Terrorism Pierces Sovereign Immunity for State Assets
On August 9, 2019, the United States Court of Appeals for the Second Circuit affirmed the judgment of the United States District Court for the Southern District of New York in the case of Kirschenbaum v. Assa Corp., which classifies the Defendants as a "foreign state" and "terrorist party" under two statutes, the FSIA and the TRIA. The Plaintiffs-Appellees are victims of direct and indirect terrorism and obtained default judgments in federal court against the Islamic Republic of Iran over the course of a few decades. In an effort to execute their judgments, the victims targeted Iranian assets located in the United States by claiming they are subject to attachment and execution under these statutes.
Since the Defendant is owned and controlled by Iran through Bank Melli and acts as the alter ego of the Government of Iran, as the court determined, it qualifies as a "foreign state" under the FSIA definition of the term. The court concluded that it lacks immunity, subjecting it to the District Court's jurisdiction and its assets to attachment and execution. Additionally, as the alter ego of the Government of Iran--a state sponsor of terrorism and therefore a "terrorist party" for TRIA purposes--Assa qualifies as a "terrorist party" under the TRIA, the court agreed. Finally, the court also found Assa to be an "agency or instrumentality" of Iran since it is owned, controlled or directed by a terrorist party, meaning its property constitutes blocked assets and is subject to attachment and execution. -- Marco Stewart Lopez, legal assistant, Berliner Corcoran & Rowe LLP, Washington, DC.
Wed, / Embassy Law Link