World Court rules US was wrong to freeze Iran assets

In a partial victory for Iran, judges at the International Court of Justice (ICJ), on Thursday, ruled Washington had illegally allowed courts to freeze assets of Iranian companies and ordered the United States to pay compensation, the amount of which will be determined later, Reuters reports.

However, in a blow for Tehran, the World Court said it did not have jurisdiction over $1.75 billion in frozen assets from Iran’s Central Bank, by far the largest amount claimed back by Iran.

The ruling comes amid heightened tensions between the United States and Iran after tit-for-tat strikes between Iran-backed forces and US personnel in Syria last week.

READ: Iran asked US to unfreeze $10bn to show goodwill

Relations are also strained after attempts to revive a 2015 nuclear deal between Iran and major world powers stalled, and as Iranian drones are being used by Russia against Ukraine.

The case before the ICJ, also known as the World Court, was initially brought by Tehran against Washington in 2016 for allegedly breaching a 1955 friendship treaty by allowing US courts to freeze assets of Iranian companies. The money was to be given in compensation to victims of terrorist attacks.

In hearings last year, the US argued the whole case should be dismissed because Iran has “unclean hands” and the asset seizures were the result of Tehran’s alleged sponsoring of terrorism. The Court dismissed this defence entirely and ruled the treaty was valid.

The Islamic Republic denies supporting international terrorism.

The 1950s friendship treaty was signed long before Iran’s 1979 Islamic Revolution, which toppled the US-backed shah, and the subsequent severing of US-Iranian relations.

Washington finally withdrew from the treaty in 2018. Nonetheless, the ICJ ruled that as it was in place at the time of the freezing of the assets of Iranian commercial companies and entities, Washington violated the treaty.

The judges explained the Court had no jurisdiction over the $1.75 billion in assets from Iran’s Central Bank held by the US because that bank was not a commercial enterprise, and thus not protected by the treaty.

The rulings of the ICJ, the United Nations’ top Court, are binding, but it has no means of enforcing them.

The United States and Iran are among a handful of countries to have disregarded its decisions in the past.

READ: US denies deal to unfreeze $7bn in Iranian funds for prisoner release