The U.S. Supreme Court awarded the money to victims of a 1983 bombing in Lebanon and other attacks linked to Iran. At hearings last year, the United States raised five objections to the court's jurisdiction and the admissibility of the case, which Iran filed in 2016.
The ruling came amid high tensions between Washington and Tehran after President Donald Trump pulled America out of the nuclear deal last year. The United Nations' highest court upheld one U.S. objection to its jurisdiction, but it rejected another and said the third objection should be discussed at a later stage in the case. The judges also rejected two U.S. objections to the admissibility of the case.
The case will now proceed to the merits phase and is expected to take months or years to complete. Tehran filed the case in 2016 based on the 1955 Treaty of Amity between Iran and the U.S., a bilateral agreement that Washington withdrew from last year.
The little-known treaty regulating commerce between the two countries was among numerous ones signed in the wake of World War II as the Truman and Eisenhower administrations tried to assemble a coalition of nations to counter the Soviet Union. It includes a clause that sends unresolved disputes about interpretation of the treaty to the world court.
The attack at the heart of the case was a suicide truck bombing of a U.S. marine barracks in Beirut in October 1983 that killed 241 military personnel and wounded many more. A U.S. court ruled that the attack was carried out by an Iranian agent supported by the Hezbollah militant group.
The court, in an 11-4 majority ruling, upheld a U.S. objection to its jurisdiction based on state immunity claimed by Iran, however they unanimously rejected Washington's assertion that measures freezing Iranian assets fell outside the scope of the treaty.
The judges unanimously rejected U.S. claims that the case was an abuse of process and that it should be thrown out because of Tehran's alleged sponsorship of terrorism and involvement in nuclear proliferation.
Iranian representative Mohsen Mohebi called the decision a success, but added he had expected the court to reject all of the American objections. American lawyers left the court without commenting.