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Applicable Law in International Arbitration: The Iran-U.S. Claims Tribunal Experience

Published online by Cambridge University Press:  27 February 2017

John R. Crook
John R. Crook*
Affiliation:
U.S. Department of State.
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Extract

International commercial arbitration is being enthusiastically promoted throughout the international legal community. Congresses and conferences abound; over three hundred delegates attended the 1988 Tokyo conference of the International Council for Commercial Arbitration. New arbitration journals proliferate. New international arbitration centers compete for business, particularly around the Pacific Rim in such locations as Hong Kong (opened in 1985), Los Angeles (1985), Melbourne (1985) and Vancouver (1986).

Type
Research Article
Information
American Journal of International Law , Volume 83 , Issue 2 , April 1989 , pp. 278 - 311
Copyright
Copyright © American Society of International Law 1989

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References

1 See, e.g., Journal of International Arbitration (initiated in 1984); Arbitration International, published by the Chartered Institute of Arbitrators (1985); and International Arbitration Report, published by Mealey Publications (1986).

2 See Bentil, Making England a More Attractive Venue of International Commercial Arbitration by Less Judicial Oversight, 5 J. Int'l Arb. 49 (1988); and Park, The Influence of National Legal Systems on International Commercial Arbitration: Recent Developments in English Arbitration Law, in Resolving Transnational Disputes Through International Arbitration 81, 97 (T. Carbonneau ed. 1984) [hereinafter Carbonneau].

3 Audit, A National Codification of International Commercial Arbitration: The French Decree of May 12, 1981, in Carbonneau, supra note 2, at 117. The Belgian Act of Mar. 27, 1985, is reprinted in 25 ILM 725 (1986); the 1986 Netherlands statute, bk. 4 of the Code of Civil Procedure, is reprinted in 26 ILM 921 (1987); and chapter 12 of the 1987 Swiss statute on private international law (dealing with international arbitration) is reprinted in 27 ILM 37 (1988).

4 See 12 Y.B. Com. Arb. 361–62 (A.J. van den Berg ed. 1987); Noecker & Hentzen, New Legislation on Arbitration in Canada, 22 Int'l Law. 829 (1988).

5 See K.-H. Böckstiegel, Arbitration and State Enterprises—A Survey on the National and International State of Law and Practice (1984).

6 See, e.g., Derains, Possible Conflict of Laws Rules and the Rules Applicable to the Substance of the Dispute, in UNCITRAL's Project for a Model Law on International Commercial Arbitration 169, 189–90 (P. Sanders ed. 1984) [hereinafter Sanders].

7 For some arbitrators' methods of choosing applicable law, see Lando, The Law Applicable to the Merits of the Dispute, in Contemporary Problems in International Arbitration 101 (J. Lew ed. 1986) [hereinafter Lew]. Professor Lew's Applicable Law in International Commercial Arbitration (1978) [hereinafter Applicable Law] collects an extraordinary range of materials on individual arbitrations, but his net was cast wide and the catch is difficult to cull.

8 The Tribunal's awards can be obtained from the Registry of the Tribunal in The Hague for a fee. They can also be found in the Iran-United States Claims Tribunal Reports (Grotius Publications, Ltd.) [hereinafter Iran-U.S. C.T.R.]; in the Iranian Assets Litigation Reporter (Andrews Publications) [hereinafter I.A.L.R.]; in Mealey's Litigation Reports—Iranian Claims (Mealey Publications); and on WESTLAW.

9 Lillich, Preface, in The Iran-United States Claims Tribunal 1981–83, at vii (R. Lillich ed. 1984) [hereinafter Lillich]. For background on the Tribunal, see Symposium on the Iran–United States Claims Tribunal, 16 L. & Pol'y Int'l Bus. 667 (1984). For a recent bibliography, see Ziade, Selected Bibliography on the Iran–United States Claims Tribunal, 2 ICSID Rev. 534(1987).

10 Stewart, The Iran–United States Claims Tribunal: Accomplishments and Prospects, in 1984 Private Investors Abroad—Problems and Solutions in International Business in 1984, at 525, 529.

11 See Paulsson, Arbitration Under the Rules of the International Chamber of Commerce, in Carbonneau, supra note 2, at 235, 237–38.

