INA Corp.’s Acquisition in Islamic Republic of Iran

Facts

A company that is an affiliate of the INA Corporation acquired a significant ownership of an Iranian insurance company. It acquired 20 percent ownership in shares of Bimek Shargh and the process got approval from the Iranian insurance authority. This transaction was made in 1977 when the company paid a sum amounting to 20 million to acquire the shares

Issue

INA filed a case in court alleging a decline in value of its 20 percent ownership in the Iranian company citing other issues such as interest and legal expenses.

Holding

Islamic republic of Iran demanded a motion dismissal from the district court asserting that the court lacked direct jurisdiction to handle the case. Iran also maintains that the Foreign Sovereign Immunities Act of 1976 of FSIA gave it immunity from legal suit.

Reasoning

The immunity appeal is challenged by the fact that the said agency was considered to be separate from the state.

1. Concerning sovereign immunity, as mentioned above, the agency that developed this act and the state are two separate entities. The relationship between the state and FSIA greatly affects the court’s jurisdiction in this case.
2. The claims tribunal found Iran guilty and awarded the complainant its insured equity interest claim arguing that Iran was seeking to deprive the company of shares in the park diary illegally. The republic of Iran paid the equity interest and damages in excess to cover for the legal expenses incurred in the suit.