Bank Markazi Will Ask Court to Block Payment to Terror Victims

Iran’s Central Bank, Bank Markazi Jomhouri Islami Iran, will ask a U.S. judge in New York to dismiss a suit freezing alleged Iranian assets held by Citigroup Inc. (C), according to a court filing.

The assets were frozen as part of an attempt to collect on a $2.7 billion judgment in a suit claiming Iran aided the 1983 bombing of a U.S. Marine Corps barracks in Beirut. A federal judge in 2008 froze cash and bonds held in a custodial account at Citibank in the name of Clearstream Banking SA, a bank based in Luxembourg.

Bank Markazi is scheduled in February to ask a federal court in New York to dismiss a lawsuit seeking to enforce collection of the judgment, claiming it’s barred by the U.S. Foreign Sovereign Immunities Act, according to court papers. The law limits claims against foreign governments. Clearstream is also scheduled to ask that the freeze be lifted.

“Clearstream strongly condemns the 1983 terrorist attacks on the U.S. military base in Beirut, Lebanon, and deeply sympathizes with the victims of those attacks and their families,” Nicolas Nonnenmacher, a bank spokesman, said in an e-mail. “As a custodian, Clearstream has a duty to protect its customers’ assets, and believes the plaintiffs’ claims against Clearstream are legally and factually without merit.”

“Citibank has complied with all applicable laws and court orders in this case,” Molly Meiners, a spokeswoman for the New York-based bank, said in an e-mailed statement. “It continues to hold the assets that were frozen by the court and will comply with any further orders from the court in the pending litigation as to their disposition.”

The case is Peterson v. Islamic Republic of Iran, 10- cv-4518, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Bob Van Voris in New York federal court at rvanvoris@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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