12 Declaration of the Government of the Democratic and Popular Republic of Algeria Concerning the Settlement of Claims by the United States of America and the Government of the Islamic Republic of Iran, Jan. 19, 1981, Dep't St. Bull., No. 2047, February 1981, at 3, reprinted in 75 AJIL 422 (1981), and 20 ILM 230 (1981) [hereinafter Claims Settlement Declaration].

13 Dep't St. Bull., No. 2047, at 4.

14 See Stewart & Sherman, Developments at the Iran–United States Claims Tribunal: Private Rights and State Responsibility, in Lillich, supra note 9, at 1, 15–16.

15 On the negotiation of the Claims Settlement Declaration, see Owen, The Final Negotiation and Release in Algiers, in American Hostages in Iran 297 (P. Kreisberg ed. 1985).

16 Convention for the Pacific Settlement of International Disputes, July 29, 1899, 32 Stat. 1779, TS No. 392, 1901 Gr. Brit. TS No. 9 (Cmd. 798). Convention for the Pacific Settlement of International Disputes, Oct. 18, 1907, Art. 37, 36 Stat. 2199, TS No. 536. Both the United States and Iran are parties to the 1899 Hague Convention. (Iran is not a party to the 1907 Convention.)

17 Secretary Root to the American delegates to the Hague Conference, May 31, 1907, Dep't of State File No. 40/302A, reprinted in 1907 Foreign Relations of the United States 1128, 1135, 6 G. Hackworth, Digest of International Law 61 (1943).

18 453 U.S. 654(1981).

19 Id. at 688–90. See Trimble, Foreign Policy Frustrated—Dames & Moore, Claims Court Jurisdiction and a New Raid on the Treasury, 84 Colum. L. Rev. 317 (1984).

20 Feldman, Ted L. Stein on the Iran—U.S. Claims Tribunal—Scholarship par Excellence, 61 Wash. L. Rev. 997, 998(1986).

21 See text at note 107 infra.

22 Butcf. Questech, Inc. v. Ministry of Nat'l Defense, 9 Iran-U.S. C.T.R. 107, 122–23 (1985 II), summarized in 80 AJ1L 362 (1986).

23 See Belief, Foreword, 16 L. & Pol'y Int'l Bus. 667, 672 (1984).

24 See Croff, The Applicable Law in an International Commercial Arbitration: Is It Still a Conflict of Laws Problem?, 16 Int'l Law. 613, 617 (1982); J. Lew, Applicable Law, supra note 7, at 245–47; and Sauser-Hall, L'arbitrage en droit international privé, 44 Institut de Droit International, Annuaire 469 (1952 I), 47 id. at 394 (1957 II), and 48 id. at 264 (1959 II).

25 Mann, Lex Facit Arbitrum, in Liber Amicorum for Martin Domke 157 (P. Sanders ed. 1967).

26 See, e.g., Klein, The Law To Be Applied by the Arbitrators to the Substance of the Dispute, in The Art of Arbitration 189 (J. Schultsz & A.J. van den Berg eds. 1982).

27 European Convention on International Commercial Arbitration, Apr. 21, 1961, 484 UNTS 364, reprinted in International Commercial Arbitration 215 (C. Brower & L. Marks eds. 1983).

28 J. Lew, Applicable Law, supra note 7, at 294.

29 Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, Mar. 18, 1965, 17 UST 1270, TIAS No. 6090, 575 UNTS 159 [hereinafter ICSID Convention].

30 Reprinted in 28 ILM 231 (1989).

31 Reprinted in 15 ILM 701 (1976), and 24 id. at 1302 (1985), respectively.

32 See Craig, International ambition and national restraints in I.C.C. Arbitration, 1 Arb. Int'l 49, 65 (1985); Derains, supra note 6, at 177. The Tribunal has sometimes utilized this technique. See Carolina Brass, Inc. v. Iran, 12 Iran-U.S. C.T.R. 139, 144 (1986 III); cf. Iran v. United States (Case B1), 10 Iran-U.S. C.T.R. 207, 216 (1986 I) (Tribunal declined to decide whether U.S. domestic law or public international law applied, since both produced the same result).

33 See Craig, supra note 32, at 67.

34 See Herrmann, The UNCITRAL Model Law—its background, salient features and purpose, I Arb. Int'l 6, 22(1985).

35 Lalive, Summary of Chairman, in Sanders, supra note 6, at 197, 198–99. Contra Herrmann, supra note 34, at 23.

36 See Goldman, The Applicable Law: General Principles of Law—the Lex Mercatoria, in Lew, supra note 7, at 113; Lando, The Lex Mercatoria in International Commercial Arbitration, 34 Int'l & Comp. L.Q. 747 (1985).

