Estate of Michael Heiser and 121 Others v The Islamic Republic of Iran

Decision after consideration of full written submissions.

Hand down hearing date 31 July 2019.

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

The Application Notice

On 15 July 2019 the Claimants issued an application notice seeking an order in the following terms:

“An order pursuant to CPR 3 and /or CPR 32.1 and/or the Court's inherent jurisdiction for permission to adduce and rely upon (i) the second witness statement of Mr Curtis Mechling dated 10 July 2019 (which provides further evidence of the extent of Iran's diplomatic presence in New York) and (ii) an expert report of the Honorable Timothy K Lewis (which addresses the nature of the jurisdiction of the US District Court of the District of Columbia); and that the court be able to have regard (if necessary) to this evidence when determining the state immunity issues as defined in the order of Mr Justice Goose dated 7 November 2018.

The reason for seeking this order is that it became plain in light of the arguments advanced by the Defendants for the first time at the hearing of this case between 2 and 5 July 2019 that evidence on these two issues could (depending on the court's decision on the Claimants' primary case about section 31(1)(a) Civil Jurisdiction and Judgments Act 1982) be essential for the correct, and fair, resolution of these claims. For that reason, and those set out further in the fifth witness statement of Mr Jeremy Andrews, it is appropriate to grant the order sought.”

As the application notice states, the evidence in support of it is a witness statement from Mr Jeremy Andrews of DLA Piper LLP, the Claimants' solicitors. The witness statement is dated 12 July 2019.

Background

These proceedings stem from the Claimants' application to enforce in England and Wales twelve Judgments of the United States District Court for the District of Columbia. These Judgments arise out of terrorist incidents occurring in a number of Middle Eastern countries and, in one case, in New York.

The proceedings have a long procedural history dating back to the issue of the Claim Form and Particulars of Claim on 5 July 2012. I will refer to this later. At this stage, I can start with the order of Goose J made by consent on 7 November 2018. He ordered a hearing of preliminary issues. The first issues were the “service issues”. The second issues were the “state immunity issues”. The latter were described as:

“whether the Defendants are immune from the jurisdiction of the English courts pursuant to the State Immunity Act 1978 and/or section 31 of the Civil Jurisdiction and Judgments Act 1982 or otherwise. …”

Both the service issues and the state immunity issues were ordered to be listed to be heard together on the first available date after 6 May 2019 with a time estimate of 4 days.

A detailed timetable for the preliminary issues was ordered as follows:

“4. The timetable in relation to the preliminary issues shall be as follows:

4.1 The Defendants shall file their additional evidence in relation to the preliminary issues by 4pm on Friday 11 January 2017;

4.2 The Claimants shall submit evidence in response by 4pm Friday 8 March 2019;

4.3 The Defendants have the right to submit evidence in rebuttal by 4pm Friday 5 April 2019;

4.4 The evidence referred to in paragraphs 4.1–4.3 above may include expert evidence on matters of US law of relevance to the preliminary issues if the parties are so advised;

…

4.7 Skeleton arguments are to be exchanged by close of business 2 clear days before the start of the hearing”.

The evidence filed by the parties was as follows:

(i) Second witness statement of Mark Howarth, solicitor for the Defendants. This statement is dated 11 January 2019.

(ii) Witness statement of Sean William McGuiness, solicitor for the Claimants. This witness statement is dated 15 March 2019.

(iii) Witness statement of Curtis C. Mechling. Mr Mechling is an American lawyer at the law firm Stroock & Stroock & Lavan LLP, the attorneys for a number of the Claimants. His witness statement is dated 15 March 2019.

(iv) Third witness statement of Jeremy Edward Needham Andrews. Mr Andrews is a solicitor for the Claimants. His witness statement is dated 15 March 2019.

(v) Witness statement of Laina C. Lopez. Ms Lopez is an American lawyer acting on behalf of the Defendants. Her witness statement is dated 12 April 2019.

(vi) Third witness statement of Mark Howarth. This witness statement is dated 12 April 2019.

