June 17, 2016
Just as Iran is preparing to go to the International Court of Justice, arguing the United States cannot seize Iranian assets in punishment for terrorism, Ontario’s top court ruled last Thursday that Canada has a legal right to seize Iranian assets in punishment for terrorism.
The Ontario ruling now pits the Islamic Republic against two countries in an argument over the extent of “sovereign immunity” or the right of national governments not to be sued.
An Ontario judge ordered the Islamic Republic’s non-diplomatic assets in Canada, totaling about $13 million, to be handed over to victims of’Arab’terrorist groups sponsored by Tehran—Hamas and Hezbollah. The building that used to be the Iranian embassy in Ottawa and its bank accounts were exempt from seizure.
One irony is that most of the claimants, though not all, are Americans who went into Canada’s courts when they weren’t able to find Iranian government assets in the United States
The ruling by the Ontario Superior Court’ dismissed every single argument Iran’s lawyers made at the trial held in Toronto in January.
Justice Glenn Hainey wrote, “The broad issue before the court is whether Iran is entitled to immunity from the jurisdiction of Canadian courts for its support of terrorism.”
His answer was: No Way.
The Islamic Republic argues that the international tradition of “sovereign immunity” means it cannot be sued. The United States was the very first country to codify that tradition in national law back in 1791 at the first Congress created under the US Constitution. Over a quarter-millennium, however, the United States has enacted several exemptions. In 1996, it added language saying a country declared to be a “state supporter of terrorism” could be sued by American victims of terrorism supported by such states. Iran claims that violates international law. The only countries currently on the US list of state sponsors of terrorism are Iran, Syria and Sudan.
The case in Ontario was the first challenge to Canada’s Justice for Victims of Terror Act (JVTA), enacted in 2012. It is very close to the US law. Canada has designated Iran and Syria, but not Sudan, as “state sponsors of terrorism.”
Iranian-Canadian relations have been poor ever since Zahra Kazemi, a dual Iranian-Canadian, was beaten to death at Evin Prison in 2003. Canada soon took on the role of sponsoring the annual UN resolution condemning the Islamic Republic for human rights violations, a policy that has infuriated Tehran and prompted it to unleash verbal assaults on Canada that are often worse than those aimed at the United States.
The Ontario ruling was also handed down only four days after the Islamic Republic jailed a Montreal professor, Homa Hoodfar, and thus cannot improve Canadian attitudes toward Iran. (The case was tried in January so the decision was not related to her arrest.)
The new Liberal Party government took office in Canada last November 4 with a campaign pledge to re-establish relations with Tehran that were severed in 2012 by the previous Conservative Party government. More than seven months have now passed without action, as negotiations between the two countries on the terms of resuming relations have gone nowhere. Some speculate that Iran is demanding that Ottawa cease sponsoring the UN human rights resolution, but Ottawa has been silent as to the problems.
Victims of eight terrorist attacks launched by Hamas or Hezbollah had their cases joined
together in the suit that was brought before Ontario’s highest court, the Superior Court of Ontario.
As is its norm, Iran ignored the cases when they were filed. It was only after the Canadian federal government pinpointed and froze $13 million in bank deposits and real estate owned by Iran that Iran hired a Toronto law firm, which argued Tehran had not been properly served with the court papers, that the cases were filed too late, that the legal papers were served in English rather than Farsi and that the dollar amounts sought by the victims were “offensive.”
In his ruling, Justice Hainey found Iran’s arguments were without merit and declined to set aside the judgments.
He gave no weight to Iran’s argument it had assumed the Canadian government would protect the Iranian regime’s assets, and said Iran had failed to explain why it had not mounted a legal defense until the judgment orders had been issued.
“The failure to provide any reasonable explanation for Iran’s failure to defend these motions suggests to me that the defendants were attempting to gain a procedural advantage and were ‘gaming the system’,” he wrote. However, the Iranian government has never gone into court in the United States when it was sued. It has only responded when some actual Iranian assets that might be seized were pinpointed.
Colin Stevenson, one of the Toronto lawyers representing Iran in the case during the trial in January, argued that some of the suits were based on torture suffered by victims who had been held captive by Hezbollah. Stevenson said torture was not considered terrorism under Canadian law. “Torture is not terrorist activity,” he said.
Stevenson further argued that before they could collect damages, the victims would have to prove that a payment that Iran made to a specific terrorist operative was used in the attack that harmed them. “That’s impossible,” countered Justice Hainey.
The lawyers also argued that victims had to do more than show that the terrorist groups that harmed them were sponsored by Iran. “I say that’s not enough,” Stevenson said. “They have to show a connection between the funding and the terrorist acts.”
They also argued that the cases had not been filed in time, that a York University professor who testified was biased against the Iranian regime, and that the Canadian government had not given Iran sufficient notice that it was suspending diplomatic ties.
In addition, the lawyers argued the bank accounts that terror victims are seeking were used to pay the tuition and expenses of Iranian students in Canada. As such, they should be considered diplomatic assets and out of reach of the civil courts, they said.
In Tehran, Foreign Ministry spokesman Hossain Jaberi-Ansari said, “The move by the Canadian government contradicts claims about the normalization of relations between the two countries and compensation for the extremist policies of the former government.”
He treated the court decision as if it were a government decision.
Canada has never even hinted at paying Iran any kind of compensation for anything. The new Trudeau government has said it wants to resume diplomatic relations, which the previous Conservative Party government severed in 2012.
On Friday, the day after the court decision, Foreign Affairs Minister Stephane Dion said talks were underway with Iran, that Canada had no plans to remove Iran from its list of state sponsors of terrorism and that he did not expect that Canada’s embassy would be re-opened in the near future, that some more limited type of diplomatic relations was anticipated.