely, but not totally, in favor of the Islamic State of Iran.

UN Photo/ICJ-CIJ/Wiebe Kiestra. All rights reserved.

A Brief Summary

The government of Tehran filed an application instituting proceedings with the United Nations judicial body on June 14th, 2016 for alleged violations of the Treaty of Amity, Economic Relations and Consular Rights (the Treaty of Amity) which was signed by the two countries in Tehran in 1955 and entered into force in 1957. Most specifically, Iran accused the United States of admitting actions brought by individuals before US national courts against Iran, which would constitute not only a violation of the general principle of immunities from jurisdiction but a breach of the bilateral agreement between the two countries.

The United States, for its part, stated that these actions should be placed in a broader framework that originated in 1979, the date of the overthrow of the Shah of Iran. Since then, the United States has claimed that Iran has repeatedly violated international law: according to Washington, Iran is responsible for the deaths of 241 American soldiers stationed in Lebanon in 1983. The following year in 1984, the United States placed Iran on the list of state sponsors of terrorism.

Ayatollah Ruholla Khomeini, Supreme leader of the new Islamic Republic of Iran until his death.

Important Legal Ramifications 

The qualification of a state sponsor of terrorism has important legal implications in US domestic law. Indeed, the combination of certain legal texts namely the Foreign Services Immunities Act in its amended version of 2008, the Terrorism Risk Insurance Act of 2002 and Presidential Decree number 13599 of 2012, make it possible to suspend immunity from jurisdiction but also from execution before national courts. In practice, an individual may sue the State of Iran before a U.S. national court, and if the action is successful, be paid on the assets blocked or not, not only of the Iranian State but also of any company in which the latter would have an interest and / or exercise control that are located on the territory of the United States or in the possession or control of a U.S. person or entity.

This is also what happened in the Peterson case where the family of one of the soldiers killed in Beirut won a case against the State of Iran and to disinterest them, the American State seized the assets of Iranian companies, which have a legal personality distinct from that of the Islamic State. At the time of its lawsuit before the ICJ, Iran had to pay US$56 billion due to these various proceedings.

The ICJ ruling

In its decision of March 30th 2023, the Court first established its jurisdiction: for example, it stated that it had no jurisdiction to judge decisions taken in relation to the assets of the Iranian central bank that had been seized because the bank could not claim the status of company within the meaning of the Treaty of Amity. However, the ICJ considered that the US judicial arsenal was too broad in its application to be reasonable, and this had unduly infringed the rights of Iranian companies that had no viable recourse before US judges. The Court also considered that the seizure of the property constituted an expropriation without compensation to the detriment of Iran; all this was in violation of the Treaty of Amity, which the United States denounced in 2018.

It should be noted, however, that Iran was not successful on all its claims, for example by the Court finding that the United States had not violated its obligation relating to freedom of financial transfer or the protection and security of property on American soil.

What now?

The Court affirmed that Iran should receive compensation for the damage suffered, but sent the parties back to the negociation table to allow them to reach an agreement on the amount. If necessary, the ICJ will rule on reparations.

More interesting will be the legal fallout from this case. Indeed, several actions are pending before the courts and the incriminated legislation is still in force. We are waiting on the official reaction of both parties.

Published on March 30th, 2023