The limits of state immunity: Ontario court grants judgment against Iran for terrorism

In a significant development for civil claims against foreign states, the Ontario Superior Court of Justice in Haftlang v. Iran has ordered $200 million in compensatory and punitive damages against Iran¹. The Court confirmed an exception to the general principle that states are immune from claims under Canadian law for terrorist activity, and clarified that such activity can include conduct by a state against its own nationals within its own territory.

What you need to know

• State immunity lifted. The State Immunity Act (SIA) and Justice for Victims of Terrorism Act (JVTA) create exceptions to the immunity from claims that states typically enjoy under Canadian law for supporting terrorism.
• Expansive definition of terrorism. For the purposes of the legislation, terrorist activity is not limited to acts carried out on foreign soil and can include politically, religiously, or ideologically motivated violence carried out by a state against its own citizens domestically.
• Significant damages: The Court awarded $100 million in compensatory damages and $100 million in punitive damages, emphasizing that awards must be substantial enough to register with offending regimes.
• Limits remain. Conduct predating January 1, 1985 and acts attributable to other states fall outside the scope of the immunity exception.

Background

The plaintiff was recruited by Iran as a child soldier to fight in the Iran-Iraq war, where he was captured and imprisoned by Iraq. After the war, he was subjected to years of detention, torture, and abuse by Iranian authorities for criticizing the Iranian regime. He eventually escaped to Canada, where he later became a citizen. He filed a claim against Iran in the Ontario Superior Court of Justice seeking damages from Iran for his imprisonment and torture. Iran did not defend the claim or otherwise participate in the proceeding.

Sovereign immunity and the terrorism exception

As a general rule, states are immune from suit under Canadian law; however, this principle is subject to certain exceptions. In particular, sections 6.1(1) of the SIA and 4(1) of the JVTA entitle a Canadian court to take jurisdiction over a claim against a foreign state for terrorist activity arising after January 1, 1985 where the Government of Canada has included the state on a list of states who support terrorism.

The Court’s decision

Notwithstanding that Iran did not participate in the proceeding, the Court was required to consider whether it had jurisdiction to grant judgment. In this respect, the Court held that a portion of the claim concerning the plaintiff’s service as a child soldier prior to 1985 fell outside the SIA and the JVTA. The Court also held that the capture and imprisonment of the plaintiff by Iraq during the war was not attributable to Iran. The Court clarified that “terrorist activity” is different from “war crimes”, and requires a plaintiff to show a political, religious, or ideological purpose. Instilling fear for other purposes, such as territorial expansion or illegal settlement, do not fall within the exception².

Having found that Iran was not immune from suit, the Court awarded $200 million in compensatory and punitive awards. This is an exceptionally high amount by Canadian standards, which the Court justified as appropriate to fully denunciate and deter such conduct in future³.

Implications

Haftlang v. Iran answers an important question about whether the terrorism exception to state immunity can include acts committed by a state against its own nationals domestically. The Court’s interpretation creates a potentially broad ability for individuals to bring claims in Canadian courts against states. It also reflects one of the largest punitive damages awards in Canadian history. It remains to be seen whether and how the judgment may be enforced.