Court of Appeal Upholds Ruling Against Iran
On June 30th, 2017, the Ontario Court of Appeal (the “Court”) dismissed an appeal by the Islamic Republic of Iran, the Iranian Ministry of Information and Security and the Iranian Revolutionary Guard Corps (“Iran”) in Tracy v Iran (Information and Security). This ruling upholds the lower court decision previously reported in Anti-Terrorism and Charity Law Alert No. 45, whereby the Ontario Superior Court of Justice, in accordance with the Justice for Victims of Terrorism Act (“JVTA”), had dismissed Iran’s motion to reverse the court-ordered seizure of certain non-diplomatic assets in Ontario and the recognition orders for the enforcement of a series of US judgements in favour of American victims of terrorism.
According to the Court, Iran submitted the same arguments previously made before the lower court, which, if accepted, would render JVTA enforcement actions “a cumbersome and largely unworkable process that would provide very limited rights of recourse to victims of terrorism”. It therefore dismissed the appeals, with two limited exceptions.
The limited exception considered by the Court concerned the dates of certain terrorist attacks. Subsection 4(1) of the JVTA creates a cause of action for loss or damage due to acts of terrorism on or after January 1, 1985. However, some of the terrorist acts occurred prior to 1985 and were, therefore, beyond the retroactive scope of the JVTA. For this reason, the Court accepted that two of the US judgements fell outside the remedial protection afforded by the JVTA and could not be enforced in Canada. The lower court had accepted these judgements under the premise that, in the interpretation of the motion judge, subsection 4(1) of the JVTA referred to the date “when the losses were suffered and not the date that a terrorist attack occurred.” On appeal, the Court rejected this view in light of subsections 4(5) of the JVTA and 6.1(2) of the State Immunity Act, the latter of which clearly prescribes that a foreign state’s immunity is only removed for its support of terrorism on or after January 1, 1985.
This case is important because it establishes that the retroactive effect of the JVTA is limited to January 1, 1985. Furthermore, charities and not-for-profits that work internationally, particularly in conflict zones, should remember that the JVTA does not only affect foreign states, but applies to any person or organization involved in the support or sponsorship of terrorist activities.