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ICJ is hearing case on Iranian assets frozen by US. Why it could have implications for Russia

Hearings come at a time when US is trying to revive Iran nuclear deal. ICJ's ruling could also have implications for Russia which is facing sanctions in wake of invasion of Ukraine.

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New Delhi: The top court of the United Nations, the International Court of Justice (ICJ), will begin public hearings in a high-profile case concerning the seizure of Iranian assets in the US Monday.

The case — known officially as Certain Iranian Assets (Islamic Republic of Iran v. United States of America) — was filed in the ICJ by Tehran in 2016. It seeks the unfreezing and return of nearly $2 billion in Iranian assets held in the US. 

Washington, meanwhile, has argued that the funds in question were seized to compensate victims of alleged Iran-supported terrorism, including the 1983 suicide bombing of a Marine Corps base in Beirut, Lebanon, that killed 241 American military personnel.

Iran and the United States have had no formal diplomatic relations since 7 April 1980.

To sum it up, the ICJ case revolves around the question of whether the external assets of a sovereign central bank enjoy some form of immunity from being seized and diverted by another country. The hearings are bound to have far-reaching implications, especially amid the Russian invasion of Ukraine. 

“…it is at least possible that the court [ICJ] will find that the United States violated Iran’s rights under international law. If [US] Congress takes the same approach to Russia’s assets as it did to Iran’s, it likely will manifestly violate international law,” writes Paul Stephan, a professor of law at the University of Virginia.

The hearings also come at a sensitive time, with the Biden administration and US allies trying to revive the Iran nuclear deal, which the preceding Trump administration had abandoned in 2018.

Moreover, Tehran’s support to Moscow amid the Ukraine war hasn’t gone down well with Washington. A report last month by the US-based think tank Atlantic Council remarked that the Ukraine war had made Russia and Iran “allies in economic isolation”.

Western powers have sanctioned Russia over its invasion of Ukraine, while Iran has been sanctioned by the US on multiple occasions since 1979 — more intensely under then President Donald Trump’s “maximum pressure” campaign that followed America’s exit from the Joint Comprehensive Plan of Action (JCPOA) in 2018.

Also Read: ‘Follow Russia model, resume oil purchases’ — Iran asks India to ignore US sanctions

Why Iran filed the case

Iran lodged the case against the US in the ICJ on 14 June 2016 in response to the US Supreme Court’s April 2016 ruling in a case known as Bank Markazi v. Peterson that had been under litigation since the early 2000s.

The suit involved over 1,300 individuals who had secured favourable verdicts in several separate cases against Iran for its alleged role in the 1983 Beirut barracks bombings and other attacks. Petitioners had sought compensation via funds in a Citibank account in New York connected with Iran’s central bank, known as Bank Markazi.

In 2012, while the case was still pending, the Obama administration froze all assets of the Iranian government in the US, including the Citibank account. 

Further, the US Congress added a section to the Iran Threat Reduction and Syria Human Rights Act of 2012 that allowed frozen foreign assets to be used to satisfy judgments. The legislation even mentioned the Bank Markazi v. Peterson case by name, and its case docket number.

The Iranian central bank opposed the move, arguing that it was ‘unconstitutional’ and a violation of the US’s doctrine of the separation of powers, implying that the legislature was attempting to dictate the judicial process.

In April 2016, the US Supreme Court in a 6-2 ruling said such a law was not unconstitutional and did not amount to a violation of the separation of powers.

However, Chief Justice John G. Roberts, Jr. criticised Congress’ attempt to “pick” winners of court cases by passing laws directed at cases that were still under litigation.

Treaty of Amity

Since 2016, Tehran has argued that Washington violated the 1955 Treaty of Amity — an agreement of friendship signed by the two countries — by seizing Iranian assets in the US and diverting them to other parties.

In 2018, when the US withdrew from the Iran nuclear deal, the ICJ ordered Washington to ensure that sanctions imposed against Tehran did not affect humanitarian aid such as food and medicine.

The Trump administration subsequently pulled the US out of the Treaty of Amity in 2018 in what was viewed as a largely symbolic move.

It was only in February 2019 that the ICJ, after years of hearings, ruled that Iran could proceed with a bid to recover frozen assets in the US worth roughly USD 2 billion. The hearings starting now will revolve around this bid.

(Edited by Amrtansh Arora)

Also Read: Four implications of a Russian defeat in Ukraine—one affects India the most


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