The International Court of Justice (ICJ) in the Hague ruled on Thursday that the U.S. government improperly allowed some courts to freeze Iranian assets, but also rejected Iran’s bid to unlock $1.75 billion in frozen assets.

Tehran filed a case with the ICJ in 1996 after the U.S. Supreme Court ruled that victims of terrorist attacks linked to Iran could collect compensation from the billions in Iranian assets frozen by the U.S. government.

“Iran comes to the court with unclean hands. Indeed, it is a remarkable show of bad faith. Iran’s bad acts include support for terrorist bombings, assassinations, kidnappings, and airline hijackings,” the U.S. government said in 2019, unsuccessfully arguing that the Iranian regime lacked the standing to bring a case before the ICJ.

According to the suit, the U.S. seized assets from Iranian companies that should have been shielded by a 1955 “friendship treaty,” obviously signed long before Islamic extremists overthrew the Iranian government in 1979. The United States officially withdrew from the treaty in 2018, but Iran argued that it was in effect when the assets were frozen.

“American courts have ruled through illegitimate decrees that these assets must be put at the disposal of Americans and the families of those who were killed in Lebanon. It’s not clear what Americans were doing in Lebanon and what this issue has to do with Iran,” then-Iranian President Hassan Rouhani said in 2016, referring to the 1983 bombing of the Marine barracks in Beirut. 

Rescuers probe the wreckage of the U.S. Marine barracks in Beirut, Lebanon, on October 24, 1983, a day after a suicide truck bomb destroyed the barracks. (AP Photo/Zouki)

A Marine honor guard and band are shown with 16 coffins of U.S. Marines killed in the Beirut bombing, during a service at Dover Air Force Base on October 29, 1983. (AP Photo)

The ICJ agreed on Thursday, ruling that the U.S. “violated its obligations” under the treaty and should pay compensation to Iran. The court said it would hold hearings to determine the compensation amount if the U.S. and Iran could not agree on a figure within two years.

The court, however, rejected Iran’s bid to unlock $1.75 billion from its central bank, Bank Markazi, held in the United States. The ICJ explained that it had no jurisdiction in that case because, unlike the Iranian companies it ruled in favor of, Bank Markazi is not a commercial entity.

The U.S. State Department said its largely pleased with the ICJ ruling, because while it found the smaller judgments that were rendered in Iran’s favor disappointing, the decision on Bank Markazi was “a major blow to Iran’s case.”

The Iranian Foreign Ministry took the opposite view, claiming the ICJ verdict “shows once again the legitimacy” of Iran’s complaints and highlights “the illegal behavior of the United States.”

Iran said the ruling “correctly rejected all the false defenses of the United States” and “established the liability of the American government.”