In a blow for Iran, the International Court of Justice (ICE) on Thursday denied Tehran's request to release around $2 billion in Iranian central bank assets that were frozen by the U.S.
These funds were intended to be used as compensation for victims of various attacks connected to Iran, including a 1983 bombing in Lebanon.
However, in a partial victory for Tehran, judges at the ICE ruled Washington had illegally allowed courts to freeze the assets of some Iranian companies and ordered the U.S. to pay compensation, the amount of which will be determined later.
In a 10-5 majority ruling, the International Court of Justice said it did not have jurisdiction to rule on the Iranian claim linked to the central Markazi Bank.
The world court's vice-president, Kirill Gevorgian, said the majority "upholds the objection to jurisdiction raised by the United States of America relating to the claims of the Islamic Republic of Iran" related to the bank.
In a complex, 67-page judgment, the world court also found that some other U.S. moves to seize assets of Iran and Iranians in the United States breached a 1955 treaty between the countries and said they should negotiate compensation. If they fail to reach a number, they will have to return to the Hague-based court for a ruling.
But the largest part of the case focused on Bank Markazi, and its frozen assets of $1.75 billion in bonds, plus accumulated interest, that are held in a Citibank account in New York. The court said that it did not have jurisdiction based on the 1955 Treaty of Amity because the protections it offers do not extend to central banks.
Teams of lawyers present for both countries at Thursday's hearing did not comment on the ruling.
At hearings last year, Iran cast the asset freeze as an attempt to destabilize the Tehran government and a violation of international law.
Iran took its claim to the world court in 2016 after the U.S. Supreme Court ruled that money belonging to Iran’s central bank could be used as compensation for the 241 American troops who died in the 1983 bombing, which was believed to be linked to Tehran.
After the bombing of a U.S. military base in Lebanon, a second blast nearby killed 58 French soldiers. Iran has denied involvement, but a U.S. District Court judge found Tehran responsible in 2003. The judge's ruling said Iran’s ambassador to Syria at the time called "a member of the Iranian Revolutionary Guard and instructed him to instigate the Marine barracks bombing."
At last year's hearings, U.S. legal team leader Richard Visek told judges they should invoke, for the first time, a legal principle known as "unclean hands," under which a nation can’t bring a case because of its own criminal actions linked to the case.
However, the court's ruling Thursday rejected that defense.
Iran argued the asset freeze was a breach of the 1955 Treaty of Amity, which promised friendship and cooperation between the two countries. The U.S. and Iran have had no diplomatic relations since militant students took over the U.S. Embassy in Tehran in 1979.
The judges accepted U.S. lawyers' contentions that the frozen central bank assets were state holdings not covered by the treaty, which Washington terminated in 2018 in response to an order by the International Court of Justice in a separate case to lift some sanctions against Iran.
The court’s judgments are final and legally binding.