The International Court of Justice (ICJ) has rejected Iran's bid to unblock nearly $2 billion in assets belonging to its central bank that were frozen by the United States over alleged terrorist attacks.
The Hague-based court said on March 30 it did not have jurisdiction over $1.75 billion in bonds, plus accumulated interest, that are held in a Citibank account in New York.
But the court simultaneously found that the United States had "violated" the rights of some Iranians and companies whose assets were also frozen. The ruling ordered the United States to pay compensation, but said the amount should be determined through negotiation.
The ruling comes amid strained relations between the United States and Iran over the use of Iranian drones by Russia against Ukraine, attempts to revive a 2015 nuclear deal between Iran and major world powers, and a deadly strike last week involving Iran-backed militias in Syria and U.S. personnel.
The case before the ICJ, also known as the World Court, was initially brought by Tehran in 2016 claiming a breach of the 1955 Treaty of Amity, which promised friendship and cooperation between the two countries.
The treaty was signed long before Iran's 1979 Islamic Revolution, which toppled the U.S.-backed shah, and the subsequent severing of U.S.-Iranian relations. Washington withdrew from the treaty in 2018.
The ICJ ruled that the treaty was in place at the time of the freezing of the assets of Iranian commercial companies and entities, and therefore Washington violated it.
The United States argued the asset seizures were the result of Tehran's alleged sponsorship of terrorism and said the whole case should be dismissed because Iran had "unclean hands."
The court dismissed this defense and ruled the treaty was valid. It said if the countries fail in the negotiation of compensation, they will have to return to the ICJ for a ruling.
In another decision on the assets held at Citibank, the court ruled it had no jurisdiction over the $1.75 billion in assets from Iran's central bank because that bank was not a commercial enterprise, and thus not protected by the treaty.
The United States has said the money is to be used to pay compensation to victims of a 1983 bombing in Lebanon and other attacks linked to Iran, which denies supporting international terrorism.
The rulings of the ICJ, the United Nations' top court, are binding, but it has no means of enforcing its rulings.