In Tuesday's ruling, a three-judge panel of the US Court of Appeals for the District of Columbia ruled that the US Congress must expressly abrogate the 1980 Algiers Accords before the lawsuit can proceed.
|US court ruling blocks |
more moves against Iran
"There is no clear expression in anything Congress enacted abrogating the Algiers Accords," the judges wrote.
The 52 former hostages had at first failed in their efforts to win damages from Iran for being held captive for 444 days.
A federal district entered a judgment against Iran August 13, 2001, based on a 1996 law allowing lawsuits for “state-supported acts of terrorism”.
But the appeals judges said the 1996 law cannot be used as a basis for the lawsuit because it does not specifically abrogate the Algiers Accords.
The United States and Iran cut diplomatic ties in April 1980 after Islamic students stormed the US Embassy in Tehran in November 1979 and held the staffers hostage.
The Algiers accord, signed in late 1980 between the two countries, detailed the conditions under which the hostages were released.