Islamic Republic of Iran v. Pahlavi , 94 A.D.2d 374 ( 1983 )

OPINION OF THE COURT

Silverman, J.

This is an appeal from an order of Special Term, Supreme Court, granting a motion to dismiss the complaint on the ground of forum non conveniens. We affirm.

This is a suit by the Islamic Republic of Iran against the former Shah of Iran and his wife, the former Empress of Iran, based upon the alleged misconduct of the Shah in enriching himself and his family through the exercise and misuse of his powers as emperor.

If entertained, the suit will be extremely burdensome to the people,, taxpayers and the courts of this State. The amounts involved are enormous — many billions of dollars. The assets referred to are numerous and enormous and located all over the world. What is sought is nó less than a review by the courts of this State of the exercise by the Shah of his powers as absolute monarch of a great Nation over a period of a quarter of a century to determine whether and by how much the Shah and the Empress personally and improperly profited. It would be an understatement to say that this lawsuit would be as burdensome as a total of hundreds of ordinary lawsuits. And the courts of New York are asked to assume this burden while our criminal justice system is crumbling because of inadequate facilities; prisoners sit in jails for months awaiting trials; civil litigants are delayed because our courts are so overcrowded. And, of course, the cost of this suit to the taxpayers of New York would be very great.

All of this would have to be borne if this were legitimately a New York matter. But it is not. It is an Iranian matter, a suit by the Islamic Republic of Iran against its former ruler and his wife, nationals (and still presumably domiciliarles, never having elected a new domicile) of Iran, based on acts in Iran relating to the affairs of Iran.

The suit would presumably be governed by Iranian law. It may be questioned whether the law of Iran ever contemplated a suit against the Shah for misconduct in office; but in any event whatever the guess may be, it will have to be a guess as to Iranian law.

We doubt that the courts of this State are really competent to pass on whether an absolute monarch of a foreign country can be held responsible for personally profiting from the use of his powers as an absolute monarch.

In this State and in this country the guess as to Iranian law would have to be made by American Judges brought up and trained in American law, history and political philosophy, and the mores of a democratic republic and the prevailing concepts in this country as to the responsibilities and obligations of public officials in such a republic.

For us, and perhaps generally in countries that have a constitutional government, the rule of law is that public office is a public trust, not to be used for the office holder’s personal profit and subject to rules of fiduciary responsibility. (Of course we do not suggest that the use of public office for private profit is unknown in this country; however, the rules of law applicable to such cases in this country are fairly well established.) But do we have the right to impose our concepts of the responsibility of public office on the activities within a foreign country of its absolute monarch? Are we justified in applying American concepts of fiduciary responsibility to this situation, or is the case to be governed by Louis XIV’s dictum “L’état, c’est moi”, or some other rule — and this under unformulated Iranian law!

Repugnant as it may be to our philosophy, there can have been very few absolute monarchs in the history of the world who did not profit personally from their powers as such monarchs. The royal families of history did not become wealthy because they were shrewd private businessmen or farmers. One thinks of Elizabeth I and monopolies; the Kings of Spain and the wealth of the New World; the Tsars of Russia; King Solomon’s mines, etc., etc. And even today it is said that the King and the royal family of Saudi Arabia and the rulers of the other oil rich States of the Middle East have become enormously wealthy by the use of their powers and influence as rulers. These rulers and their families are said to have large investments and bank deposits in this country. Are the courts of New York really competent to hold these rulers responsible under our concept of fiduciary responsibilities for their use of their monarchical powers?

This surely looks like the “political thicket” out of which courts should stay.

The dispute is as we say an Iranian dispute to be governed by the laws of Iran. What connection does New York have with it? That the Shah spent a few weeks in a hospital in New York may be a basis for in personam jurisdiction. It is irrelevant to forum non conveniens considerations. (Incidentally, the Shah spent more time, after leaving Iran, in Mexico, Panama and Egypt than he did in New York, so why are we favored with this litigation?)

Although the list of assets does include some assets with a relation to New York, this is not a case of a dispute as to the ownership of specific property in this State. The complaint asks to impress a constructive trust on assets of the defendants throughout the world; it asks for an accounting of all moneys and property of any kind received by the defendants from the government of Iran, together with all profits derived therefrom; it asks for general compensatory damages totaling $35 billion, and total damages of over $55 billion. This is plainly a transitory action arising in Iran.

All of the foregoing is recognized by our brother who would retain jurisdiction in New York, but he asks if this lawsuit cannot be brought in New York, where else can it be brought? Where is the more appropriate forum?

The obvious answer — in a civilized world and society — would be Iran, which has all the relevant contacts. The defendants would of course contend that they cannot get a fair trial before an impartial tribunal in Iran; and they may well be right. And implicit in the plaintiff’s position is that at least the prevailing perception in non-Iranian countries is that the present regime in Iran is “a system which does not provide impartial tribunals or procedures compatible with the requirements of due process of law” (CPLR 5304, subd [a], par 1), and thus the judgment of its courts would not be entitled, either as a matter of comity or of absolute right, to recognition in jurisdictions having principles similar to New York.

