February 07 2020
In a rare if only partial victory for the Islamic Republic, the US Supreme Court has found partly in favor of Iran in a suit filed by Bank Markazi, the Central Bank of Iran.
But the victory may only be temporary.
Bank Markazi had filed a suit with the Supreme Court seeking to get it to reject a decision by the federal appeals court in New York that had allowed hundreds of the survivors of the 1983 bombing of the US Marine Barracks in Beirut to seize $1.68 billion in Bank Markazi assets.
The Supreme Court did indeed cancel the appeals court decision, as requested by Bank Markazi. But it then sent the case back to the appeals court for reconsideration in light of new legislation that was passed by Congress after the appeals court had ruled in favor of the survivors of the 241 Marines killed.
The appeals court may very well rule that the new legislation doesn’t change its ruling to allow the money to go to the survivors.
The case does not impact an earlier ruling that the survivors are able to collect $3.8 billion from Iran. At issue is whether the survivors can get their hands on Bank Markazi’s $1.68 billion to go toward the total judgment.
That money is held by a Luxembourg financial institution, Clearstream Banking, and the survivors want it transferred to New York for disbursement to the survivors.
The survivors argue that the transfer of the funds was authorized under an earlier Supreme Court decision.
Bank Markazi sought to have the appeals court decision scrapped, saying it would put the United States in violation of international law and threatened “disastrous consequences” for American foreign relations—something the Islamic Republic would certainly like to see happen.
The Trump Administration agreed with Iran, in this case, and wanted the appeals court decision scrapped because of the new legislation passed by Congress and signed by Trump December 20.
The Supreme Court ordered the appeals court decision scrapped, as Bank Markazi and the Trump Administration argued—but it then told the appeals court to re-consider the case in light of the new legislation.
A federal trial court years ago ruled that the Bank Markazi assets were located in Luxembourg and thus immune from seizure. But the US 2nd Circuit Court of Appeals overturned that decision. That was when Bank Markazi appealed to the US Supreme Court. The Trump Administration then entered the case, saying it was unlikely that the old law would allow the seizure of foreign assets held abroad, but arguing the new law should change that.
Bank Markazi had argued that Congress should not be allowed to pass new laws that impact cases in the courts. By sending the case back to the court of appeals to review in light of the new law, the Supreme Court effectively rejected Bank Markazi’s argument on that point.
Meanwhile, in Italy a court has rejected a suit by American victims of the 2001 attack on the World Trade Center in New York City to seize $6 billion in Central Bank of Iran assets located in that country.
