(Editor’s Note: This article also appears in Transnational Litigation Blog.)
On June 27, 2023, Iran sued Canada at the International Court of Justice (ICJ), arguing that the terrorism exceptions in Canada’s State Immunities Act (SIA) violate customary international law. As Professor Maryam Jamshidi noted at Just Security, it seems that the main target of Iran’s action is not Canada but the United States. U.S. courts have awarded billions of dollars in damages against Iran under terrorism exceptions in the U.S. Foreign Sovereign Immunities Act (FSIA).
In Certain Iranian Assets, a separate case at the ICJ against the United States, Iran argued that the U.S. terrorism exceptions violated customary international law. But the Court held (¶ 80) in 2019 that it lacked jurisdiction to consider that question. The United States has not consented to the compulsory jurisdiction of the ICJ, whereas Canada has.
Jamshidi concludes that Iran has a strong claim that terrorism exceptions violate the customary international law rules governing state immunity. Focusing on immunity from suit, I explain in this post why I disagree and why Canada should win this case.
The U.S. and Canadian Terrorism Exceptions
In 1996, the United States amended the FSIA to create an exception for state sponsors of terrorism. That exception, now codified at 28 U.S.C. § 1605A, provides that a foreign state shall not be immune from suit in any case “in which money damages are sought against a foreign state for personal injury or death that was caused by an act of torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support or resources for such an act.” The exception applies only if the foreign state is designated by the State Department as a “state sponsor of terrorism” (currently, Cuba, Iran, North Korea, and Syria), and the victim is a U.S. national, member of the U.S. armed forces, or employee of the United States or U.S. government contractor.
At the same time, the United States created exceptions to allow the enforcement of judgments under the state sponsors of terrorism exception against foreign states (§ 1610(a)(7)) and their agencies or instrumentalities (§ 1610(b)(3)).
Canada’s terrorism exceptions date from 2012, when Canada passed the Justice for Victims of Terrorism Act (JVTA). Among other things, the JVTA amended Canada’s SIA to provide in § 6.1 that “[a] foreign state [listed as a sponsor of terrorism] is not immune from the jurisdiction of a court in proceedings against it for its support of terrorism on or after January 1, 1985.” The SIA also permits enforcement of terrorism judgments by providing in § 12(1)(d) that foreign state sponsors of terrorism are not immune from attachment and execution with respect to “a judgment rendered in an action brought against it for its support of terrorism or its terrorist activity.” As Iran notes in its application to the ICJ, Canada has enforced U.S. terrorism judgments against Iran under this exception.
In 2016, over President Barack Obama’s veto, the U.S. Congress passed the Justice Against Sponsors of Terrorism Act (JASTA), which added a separate terrorism exception to the FSIA. Codified at 28 U.S.C. § 1605B, this exception is limited to claims based on “an act of international terrorism in the United States” but is not limited to claims against countries designated as state sponsors of terrorism. It was intended, in part, to allow claims against Saudi Arabia arising out of the 9/11 attacks to go forward.
State Immunity Under Customary International Law
It is generally agreed that customary international law provides some immunity to states from suit and from the execution of judgments against their property in the courts of other states. But the precise scope of state immunity under customary international law remains uncertain. Most states have adopted the so-called “restrictive theory,” under which foreign states are generally immune from suits based on sovereign acts (acta jure imperii) but not from suits based on non-sovereign acts (acta jure gestionis).
Although ICJ decisions lack formal precedential effect, I agree with Jamshidi that the ICJ’s decision in Jurisdictional Immunities of the State (Germany v. Italy) (2012) provides an important framework for analysis, so a brief summary of that decision focusing on immunity from suit may be useful. In Jurisdictional Immunities, Germany argued that Italy violated customary international law by permitting suits based on the actions of German armed forces during World War II. At the outset, the ICJ noted that state immunity reflects a tension between the fundamental principles of state equality and territorial sovereignty. “Exceptions to the immunity of the State represent a departure from the principle of sovereign equality,” the Court observed, whereas “[i]mmunity may represent a departure from the principle of territorial sovereignty and the jurisdiction which flows from it” (¶ 57).
The ICJ noted “that many States … now distinguish between acta jure gestionis [non-sovereign acts], in respect of which they have limited the immunity which they claim for themselves and which they accord to others, and acta jure imperii [sovereign acts]” (¶ 59). Because the activities of armed forces are clearly sovereign activities, the Court did not address immunity with respect to non-sovereign activities (¶ 60). But the Court did not simply accord Germany immunity based on the classification of its acts as sovereign (¶ 61). Instead, the Court looked specifically at the rules of immunity for armed forces during armed conflict (¶ 65).