37 Decree of May 12, 1981, 1981 Journal Officiel de la Republique Franchise 1492, translated in 20 ILM 917 (1981). See Audit, supra note 3, at 131.

38 4 Iran-U.S. C.T.R. 263, 267–68 (1983 III). This characterization of the Tribunal's task as a search for justice and equity has been questioned as inconsistent with the duty to decide on the basis of respect for law. Westberg, The Applicable Law Issue in International Business Transactions with Government Parties—Rulings of the Iran-United States Claims Tribunal, 2 ICSID Rev. 473, 481 (1987). CMI is not unique. See Parguin Private Joint Stock Co. v. United States, 13 Iran-U.S. C.T.R. 261, 268–69 (1986 IV) (interest awarded notwithstanding choice-of-law provisions arguably precluding it); Atomic Energy Org. v. United States, 12 Iran-U.S. C.T.R. 25, 28 (1986 III) (same); Concurring and Dissenting Opinion of Richard M. Mosk, American Bell Int'l Inc. v. Iran, 6 Iran-U.S. C.T.R. 74, 95, 97–98 (1984 II) (“It might be that by virtue of Article V … the Tribunal can apply law other than that designated by the parties to the contract”).

39 Amoco Int'l Fin. Corp. v. Iran, 15 Iran-U.S. C.T.R. 189 (1987 II), summarized in 82 AJIL 358 (1988); and Mobil Oil Iran, Inc. v. Iran, AWD 311-74/76/81/150-3, I.A.L.R.July 24, 1987, at 14,534, summarized in 82 AJIL 136 (1988); both are discussed infra.

40 8 Iran-U.S. C.T.R. 144(1985 I).

41 And they have been. See Westberg, supra note 38, at 481.

42 Dissenting Opinion of Richard M. Mosk from Final Award, Harnischfeger Corp. v. Ministry of Roads & Transp., 8 Iran-U.S. C.T.R. 119, 134, 141 (1985 I). Accord Concurring Opinion of Richard M. Mosk, Oil Field of Texas, Inc. v. Iran, 1 Iran-U.S. C.T.R. 347, 363, 374 (1981–82). See also Mosk, The Role of Party-Appointed Arbitrators in International Arbitration: The Experience of the Iran-United States Claims Tribunal, 1 Transnat'l Law. 253 (1988).

43 Mobil Oil Iran, Inc. v. Iran, para. 81,I.A.L.R., July 24, 1987, at 14,543. Mobil involved an extraordinary contract, the Sale and Purchase Agreement between a consortium of Western oil companies and Iran, which the Tribunal concluded was governed for most purposes by “the general principles of commercial and international law.” Id.

44 See, e.g., Endo Laboratories v. Iran, AWD 325-366-3, I.A.L.R., Nov. 13, 1987, at 14,999; Exxon Corp. v. National Iranian Oil Co., AWD 322-154-3, I.A.L.R., Nov. 13, 1987, at 15,011; Parguin Private Joint Stock Co. v. United States, 13 Iran-U.S. C.T.R. 261 (1986IV); Oil Field of Texas, Inc. v. Iran, 12 Iran-U.S. C.T.R. 308 (1986 III); McLaughlin Enter., Ltd. v. Iran, id. at 146; Litton Sys., Inc. v. Iran (Claim 1), id. at 126; Columbia Univ. v. Iran, 10 Iran-U.S. C.T.R. 319 (1986 I); Lischem Corp. v. Atomic Energy Org., 7 Iran-U.S. C.T.R. 18, 22–23 (1984 III); Ram Int'l Indus., Inc. v. Iranian Air Force, 3 Iran-U.S. C.T.R. 203, 206 (1983 II); and Intrend Int'l, Inc. v. Imperial Iranian Air Force, id. at 110.

45 7 Iran-U.S. C.T.R. 181, 190–91 (1984 III).

46 Iran Nat'l Airlines v. United States, AWD 336-B-12-2, para. 7,1.A.L.R., Dec. 11, 1987, at 15,137, 15,139; accord Iran Nat'l Airlines v. United States, AWD 337-B-10-2, I.A.L.R., Dec. 11, 1987, at 15, 132.

