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July 24, 1979

IMPERIAL IRANIAN AIR FORCE, etc., et al., Defendants.

The opinion of the court was delivered by: FISHER


This case raises serious questions concerning the interpretation of and the relationship between the Foreign Sovereign Immunities Act of 1976, Pub.L. No. 94-583, 90 Stat. 2891 (codified in scattered sections of 28 U.S.C.) (hereinafter "Immunities Act" or "Act") and the Treaty of Amity, Economic Relations and Consular Rights Between the United States of America and Iran, August 15, 1955 (1957) 8 U.S.T. 899, T.I.A.S. 3853 (hereinafter "Treaty of Amity" or "Treaty"). This opinion resolves the defendant's motions to release the restraints on its property and to enter a turnover order, filed April 26 and May 4, 1979 respectively and supersedes my earlier summary opinion, filed May 11, 1979. *fn1" At issue here is this Court's power to attach defendant's property prior to judgment, over objections to attachment based upon claims of sovereign immunity. *fn2"


 A. The Parties

 The defendants in this action are the Imperial Iranian Air Force ("I.I.A.F."), the Iran Aircraft Industries ("I.A.C.I."), and the Imperial and Islamic Governments of Iran ("Iran"), and their successors. Both I.I.A.F. and I.A.C.I. were clients of Behring, making frequent use of its international freight forwarding services. Both entities are alleged to be agencies or instrumentalities of Iran. *fn3" To date, only the Islamic Republic Iranian Air Force ("I.R.I.A.F."), the successor of I.I.A.F., has appeared. Service of process upon all defendants was started through diplomatic channels pursuant to 28 U.S.C. § 1608(a) and (b). As of the May 9th hearing on this motion, however, no return of service had been filed with the Clerk of the Court. On that date, therefore, the time within which the other defendants were required to answer or otherwise respond to the complaint had not yet begun to run. *fn4"

 B. Events Culminating in this Lawsuit

 Starting in August of 1975, I.I.A.F., predecessor to I.R.I.A.F., contracted with Behring for the performance of freight forwarding services. *fn5" As the agreement is portrayed in the Verified Complaint, filed February 28, 1979, Behring would arrange to take delivery of goods purchased by I.I.A.F. at the Behring warehouse in Edison, New Jersey. Behring would often expend monies to pay shipping and related expenses incurred in moving the goods from the vendors' premises to plaintiff's warehouse. At the warehouse, plaintiff's employees would prepare the goods on separate pallets for shipment to Iran.

 Generally, the goods were shipped Via I.I.A.F. cargo planes from either Kennedy International Airport or McGuire Air Force Base in New Jersey. I.I.A.F. would notify Behring of the time and place its planes would be available to take on cargo. Behring would then transport the palletized cargo to the appropriate shipment point, where the cargo would be loaded and transported to Iran. Behring would then submit its invoices to I.I.A.F."s representative in New York City for approval. Upon approval, payment was made under a letter of credit issued in plaintiff's favor by Manufacturer's Hanover Trust Co., New York City, within thirty (30) days of the invoice's approval.

 The agreement between Behring and I.I.A.F. proceeded smoothly until the recent political turmoil in Iran. *fn6" Starting in January of 1979, Behring was unable to communicate with I.I.A.F. officials in Teheran, Iran. In early February, I.I.A.F. ceased flying aircraft to this country. As a result, shipments readied by Behring sat uncollected at either the Edison warehouse or at McGuire Air Force Base. At or about that same time, the I.I.A.F. representative refused to approve payment on any invoices invoices relating to shipments already forwarded to Iran. As of January 31, 1979 those invoices are alleged to have amounted to $ 390,494.00. Plaintiff also alleges that at all relevant times there were sufficient funds available under the letter of credit to pay those invoices once approved.

 During this two-month interval, plaintiff was faced mostly with unknowns. The political turmoil in Iran left plaintiff in doubt as to the ability of the defendants to honor their obligations. I.I.A.F. personnel in New York City vacated their offices and returned to Iran. The Behring representative in Teheran, Iran, was unable to meet or communicate in any way with I.I.A.F. officials in Iran, and was eventually forced to evacuate the country. Plaintiff instituted this lawsuit on February 28, 1979.


 Accompanying the Verified Complaint was an Affidavit of Attachment and an application for the entry of an Order to Show Cause why an order should not be entered authorizing the issuance of a writ of attachment of the property of the defendants located at the Behring warehouse. See Fed.R.Civ.P. 64; N.J.S.A. 2A:26-1 Et seq. In the interim, plaintiff sought a Temporary Restraining Order in the nature of an attachment pending the Court's ruling on the Order to Show Cause. The temporary restraints sought prohibited the defendants from removing any of their property from the jurisdiction of this Court or from cancelling the letter of credit issued in Behring's behalf. On the day the suit was brought, the late Honorable George H. Barlow entered the Order to Show Cause, including the Temporary Restraining Order. *fn7" The return date of the Order to Show Cause was set for March 12, 1979. Due to the fact that service was required to be made pursuant to 28 U.S.C. § 1608, considerable delay occurred before service could be completed. *fn8" Preferring not to decide the questions raised by the Order to Show Cause without input from the defendants, the return date of the Order to Show Cause was carried numerous times, and argument was finally heard on that matter on June 1, 1979. At all times the temporary restraints were maintained in full force and effect.

 It was not until April 26, 1979 that the defendant I.R.I.A.F. retained counsel and appeared in this action. Prior to the return date of the Order to Show Cause, I.R.I.A.F. filed two motions, one calling for the release of all restraints upon its property, and the other requesting the entry of a turnover order directing Behring to release the I.R.I.A.F. property in its possession to I.R.I.A.F. Reserving all of the other legal and factual determinations necessary to be made before a writ of attachment could be issued to the adjourned return date of the Order to Show Cause, I.R.I.A.F."s motions raised for immediate resolution by the Court the actually quite narrow legal question whether the Foreign Sovereign Immunities Act of 1976 prohibits the attachment of the property of a foreign sovereign prior to judgment under the circumstances of this case. *fn9" This opinion answers only that question and does not attempt to address any other issue connected with the issuance of a writ of attachment pursuant to Rule 65, Fed.R.Civ.P., and the New Jersey Attachment Statute, N.J.S.A. 2A:26-1 Et seq.


 Before addressing the central legal questions presented by this motion, there are certain preliminary questions involving this Court's jurisdiction over this action and these defendants which must be noted and determined.

 The central goals of the Immunities Act are to codify the "restrictive theory" of sovereign immunity recognized under international law *fn10" as the statutory law of this country and to provide that the validity of claims of sovereign immunity interposed in suits against foreign states shall be determined by the United States courts rather than by the State Department. 28 U.S.C. § 1602; H.R.Rep. No. 94-1487, 94th Cong., 2d Sess. 14 Reprinted in (1976) U.S.Code Cong. & Admin.News, pp. 6604, 6613 ("H.R.Rep. No. 94-1487"); National American Corp. v. Federal Republic of Nigeria, 448 F. Supp. 622, 638 (S.D.N.Y.1978).

 Under the provisions of the Immunities Act this lawsuit and the defendant I.R.I.A.F. are properly before this Court. Subject matter jurisdiction exists ...

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