On June 30, 2017, the Ontario Court of Appeal dismissed an appeal filed by Iran (the Iranian Ministry of Information and Security, The Islamic Republic of Iran and The Iranian Revolutionary Guard Corp.) paving the way for enforcement of foreign judgments by victims of terrorism. If the terrorist or sponsor of terrorism has assets in Canada, the victims can use the Canadian legal system to collect damages awarded outside Canada.
In Tracy v. Iran (Information and Security), 2017 ON 549, the Ontario Court of Appeal upheld a US$1.7-billion judgment against Iran in favour of American victims of terrorism. In the decision, it is made clear, that the Justice for Victims of Terrorism Act has teeth. The purpose of the Justice of Victims of Terrorism Act is to deter terrorism by establishing a cause of action that allows victims of terrorism to sue perpetrators of terrorism and their supporters. Subsection 4(1) of the Justice for Victims of Terrorism Act provides for enforcement in Canadian courts:
“Any person that has suffered loss or damage in or outside Canada on or after January 1, 1985 as a result of an act or omission that is, or had it been committed in Canada would be, punishable under Part II.1 of the Criminal Code, may, in any court of competent jurisdiction, bring an action to recover an amount equal to the loss or damage proved to have been suffered by the person and obtain any additional amount that the court may allow, from any of the following:
(a) any listed entity, or foreign state whose immunity is lifted under section 6.1 of the State Immunity Act, or other person that committed the act or omission that resulted in the loss or damage; or
(b) a foreign state whose immunity is lifted under section 6.1 of the State Immunity Act, or listed entity or other person that — for the benefit of or otherwise in relation to the listed entity referred to in paragraph (a) — committed an act or omission that is, or had it been committed in Canada would be, punishable under any of sections 83.02 to 83.04 and 83.18 to 83.23 of the Criminal Code.”
This provision is restricted by subsection 4(2) of the Justice of Victims of Terrorism Act, which requires that (1) the action has a real and (2) [the plaintiff has a] substantial connection to Canada or the plaintiff is a Canadian citizen or a permanent resident. The defendant is presumed to have committed the actions that led to the foreign judgement (the damages do not need to be proved again in a Canadian court). The court may refuse to hear a claim against a foreign state under subsection (1) if the loss or damage to the plaintiff occurred in the foreign state and the plaintiff has not given the foreign state a reasonable opportunity to submit the dispute to arbitration in accordance with accepted international rules of arbitration.
The Travy v. Iran case is likely not over. It is expected that Iran will file an appeal with Canada’s Supreme Court.