TORONTO — A year after suspending relations with Iran and designating the regime a state sponsor of terrorism, the Canadian government was in court on Thursday to defend Tehran’s diplomatic assets from lawsuits by terror victims.

The awkward scene unfolded in a Toronto courtroom where victims of Iranian-backed terrorist organizations are trying to collect damages from the Islamic republic under the newly enacted Justice for Victims of Terrorism Act.

While Iran has ignored the lawsuits, the Canadian government has stepped in to argue that the Iranian embassy, official residence, staff quarters and two bank accounts are “diplomatic assets” of Tehran and cannot be awarded to victims of terrorism.

“The concern of the Attorney-General of Canada is interference with diplomatic property,” Jacqueline Dais-Visca, a Department of Justice lawyer, told the court. “This is about Canada exercising its obligations under international law.”

She said a week after Foreign Affairs Minister John Baird cut ties with Iran last September, Canada delivered a Diplomatic Note to Tehran. It said Canada would protect the Islamic republic’s diplomatic assets and expected Iran to reciprocate by safeguarding the Canadian mission in Tehran.

Canada’s concern is that unless it shields the Iranian embassy, its own foreign missions could be vulnerable. Iran has so far left the Canadian embassy in Tehran untouched, but it has shown little respect for diplomatic posts in the past.

Starting with the violent takeover of the U.S. embassy in Tehran in 1979, followed by the 1983 bombing of the U.S. embassy in Beirut and the bombing of the Israeli embassy in Buenos Aires in 1992, Iran has a long history of targeting the embassies of its adversaries.

The unusual court intervention was prompted by the efforts of American victims of Hamas and Hezbollah to collect damages against Iran in Ontario. At their request, a judge has temporarily frozen all Iranian state assets in Canada.

There is no dispute over Iran’s non-diplomatic assets, which include the Iranian Cultural Centre building in the capital, a parking spot in downtown Ottawa and more than a dozen bank accounts with deposits of at least $2.6-million.

But the government wants the court to lift the freeze on the Iranian embassy and the four other “diplomatic” assets, arguing that Canada is obliged to safeguard the property of Iran’s mission regardless of the state of relations with Tehran.

The federal lawyer argued that the assets were designated as diplomatic in a certificate that the courts are required to respect under Crown prerogative. But under questioning from the judge, she acknowledged that were he to lift the freeze, there would be nothing stopping Iran from immediately emptying the bank accounts and selling off the buildings to keep them out of the hands of terror victims.

He also noted that Iran had been given notice of the case but had chosen not to participate. “They had a chance to come here and defend their property and they didn’t,” said Justice David Brown of the Ontario Superior Court of Justice.

The dispute over diplomatic assets and what kind of immunity they enjoy has landed in the Ontario court in the wake of a new law that allows Canadian victims to sue state sponsors of terrorism — notably Iran and Syria — for damages.

The first case was filed in British Columbia last month by Vancouver dentist Sherri Wise, who was injured in a 1997 bombing by the Iranian-funded Hamas. But the law also allows terror victims from other countries to collect on judgments awarded outside Canada.

Three such cases are now before the Ontario courts, including that of Marla Bennett, who was 24 when she was killed in a 2002 Hamas bombing at Hebrew University in Jerusalem. Two U.S. men who were kidnapped by Hezbollah are also trying to collect, as well as another U.S. victim who sued Iran’s Revolutionary Guards.

Courtesy: National Post