Ministry of Defense and Support for Armed Forces of Islamic Republic of Iran v. Elahi
Headline: Court prevents a terrorism victim from seizing Iran’s $2.8 million arbitration judgment, holding the judgment was not blocked when appealed and that the victim waived his right to attach it, reducing collection options.
Holding: The Court held that the $2.8 million arbitration judgment was not a blocked Iranian asset when the appeals court decided the case and that the victim waived his right to attach that judgment.
- Prevents this victim from seizing Iran’s $2.8 million arbitration judgment.
- Limits ways for terrorism victims to collect from foreign states.
- Leaves open whether later Executive actions now block that asset.
Summary
Background
Dariush Elahi, a man who won a default judgment against Iran for his brother’s murder, tried to satisfy part of that award by attaching a separate $2.8 million arbitration judgment that Iran won against a California company, Cubic Defense Systems, over a 1977 contract for an air combat training system. Cubic sold the system to Canada in 1982; arbitrators awarded Iran $2.8 million in 1997; a federal judge confirmed that award in December 1998, creating the Cubic Judgment. Elahi filed a lien on the Cubic Judgment while litigation over Iranian immunity proceeded.
Reasoning
The Court first determined the Cubic Judgment was not a “blocked” Iranian asset when the Ninth Circuit decided the case. Treasury rules unblocked interests that arose after January 19, 1981; Iran’s interest in the judgment arose in 1998 and its interest in sale proceeds arose in October 1982, so the asset fell within the unblocking orders. The Court then held Elahi had waived his right to attach the judgment because, after receiving $2.3 million from the Government under a victims’ statute, he signed a waiver covering property “at issue” before the Iran–U.S. Claims Tribunal.
Real world impact
The ruling stops Elahi from seizing the Cubic Judgment, reducing one route for victims to collect from Iran. The Court left open whether later Executive actions may now block that asset, but it did not decide that question because Elahi’s waiver resolved the case.
Dissents or concurrances
Justice Kennedy (joined by two Justices) agreed the judgment was not blocked but dissented on waiver, arguing the Cubic Judgment was not truly “at issue” before the Tribunal and that statutes aim to compensate victims.
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