Thursday, March 30, 2023
ICJ Issues its Decision in the Case of Certain Iranian Assets
The International Court of Justice (the ICJ or the World Court) issued a ruling today in a case brought by the Islamic Republic of Iran against the United States of America. The ICJ ruled that the United States had illegally frozen assets of some Iranian companies and that the United States had to compensate Iran for its breach of the 1955 U.S.-Iran Treaty of Amity, Economic Relations, and Consular Rights.
The amount of compensation is to be negotiated by Iran and the United States within the next 24 months. If the parties do not reach agreement within that time, the ICJ will determine the compensation owed.
In a partial victory for the United States, however, the ICJ also ruled that it had no jurisdiction over $1.75 billion frozen from Bank Markazi, Iran's Central Bank. The ICJ found that the Iranian Central Bank was not protected by the 1955 treaty (because it was not a commercial enterprise protected by the treaty).
The United States and Iran entered into the 1955 Treaty of Amity, Economic Relationas, and Consular Rights at a time under the Shah. Relations between Iran and the United States deteriorated after the 1979 Islamic Revolution and the Hostage Crisis.
In 2016, the Islamic Republic of Iran brought suit against the United States for breaching the Treaty of Amity, Economic Relations, and Consular Rights by allowing U.S. courts to freeze assets of Iranian companies. Money seized was intended to compensate victims of terrorism (allegedly sponsored by Iran). The United States withdrew from the treaty in 2018 (but it was in place when the United States froze the assets of Iranian companies.
Click here to see the ICJ press release about today's ruling.
Click here for a 19-page summary of the decision.