JASTA: Time to move on from unjustified lawsuits

Dr. Mohamed A. Ramady
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The issue of JASTA – or the Justice Against Sponsors of Terrorism Act – is now in the news as the Kingdom has started legal action to throw out lawsuits against it in the New York courts. The matter has serious implications for several reasons, namely setting a precedent for waiving sovereign immunity and the obstacles it creates for a possible listing of the Aramco IPO in the New York stock exchange.

JASTA was passed by the US Congress in 2016, and hundreds of relatives of individuals killed in the Sept. 11, 2001, attacks have sued Saudi Arabia in a US court, seeking to take advantage of this law that allows victims of such attacks on US soil to sue state sponsors.


Under normal circumstances, such litigations can be ignored as being spurious and opportunistic but given the importance placed on listing the Aramco IPO in a global stock market with depth and the ability to attract many investors like the New York exchange, the matter is now a priority for Saudi Arabia to remove as an obstacle and move on. Saudi Arabia, which has denied any role in the 2001 attacks, has raised strong objections to JASTA.

Saudi foreign minister Adel Al-Jubeir tried to persuade US lawmakers to amend the law, during his visit to the country last year and the Kingdom believed that the matter has been put on ice, with the Kingdom receiving numerous support from both Gulf and other allies against the JASTA bill, which if applied, will leave the US open to counter suits worldwide and argued that the law would expose US companies, troops and officials to lawsuits in other countries and could anger allies.

For years, US law granting foreign nations broad immunity from lawsuits scuttled attempts by Sept. 11 victims to sue Saudi Arabia in New York. In 2015, US District Court dismissed claims against the kingdom from Sept. 11 families, saying that it did not have jurisdiction over a sovereign nation under international law. This is the argument that Saudi Arabia will still put forward, irrespective of the new law.

For years, US law granting foreign nations broad immunity from lawsuits scuttled attempts by Sept. 11 victims to sue Saudi Arabia in New York

Dr. Mohamed Ramady

Personal rapport

It will also be a test of the newly forged personal rapport between President Trump and Crown Prince Mohammed bin Salman to see if the new Trump Administration will try to veto or delay any possible legal action like President Obama’s earlier failed veto effort.

Will the master “dealmaker” pull off another deal, away from public scrutiny, and avoid jeopardising the expected multi billion investment flow to the US promised by Saudi Arabia under the newfound political and strategic relationship, but which can potentially open them to possible asset seizure under the JASTA claims?

No country is willing to invest in another with such a hostile legal cloud hanging over its head as there are many other friendly countries eager to welcome its investments without a constant litigation worry in the background.

Will this make Saudi Arabia more hesitant to float part of the planned Aramco IPO in the New York stock exchange? Again, many international bourses are competing to have the world’s largest IPO listed in their jurisdiction with welcoming assurances, which could sway the Kingdom to avoid New York until and unless the JASTA issue is put to rest.

The emergence of JASTA has opened a hornet’s nest of unanswered questions and a level of unwelcome uncertainty in the new and warmer Saudi-US relationship, but everything is possible in Trump’s administration. How both sides manage it will determine whether the matter is a wrinkle or a mere passing blip in the relationship.
Dr. Mohamed Ramady is an energy economist and geo political expert on the GCC and former Professor at King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia.

Disclaimer: Views expressed by writers in this section are their own and do not reflect Al Arabiya English's point-of-view.
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