Iran Loses Bid To Unfreeze US-Held Central Bank Assets At ICJ: Report

However, ICJ ruled that the US had illegally allowed courts to freeze the assets of Iranian companies. The court in Hague has ordered US to pay compensation

The International Court of Justice (ICJ) on Thursday rejected Iran's bid to unblock $1.75 billion worth of assets held by the United States over alleged terror attacks, reported news agency Reuters. The court told Iran that it has no jurisdiction over frozen assets from Iran's central bank. 

However, ICJ ruled that the US had illegally allowed US courts to freeze the assets of Iranian companies. The court in Hague has ordered the US to pay compensation. 

The case was filed in the ICJ by Iran in 2016. Iran alleged that the US breached a 1955 friendship treaty by allowing a US court to freeze the assets of Iranian companies.

The US claims that the money is compensation to victims of terrorist attacks. It argues that the funds 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. However, the report says that the ICJ dismissed this defense and ruled the treaty was valid.

The case centres on the issue of whether a sovereign central bank's foreign assets are shielded in any way from being taken and diverted by another nation.

With the Russian invasion of Ukraine, the order is expected to have a significant impact. The ruling comes amid heightened tensions between the United States and Iran. The use of Iranian drones by Russia against Ukraine and the failure to restore the 2015 nuclear agreement between Iran and major world powers have both soured relations.

The Friendship treaty between US and Iran was inked in 1950, at the time the country was ruled by the US-backed Shah regime. However, the 1979 Islamic Revolution in Iran deposed the Shah government and soured US-Iran relations. Iran and the United States have had no formal diplomatic relations since 1980.

According to the Reuters report, in 2018, Washington withdrew from the agreement. But, the ICJ in its order held that the US had broken the treaty because it was in effect when Iranian commercial companies and entities had their assets frozen. The justices noted that because Iran's central bank was neither a commercial entity nor was not covered by the treaty, the court had no jurisdiction over the $1.75 billion in assets owned by the US, the report added.