To answer this question, the Court applied the classic approach, requiring “‘a settled practice’ together with opinio juris” (¶ 55). The Court looked first to the European Convention on State Immunity and the United Nations Convention on Jurisdictional Immunities of States and Their Properties, while noting that they were “relevant only in so far as their provisions and the process of their adoption and implementation shed light on the content of customary international law” (¶ 66). Turning to state practice in the form of national legislation, the Court found that two states explicitly excluded the acts of foreign armed forces from their territorial tort exceptions and that none applied these exceptions to foreign armed forces (¶¶ 70-71). The Court also considered national court judgments involving acts of foreign armed forces generally (¶ 72) and during armed conflicts particularly (¶¶ 73-76). The Court found decisions from France, Slovenia, Poland, Belgium, Serbia, Brazil, and Germany holding that states are entitled to immunity from suit based on the acts of their armed forces during an armed conflict. Only Italy and Greece had allowed such suits, and Greece later changed its practice.
The ICJ went on to find that state practice in the form of court decisions “is accompanied by opinio juris, as demonstrated by the positions taken by States and the jurisprudence of a number of national courts which have made clear that they considered that customary international law required immunity” (¶ 77). The Court also considered significant “[t]he almost complete absence of contrary jurisprudence” and “the absence of any statements by States … asserting that customary international law does not require immunity in such cases” (¶ 77). Based on this extensive state practice and opinio juris, the Court concluded that customary international law “require[s] that a State be accorded immunity in proceedings for torts allegedly committed on the territory of another State by its armed forces and other organs of the State in the course of conducting an armed conflict” (¶ 78).
After reaching this conclusion, the Court turned to the question of whether to recognize an exception to this immunity based on the gravity of the violations, the jus cogens nature of the norms, or the lack of other redress. It found that state practice did not support the existence of such exceptions (¶¶ 80-106).
Is Terrorism a Sovereign Act?
As noted above, most states have adopted the restrictive theory of state immunity under which non-sovereign activities (acta jure gestionis) are not entitled to state immunity. So, it is worth asking at the outset whether terrorism and support of terrorism fall in that category.
In Jurisdictional Immunities, the ICJ was careful not to limit acta jure gestionis to commercial activities. Rather, it defined them as acts assessed under the law concerning the “non-sovereign activities of a State,” which include commercial activities but include other activities too (¶ 60). The key question, as James Crawford put it in Brownlie’s Principles of Public International Law, p. 471 (9th ed. 2019), is whether or not the activity is “unique to the state.”
Terrorism and support for terrorism are not activities that are unique to states. When states engage in such activities, they shed the cloak of sovereignty and give up immunity.
State Practice and Opinio Juris
Even if terrorism and support for terrorism are acta juri imperii, states are not necessarily immune from suits based on such acts. Recall that the acts in Jurisdictional Immunities—the conduct of armed forced during armed conflict—were considered sovereign, but the ICJ did not treat this classification as dispositive. Instead, the Court looked for a settled practice of granting immunity with respect to such acts, accompanied by opinio juris. State practice concerning immunity for terrorism looks quite different from state practice concerning immunity for armed forces.
Neither the European Convention nor the U.N. Convention contains an exception for terrorism. But the listing of certain exceptions does not preclude the recognition of other exceptions. The International Law Commission’s commentary on the Draft Articles that became the U.N. Convention “considered that any immunity or exception to immunity accorded under the present articles would have no effect on general international law and would not prejudice the future development of State practice.”
Turning to national legislation, in Jurisdictional Immunities, the ICJ found that two of the nine states that had adopted a territorial tort exception expressly excluded the acts of foreign armed forces from that exception. By comparison, none of the ten states that have adopted state immunity acts have expressly granted immunity for acts of terrorism, while two—Canada and the United States—have expressly denied immunity for such acts.
State practice in the form of court decisions also looks different. In Jurisdictional Immunities, the ICJ noted that courts in eight countries had held that the acts of armed forces in armed conflict were immune from suit, whereas only one country (Italy) maintained the opposite position. In the terrorism context, there are many decisions from the United States holding that Iran and other states are not immune from suits based on acts of terrorism. Canadian courts have held the same. Additionally, Italy’s Court of Cassation has held that U.S. terrorism judgments are enforceable in Italy, reasoning that the immunity of a foreign state does not extend to sovereign offenses (“delicta imperii”) (translated to English with commentary here). France’s Court of Cassation, on the other hand, has held that U.S. terrorism judgments are not enforceable in France because of state immunity. A Luxembourg district court has similarly denied recognition of a U.S. terrorism judgment, although that decision has been appealed.
