A US federal appeals court has overturned a 2017 verdict that allowed the seizure of an Iran-linked skyscraper in New York City.

In June, 2017, a US court verdict allowed the government to seize the midtown Manhattan office tower owned largely by a charity organization, the Alavi Foundation.

The jury then claimed that the charity was controlled by the Iranian government and the rent generated from the tower constituted a violation of US sanctions against Iran. 

On Friday, the 2nd US Circuit Court of Appeals in Manhattan ruled 3-0 that there was "a troubling pattern of errors on relatively straightforward issues" in this case.

“Getting to any outcome requires a fair and procedurally adequate process, something that has been lacking in this case. There are no shortcuts in the rule of law," said Circuit Judge Richard Wesley.

The decision is considered as a defeat for the US Department of Justice as the government had hoped to sell the building for nearly one billion dollars.

Also in 2014, US District Judge Katherine Forrest granted authority to federal prosecutors to confiscate the building. However, an appeals court reversed that ruling in 2016.

Established in 1978, the non-profit organization has been working to advance the Islamic and Persian culture in the US.

The assets of the Alavi Foundation includes the building in Manhattan, as well as Islamic centers consisting of schools and mosques in New York City, Maryland, California, Texas and Virginia.

Without rent from the office building, the Alavi Foundation would have almost no way to continue supporting the Islamic centers.

American legal scholars say they know of only a few cases in US history in which law enforcement authorities have seized a house of worship.

The organization has also given millions of dollars to American schools, universities and charitable organizations; among them Harvard, Columbia and Rutgers university.