For almost any other plaintiff, this would be a sound and fair reason for bringing a suit outside Iran. But this plaintiff is the Islamic Republic of Iran — the government of Iran. It is a fundamental obligation of every civilized government to provide a system of impartial courts which can fairly adjudicate disputes involving its citizens. As plaintiff is the government of Iran, that is plaintiff’s own obligation. And if this plaintiff has failed in that fundamental obligation, we do not see why the citizens, taxpayers and courts of this State should be subjected to the enormous burden of this lawsuit at the behest of the government which has failed to meet this fundamental obligation.

There are of course also questions as to personal jurisdiction.

The Uniform Foreign Money-Judgments Recognition Act, CPLR article 53, requires as conditions for conclusive recognition of a foreign country judgment that the judgment not only be rendered under a system which provides impartial tribunals or procedures compatible with due process of law, but also that the foreign court shall have had personal jurisdiction over the defendant. (CPLR 5304, subd [a].) Such jurisdiction may exist because the defendants are domiciliaries of the foreign State (CPLR 5305, subd [a], par 4), or indeed because they are nationals of that State. (Restatement, Conflict of Laws 2d, § 31; Thirteenth Ann Report of NY Judicial Conference, 1968, p 221; see Blackmer v United States, 284 US 421.) With respect to jurisdiction based on nationality, the Restatement (op. cit., p 127) provides: “§ 31. Nationality and Citizenship. A state has power to exercise judicial jurisdiction over an individual who is a national or citizen of the state unless the nature of the individual’s relationship to the state makes the exercise of such jurisdiction unreasonable.” Comment c under this statement includes as examples of qualifications on the jurisdiction of a foreign State over its nationals: “[T]he extent, if any, to which the national’s life or liberty would be endangered if he were to return to the nation * * * The judgment is also likely to be denied recognition and enforcement if the national has been forced to flee from the nation because of a political regime that is hostile to him, even though he may hope to return to the nation once the regime has been overthrown” (id., p 128). These qualifications obviously apply to the Empress and applied to the Shah after his flight. But again the personal danger, and the unfairness to the defendants of recognizing the exercise of personal jurisdiction by the courts of Iran over the defendants, is little more than another facet of the failure of the government of Iran to provide fair and impartial tribunals in which the property and money claims against the Shah can be fairly determined.

It may well be that it is wholly unrealistic to ask this of a revolutionary regime like that of Iran. Robespierre’s regime in France, or the Bolshevik regime in the time of Lenin, could not be expected to provide calm, impartial tribunals to hear property claims against the Bourbons or the Romanovs. If this means that defendants-wrongdoers, — if they are wrongdoers — may escape liability in the civil courts, perhaps that is just one of the inevitable concomitants of a revolution. (Perhaps, even, the revolutionary remedy and the judicial remedy against rulers are fundamentally incompatible, so that the revolutionary government can no more seek judicial relief against its former rulers than the former rulers can against the revolutionary government.) But none of that makes it the responsibility of New York to provide to the revolutionary regime that system of fair, impartial, safe and generally recognized tribunals which the revolution has made impossible in Iran. They are not reasons for imposing on the people of New York the huge burden of this lawsuit.

Nor should the fact that plaintiff chose to bring its suit in New York, rather than in one of the other jurisdictions where the Shah sojourned after his flight, force us to accept the burden of that suit.

New York will have fully discharged its limited responsibility to provide a system of justice applicable to the dispute between plaintiff and its former rulers if New York courts are available for the determination of disputed claims to the ownership of specific property having a situs in New York. That is not this case; it is not even a case arising out of a specific and specifically described and identified transaction (as to which we express no opinion).

On July 27, 1980, while the motion was pending in Special Term, the defendant former Shah of Iran died.

CPLR 1015 (subd [a]) provides: “If a party dies and the claim for or against him is not thereby extinguished the court shall order substitution of the proper parties.”

We have not been informed of any such substitution, and apparently at least as of the time of Special Term’s decision no personal representative of the defendant former Shah of Iran had been appointed.

CPLR 1021 provides in part: “Whether or not it occurs before or after final judgment, if the event requiring substitution is the death of a party, and timely substitution has not been made, the court, before proceeding further, shall, on such notice as it may in its discretion direct, order the persons interested in the decedent’s estate to show cause why the action or appeal should not be dismissed.”

Accordingly, this court directs that such an order to show cause why the appeal should not be dismissed with respect to the defendant former Shah of Iran shall issue, and the appeal will be held in abeyance with respect to the action against the former Shah of Iran pending the determination on such order to show cause.

As to the action against defendant Farah Diba Pahlavi, the former Empress of Iran, the order of the Supreme Court, New York County (Irving Kirschenbaum, J.), entered November 20, 1981 granting defendant’s motion to dismiss the complaint pursuant to CPLR 327 on the ground of forum non conveniens, should be affirmed, with costs.