(vii) Report of Professor Michael D Ramsey dated 12 April 2019. This was served on behalf of the Defendants. Professor Ramsey is Professor of Law at the University of Santiago School of Law in Santiago, California.

(viii) Report of Professor David P Stewart. This report is dated 17 May 2019 and was served on behalf of the Claimants. Professor Stewart is currently Professor of Practice at Georgetown University Law Center, Washington DC.

(ix) Affidavit of Shale D Stiller. Mr Stiller is an American lawyer and partner in DLA Piper LLP (US) in Baltimore, Maryland.

The hearing of the preliminary issues took place between Tuesday 2 July 2019 and Friday 5 July 2019. All the submissions on state immunity were completed. There was not enough time to deal with the service issues. These were adjourned to be heard on Monday 22 July 2019.

The matters to be decided in relation to the state immunity issues are complex. They fall into three main categories namely:

i. Have the Defendants submitted to the jurisdiction?

ii. Have the Claimants fulfilled the requirements of section 31(1)(a) of the Civil Jurisdiction and Judgments Act 1982 (“the 1982 Act”)?

iii. Have the Claimants fulfilled the requirements of section 31(1)(b) of the 1982 Act?

This application concerns only the matters arising under section 31(1)(a). Those matters fall under two main subheadings:

(i) Does English law require the Defendants to have had a presence in the United States at the time when the proceedings were instituted? The Claimants submit that there is no such requirement. The Defendants submit that there is.

(ii) If there is a presence requirement, were the Defendants present in the US so as to fulfil that requirement? It is this question which has given rise to the application notice.

Before I turn to the detail, I will return to the timetabling. Absent this application I intended to send out a draft Judgment on the state immunity issues during the week commencing 15 July 2019. After hearing the service issues on 22 July 2019, it was my intention to send out a draft Judgment on those issues within a few days of that hearing. I had hoped that the entire Judgment (consolidated as one Judgment) would have been handed down before the end of term on 31 July 2019. Whether that would have been possible, and whether an order could have been made, including consequential orders, is not known. It is right to say that, during the hearing of 5 July 2019, counsel for both sides agreed that time was not of the essence, and that the formal hand down of the Judgment and consequential orders could if necessary be left to the beginning of the new term in October 2019.

During the evening of Friday 12 July 2019 my clerk sent to me details of the proposed order and documents in support of it. At that stage the application notice requested that the application be dealt with on paper. On Saturday 13 July 2019 I caused my clerk to send an email to the parties stating, inter alia, that I did not believe that dealing with the application without a hearing was possible, unless the Defendants consented. The Defendants did consent and I have received written submissions from both sides during the week commencing 15 July 2019. This judgment is based on those written submissions.

The Issues Sought to be Addressed

The first issue concerns two organisations. These are the Alavi Foundation and 650 Fifth Avenue Company. The evidence from the documents is that the Alavi Foundation is a public charitable association incorporated in New York and 650 Fifth Avenue Company is a partnership comprising two partners, Assa Corporation and the Alavi Foundation. Assa Corporation is a New York corporation incorporated in 1989 and dissolved in 2010.

The second issue concerns whether or not the Claimants can prove that the Defendants had a presence in the United States by virtue of their United Nations delegation.

The First Issue

The Claimants relied on a case in the United States District Court for the Southern District in New York so as to attempt to establish that the Defendants were present in the United States. This case is Kirschenbaum et al v 650 Fifth Avenue [ 257 F.Supp.3d4 63 (S.D.N.Y.2017)]. From this case the Claimants say that this Court should find that both the Alavi Foundation and 650 Fifth Avenue Company were agents or instrumentalities of Iran. The Defendants submit that findings in the Kirschenbaum case are not admissible in this court as evidence of the facts decided.

However, in their skeleton argument, counsel for the Defendants made this further submission:

“53. Finally, the US is a federal system and the US Judgments emanate from state rather than federal courts. Accordingly,...