US court orders Iran to pay $9m. to families of 1997 Jerusalem terror attack victims

NGO wins 1st potential seizure of Iranian funds in US; actual transfer of funds could still be blocked by appeal, current diplomatic process.

December 4, 2013 14:23
3 minute read.
Friends and relatives of Samdar Elhanon mourn her death

Friends and relatives of Samdar Elhanon mourn her death 370. (photo credit: REUTERS)


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For the first time in US history, victims of an Iran financed terror attack in Israel have won the potential seizure of Iranian funds, the NGO Shurat Hadin–Israel Law Center announced on Wednesday.

The approximately $9.7 million lien entered in favor of the families of the five fatal victims of a triple suicide bombing in central Jerusalem in 1997 (as well as in favor of a parallel, but separate, claim by the daughter of an assassinated former Iranian prime minister) is the first time that such victims have been so close to being granted Iranian assets in the US.

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The decision was handed down by a federal court in California on November 27.

In a complex decision, the court rejected Shurat Hadin’s request for the immediate transfer of the funds, explicitly staying any transfer until Iran files its appeal. An appeal involving the numerous complex legal issues and decades of history in the case, which has pieces dating back nearly to the 1979 Iranian revolution, could take an undefined amount of time.

The court explicitly said that any final transfer of the funds would have to take into account another potential roadblock – the current diplomatic process with Iran.

An order officially giving the victims’ families (who won a default judgment against Iran years ago) title to the funds in theory, if not in practice, is a first in Shurat Hadin’s decade-long struggle to not only win judgments on Iran-related terror financing cases, but to find actual assets to satisfy the judgments.

Back in 2001, the organization helped the American families of five of those wounded in the triple suicide bombings to begin legal proceedings against Iran for its sponsorship of Hamas, which had claimed credit.

In that attack, on September 4, 1997, three operatives from the Islamist group set off explosives attached to their bodies as they wandered the packed Ben Yehuda Street promenade in the middle of the afternoon, killing five Israelis and wounding scores of others.

Three of those killed were 14-year-old girls.

“This is a tremendous victory for the victims of Islamic terrorism,” Nitsana Darshan- Leitner, founder of Shurat Hadin, said in a statement.

“While the US and EU are rushing out to economically bolster the outlawed regime in Tehran, we and the families we represent do not forgive or forget the Iranianfunded terror that devastated Israel,” the statement continued. “We still remember the heinous murders carried out by the Iranian proxy, Hamas, in 1997. We are still fighting every single day for a measure of justice and compensation from the outlawed regimes that supported the terror organizations.”

The Iranian money that Shurat Hadin has been seeking out is a story in itself.

The funds originated as part of a judgment in favor of Iran (through proxies) against Cubic Defense Systems, a US company that had contracts with pre-revolutionary Iran to sell it an air combat maneuvering range system. Iran had paid Cubic $12 m. The company was about to deliver much of the equipment when the 1979 Iranian revolution broke out, cutting off US-Iran relations and scuttling implementation of the deal.

In the 1990s Iran and Cubic engaged in international arbitration over the deal, leading to a decision that the firm could sell the equipment to another country but would have to pay Iran $2.8 m. plus a much larger amount of interest.

In 2003, the daughter of former Iranian prime minister Shapour Bakhtiar filed a lien to take title to the funds in light of a judgment she had obtained against Iran.

The Shurat Hadin plaintiffs did the same.

Although Iran claimed sovereign immunity, Shurat Hadin was able to beat that defense, using recent changes to related laws by Congress that waive such a right in certain cases involving international terrorism.

Furthermore, whereas in the past, agreements and presidential orders between the US and Iran regarding disputed assets prevented victims of terror from seizing Iranian funds, here the court determined that Iran’s rights to a judgment against Cubic did not really exist until 1998, pushing away the usual obstacles.

The US government supported this position, a point that could eventually become a problem in light of the new potential US-Iran rapprochement.

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