Top UN court to rule in Iran-U.S. dispute over frozen assets

In this Wednesday Oct. 3, 2018, image the delegations of the U.S., front left, and the Islamic Republic of Iran, front right, rise as judges, rear, enter the International Court of Justice, or World Court, in The Hague, Netherland. (AP Photo/Peter Dejong)

THE HAGUE, Netherlands -

The United Nations' highest court is set to rule Thursday in a case filed by Iran against the United States over frozen Iranian assets worth some $2 billion that the U.S. Supreme Court awarded to victims of a 1983 bombing in Lebanon and other attacks linked to Tehran.

At hearings last year, lawyers representing the U.S. urged the International Court of Justice to reject the claim. Iran cast the asset freeze as an attempt to destabilize the Tehran government and a violation of international law.

Iran took its claim to the world court in 2016 after the U.S. Supreme Court ruled that money belonging to Iran's central bank could be used as compensation for the 241 American troops who died in the 1983 bombing, which was believed to be linked to Tehran.

At stake are $1.75 billion in bonds, plus accumulated interest, belonging to the Iranian state but held in a Citibank account in New York.

After the bombing of the a U.S. military base in Lebanon, a second blast nearby killed 58 French soldiers. Iran has denied involvement, but a U.S. District Court judge found Tehran responsible in 2003. The judge's ruling said Iran's ambassador to Syria at the time called "a member of the Iranian Revolutionary Guard and instructed him to instigate the Marine barracks bombing."

At last year's hearings, U.S. legal team leader Richard Visek told judges they should invoke, for the first time, a legal principle known as "unclean hands," under which a nation can't bring a case because of its own criminal actions linked to the case.

"The essence of this threshold defence is that Iran's own egregious conduct, its sponsorship of terrorist acts directed against the United States and U.S. nationals, lies at the very core of its claims," Visek told the court.

In the case it took to the Hague-based International Court of Justice, Iran argued the asset freeze was a breach of the 1955 Treaty of Amity, which promised friendship and cooperation between the two countries. The U.S. and Iran have had no diplomatic relations since militant students took over the U.S. Embassy in Tehran in 1979.

Visek argued the frozen assets were state holdings not covered by the treaty, which Washington terminated in 2018 in response to an order by the International Court of Justice in a separate case to lift some sanctions against Iran.

The court's judgments are final and legally binding.