MONTREAL - One of the world's most controversial regimes argued in a Canadian courtroom Wednesday that it cannot be sued civilly for the killing of Montreal photojournalist Zahra Kazemi.

The Iranian government defended itself through a Montreal law firm in a $17-million civil suit launched by the estate and family of the slain Iranian-Canadian woman.

Iran argued that neither it nor its leader, Grand Ayatollah Ali Khamenei, can be sued under Canada's State Immunity Act and that the case against it should be dismissed.

After more than two-and-a-half years of legal arguments, the case finally made its way before a judge Wednesday in Quebec Superior Court.

The suit names as defendants Iran, Khamenei, Tehran prosecutor Saeed Mortazavi and prison official Mohammad Bakhshi.

Lawyer James Woods, representing the government of Iran, argued that state immunity extends to functionaries and government employees and, as such, Mortazavi and Bakhshi cannot be sued either.

As it stands, the act only allows states to be sued in civil court under very strict conditions and mainly for commercial purposes. Woods told Justice Robert Mongeon that the lawsuit doesn't meet any of the exceptions cited and as a result should be thrown out.

That's something Kazemi's lawyers will dispute.

Lawyer Kurt Johnson is challenging the constitutionality of the State Immunity Act. He says it allows for infringement of rights protected under the Charter of Rights and Freedoms and the Bill of Rights, because the act prohibits Hashemi from pursuing Iran in Canada.

"(Kazemi's son) Stephan Kazemi and the estate of his late mother would be in a legal black hole if this court doesn't entertain jurisdiction to hear this claim," said Johnson.

"We've specifically alleged that the Iranian justice system, which is the only other natural forum for this case, is incapable of hearing it."

The Canadian Centre for International Justice and Amnesty International Canada's francophone branch are interveners in the case.

Kazemi, 54, was an Iranian-Canadian citizen who was arrested on June 23, 2003, as she photographed relatives of detainees outside Evin prison in Tehran.

She was never formally charged with any crime, but while in custody she was beaten and died of her injuries on July 10, 2003. Her body was hastily buried in Iran, according to religious custom.

Since then, Hashemi has tried unsuccessfully to have his mother's body repatriated.

Hashemi said he filed the suit in 2006 after it became clear Canada wouldn't push his mother's case any further.

That the case has finally made it before a court and that Iran has seen fit to defend itself are both good signs, Hashemi said.

"They do care because they have retained the service of (lawyers) to represent their so-called rights," Hashemi said outside the courtroom.

"They do care," Hashemi said of the Iranian government.

"Unfortunately, the very last option (I had) was a language they understand very well: the language of money."

The Kazemi case has created a frosty relationship between Canada and Iran that still exists today.

However, the Canadian government is intervening in the case in a way that could help the Iranian argument. Canada's attorney general is defending the constitutional legitimacy of the immunity act.

"The case raises the issue of the constitutional validity of the State Immunity Act and the opinion of the attorney general is that the act is constitutional and in conformity with international law," said lawyer Bernard Latarte.

"Iran is seeking the rejection of the lawsuit, we are basically defending the constitutionality of the act. That's the only reason the government intervened."

This year in Ottawa, both the government and a Liberal MP have introduced legislation seeking to amend the controversial act to allow Canadians who are victims of terrorism or torture to sue foreign states.

While past attempts to sue foreign governments for torture on Canadian soil have failed, Justice Robert Mongeon expressed a willingness to hear all sides before ruling.

"We're here to debate an important question that is not the subject of an elaborate jurisprudence," said Mongeon.

"My intention is not to close doors. If I open a door, it'll be open for everyone."

Five days have been set aside for hearings in Quebec Superior Court, but its likely that a decision won't be coming in the immediate future, Mongeon warned.