For terrorism, in short, there is nothing like the consistent state practice and opinio juris that the ICJ in Jurisdictional Immunities found supporting the immunity of armed forced during armed conflict. Although some state practice supports immunity for terrorism, other state practice denies it.
The Baseline Question
This brings us to the critical question of how to deal with mixed state practice. In her post, Jamshidi helpfully flags this question by asking what Iran would have to show to prevail:
[D]oes it need to show that the terrorism exception is not recognized as an exception to sovereign immunity under customary international law or must it demonstrate that customary international law affirmatively embraces immunity for foreign sovereigns accused of engaging in terrorist acts?
I refer to this as the “baseline question”: Does the analysis begin by assuming a prohibitive rule (immunity) and require state practice and opinio juris to create an exception? Or does it begin by assuming a permissive rule (no immunity) and require state practice and opinio juris to establish immunity? When the evidence is mixed, where one starts may determine where one ends.
I read Jurisdictional Immunities as adopting a baseline of no immunity. The ICJ in that case did not assume that Germany would be immune from suit unless it found a settled practice and opinio juris recognizing an exception. Instead, as noted above, the ICJ looked for (and found) state practice and opinio juris affirmatively recognizing immunity for the acts of armed forces during armed conflict.
Iran’s application to the ICJ, by contrast, assumes a baseline of immunity (¶ 22). Here, it relies on the ICJ’s rejection of a jus cogens exception to state immunity. But it bears repeating that the ICJ addressed the question of exceptions only after it had identified a customary international law rule of immunity for armed forces during armed conflict based on state practice and opinio juris. Whether immunity attaches to certain activities and whether to recognize exceptions to immunity once it has attached are separate questions. One cannot argue, based on the ICJ’s rejection of a jus cogens exception that immunity may be presumed in the absence of state practice and opinio juris establishing immunity. That is emphatically not what the Court in Jurisdictional Immunities did.
The baseline question arises in many areas of customary international law. I have previously written about this question in the in context of jurisdiction and (with Chimène Keitner) in the context of foreign official immunity. In the context of state immunity, one might be tempted to argue for a baseline of non-immunity by invoking the so-called “Lotus principle”—that “[r]estrictions upon the independence of States cannot … be presumed.” But, in my view, that would be error. There are some areas of customary international law in which states do begin with a prohibitive rule and require state practice and opinio juris to establish a permissive exception. (Ironically, considering the Lotus case, prescriptive jurisdiction is one of those areas.)
Instead, one must look to state practice to determine the baseline by asking, in each area of customary international law, whether states begin with a prohibitive rule or a permissive one. For state immunity, state practice supports a baseline of non-immunity, requiring state practice and opinio juris to establish immunity with respect to particular kinds of state activity, consistent with the ICJ’s approach in Jurisdictional Immunities.
Although space does not permit full consideration of the question here, significant evidence is found in the transition from the absolute to the restrictive theory of state immunity. As Pierre-Hugues Verdier and Erik Voeten have chronicled, between 1886 and 2010, 76 countries adopted the restrictive theory, while 45 countries continued to adhere to the absolute theory. (Since they compiled their list, Russia adopted the restrictive theory, and China has proposed legislation to do the same.)
If customary international law starts from a baseline of immunity, a restrictive approach would violate international law until there was sufficient practice to show that it was settled practice. If, on the other hand, customary international law starts from a baseline of non-immunity, then the restrictive approach would be permissible as soon as there was sufficient practice to show that the absolute theory was no longer settled.
In 1952, the Tate Letter adopted the restrictive theory for the United States. According to Verdier and Voeten, only seven other countries had previously done so. Seven countries hardly amount to a settled practice, yet the United States did not consider itself to be violating international law. In 1978, the United Kingdom codified the restrictive theory by passing the State Immunity Act. By this point 18 other countries had done so. Again, 18 countries do not establish a settled practice, but the United Kingdom did not consider itself to be violating international law. Both the United States and the United Kingdom (as well as other countries making similar choices) viewed the restrictive theory as an option that international law permitted them to take. This historical evidence is consistent only with a baseline of non-immunity.
The terrorism exceptions to state immunity adopted by Canada and the United States do not violate customary international law. First, under the restrictive theory, states are immune from suit only for their sovereign acts. Terrorism and supporting terrorism are not sovereign acts.
Second, state practice and opinio juris do not establish state immunity for terrorism as they do for the conduct of armed forces during armed conflict. Customary international law begins from a baseline of non-immunity and requires a settled practice and opinio juris to establish immunity from suit for terrorist acts. Such settled practice does not exist.
If the ICJ approaches Iran’s claims against Canada the same way it approached Germany’s claims against Italy, Canada should prevail.