Iran v. Elahi

The US Supreme Court decided Iran v. Elahi, holding that the respondent, who sued the Iranian government for the assassination of his brother, could not attach an arbitration award made to Iran to satisfy his judgment because he had waived his right to do so by accepting $2.3 million from the federal government under the Victims of Trafficking and Violence Protection Act of 2000 (VPA). Has more on the Terrorism Risk Insurance Act of 2002 (TRIA). The text and intent of the VTVPA and TRIA demonstrate, they reasoned, that Congress intended to broaden the rights of victims of terrorism to “execute on the assets of a state found to have sponsored or assisted in a terrorist act” and to “ensure that other laws do not bar victims’ efforts to enforce judgments against terrorist states.”

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  1. Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran v. Elah (U.S. Sup. Ct. Apr. 21, 2009)

    The United States Supreme Court held that a judgment in favor of Iran could not be attached by Respondent Elahi, a U.S. national who successfully obtained an award against Iran for the death of his brother, because Respondent had waived his right to attach any Iranian assets when he agreed to receive partial compensation from the U.S. government.

    Elahi, whose brother was allegedly murdered by Iran, sued Iran and successfully obtained a default judgment of about $312 million. Elahi then tried to collect parts of the judgment by attaching Iran’s assets, which were in the form of a judgment obtained by Iran against a California company (Cubic Judgment). Iran invoked the sovereign immunity defense of the Foreign Sovereign Immunities Act, arguing that this prevented any such attachment. The defense was denied by the California District Court, and the Ninth Circuit affirmed, holding that there was an exception to the foreign sovereign immunity defense. The case then reached the U.S. Supreme Court, which remanded, holding that the lower court’s reliance on the “commercial activity” exception was improper, because this exception “applies only to property of an ‘agency or instrumentality’ of a foreign state’”, not ‘property of an entity that itself is an inseparable part of the foreign state [Ministry of Defense].’” On remand, the Ninth Circuit found that a different type of exception applies, namely an exception enumerated in the Terrorism Risk Insurance Act of 2002 (TRIA). The TRIA exception “permit[s] holders of terrorism-related judgments against Iran to attach ‘blocked’ Iranian assets.”

    After a lengthy discussion of the U.S.-Iran conflict and the subsequent unblocking of blocked assets, the Supreme Court held that “the asset still was not ‘blocked’ at the time of the decision below.” But even if the asset later was blocked, the Court added, “Elahi cannot attach the Cubic Judgment because he has waived his right to do so.” The Court cited Section 2002 of the Victims of Trafficking and Violence Protection Act of 2000 (VPA) which “offers compensation to individuals holding terrorism-related judgments against Iran,” and “requires those receiving payment to relinquish ‘all rights to . . . attach property that is at issue in claims against the United States before an international tribunal.’” Since the U.S. government paid Elahi $2.3 million under the VPA as partial compensation for his judgment against Iran, and he signed a waiver form that mirrors the statutory language, Elahi could not seek to attach the property in question.

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