The Great Satan Pays Up

Even as Tehran's revolutionary leaders fulminated against the Great Satan last week, they got some good news from Washington: the U.S. Supreme Court unanimously upheld Jimmy Carter's right to terminate American suits against Iran and to nullify attachments against Iranian assets, as part of the controversial deal that won freedom for the 52 hostages.

The way was thus cleared for the release of $2.3 billion in Iranian assets still held in U.S. banks--the last of the estimated $12 billion that Carter had frozen during the hostage crisis. Of the newly freed assets, $1.3 billion will now return to Iran. The remaining $1 billion will go into a special fund to cover awards by an arbitration tribunal meeting at The Hague. (Iran is pledged to replenish this fund so as to keep a minimum balance of $500 million.) It is to this body that U.S. companies must now submit their claims against Iran. The tribunal, comprising three Iranians, three Americans and three neutral arbitrators, met at The Hague last week to set up ground rules, but will not begin processing claims until October.

The Supreme Court had acted with unaccustomed speed to resolve the issue before the July 19 deadline for the return of Iranian assets, as stipulated by the U.S.-Iran agreement. The plaintiff in the case, Dames & Moore, a California engineering firm, was one of some 450 companies seeking a total of $4 billion in breach-of-contract suits against Iran. Contesting the President's authority to make the hostage deal without the consent of Congress, Dames & Moore argued that its provisions represented an unconstitutional "taking" of their property without "just compensation," as required by the Fifth Amendment.

The court in a 31-page decision held that the President had the authority to nullify the attachments and return Iran's assets under the broad terms of the 1977 International Emergency Economic Powers Act. The President also had the authority to suspend claims against Iran, the court said. Justice William Rehnquist, who wrote the decision, found support for this in a long history of congressional acquiescence to foreign claims settlements by the Executive.

The Supreme Court's involvement in Iran-related cases may not be over. Last week's decision left open the possibility that companies whose claims are not compensated at The Hague could return and sue the U.S. for "taking" their property without compensation. Furthermore, at least a dozen former hostages have filed damage suits against Iran, although Carter specifically waived their right to do so as part of the deal with Iran. Such corporate and individual claims may land right back in the lap of the Supreme Court.

This file is automatically generated by a robot program, so viewer discretion is required.