LUXEMBOURG (Reuters) - A Luxembourg court refused on Wednesday to enforce a U.S. ruling that would have helped families of victims of the Sept. 11, 2001 attacks claim Iranian assets held with a Luxembourg-based clearing house.
The court ruled that there were no grounds in international law to uphold in Luxembourg a U.S. court decision in 2012 to strip Iran of sovereign immunity.
Seven years ago, a New York court found there was evidence to show that Iran provided "material support and resources to al Qaeda for acts of terrorism". The militant group carried out the hijacked plane attacks on New York and Washington.
That court awarded the plaintiffs damages of over $7 billion. Iran denies any links to Al Qaeda or any involvement in the Sept. 11 attacks.
However, the Luxembourg court said the plaintiffs could not continue their legal case to seize Iranian assets in the country.
"The rule on which the U.S. court had relied to remove jurisdictional immunity is not in accordance with public international law and cannot be applied in the context of the Luxembourg case," the court said in a statement.
Families of victims are seeking access to $1.6 billion of Iranian funds in Luxembourg, which were frozen as part of international sanctions over Iran's nuclear programme.
They were not made available to Tehran, even after sanctions were lifted in 2016. The Luxembourg court has yet to rule whether the money, held with Luxembourg-based clearing house Clearstream, can be returned to Iran.
(Reporting by Michele Sinner; Writing by Robin Emmott; Editing by Philip Blenkinsop and Frances Kerry)