47 11 Iran-U.S. C.T.R. 259 (1986 II).

48 11 Iran-U.S. C.T.R. 76 (1986 II).

49 The following cases are all complex, largely factual inquiries into contract performance, with the contract providing all or most of the controlling law: Houston Contracting Co. v. National Iranian Oil Co., AWD 378-173-3, I.A.L.R., Aug. 28, 1988, at 16,176; Minnesota Mining & Mfg. Co. v. Iran, AWD 343-423-3, I.A.L.R., Jan. 15, 1988, at 15,255; Bechtel, Inc. v.Iran, 14 Iran-U.S. C.T.R. 149(1987 I); Howard Needles Tammen&Bergendoff v. Iran, 11 Iran-U.S. C.T.R. 302 (1986 II); Computer Sciences Corp. v. Iran, 10 Iran-U.S. C.T.R. 269 (1986 I); Blount Bros. Corp. v. Ministry of Hous. & Urban Dev., 3 Iran-U.S. C.T.R. 225 (1983 II); Woodward-Clyde Consultants v. Iran, id. at 239; Warnecke & Assocs. v. Bank Mellat, id. at 256; Gruen Assocs., Inc. v. Iran Hous. Co., id. at 97.

50 See text at notes 84–92 infra.

51 2 Iran-U.S. C.T.R. 100, 106 (1983 I).

52 12 Iran-U.S. C.T.R. 170, 188 (1986 III). Accord Blount Bros. Corp. v. Ministry of Hous. & Urban Dev., 3 Iran-U.S. C.T.R. 225 (1983 II).

53 6 Iran-U.S. C.T.R. 149 (1984 II).

54 Id. at 175. Accord S.U.N.Y. v. Ministry of Culture (Case B71), 13 Iran-U.S. C.T.R. 277 (1986 IV).

55 9 Iran-U.S. C.T.R. 360 (1985 II).

56 12 Iran-U.S. C.T.R. 239 (1986 III).

57 Accord Logos Dev. Corp. v. Information Sys. Iran, 11 Iran-U.S. C.T.R. 53, 60–62 (1986 II); Computer Sciences Corp. v. Iran, 8 Iran-U.S. C.T.R. 99, 105 (1985 I).

58 See text at notes 74–83 infra.

59 I.A.L.R., July 24, 1987, at 14,534 (see note 39 supra).

60 14 Iran-U.S. C.T.R. 24, 38 (1987 I). Accord FMC Corp. v. Ministry of Nafl Defense, id. at 111, 121 (applying contractual provision authorizing termination for the convenience of the employer; contract authorized damages for lost anticipated profits).

61 14 Iran-U.S. C.T.R. 263 (1987 I) (Whittaker); and 15 Iran-U.S. C.T.R. 3 (1987 II) (Exxon).

62 AWD 323-409-1, I.A.L.R., Nov. 13, 1987, at 14,951.

63 Accord Ammann & Whitney v. Ministry of Hous. & Urban Dev., 12 Iran-U.S. C.T.R. 94, 103 (1986 III) (claimants pleaded breach, but the Tribunal found termination under force majeure clause of contract); Lauth v. Iran, 11 Iran-U.S. C.T.R. 150, 155 (1986 II) (parties' contract was terminated “through no fault of the claimant” and Tribunal “does not find it necessary to decide whether or not” the Iranian party breached).

64 3 Iran-U.S. C.T.R. 280 (1983 II). Accord William J. Levitt v. Iran, 14 Iran-U.S. C.T.R. 191, 209 (1987 I) (Tribunal finds breach by Iranian entity in a contract claim, and declares loss of profits “in principle” a proper element of damages for such breach; but lost profits claim rejected for failure to prove potential profitability of venture).

65 Carbonneau, The Elaboration of Substantive Legal Norms and Arbitral Adjudication: The Case of the Iran–United States Claims Tribunal, in Lillich, supra note 9, at 104, 105.

66 On the important role of general principles of law in past international arbitrations, see B. Cheng, General Principles of Law as Applied by International Courts and Tribunals (1953).

67 Ironically, in a rare case involving comparative analysis by both parties and the Tribunal, an uncharacteristically high threshold was applied in determining that the relevant legal proposition (that an arbitral award gives rise to an action in contract or tort) was not a “principle of commercial and international law” envisaged by Article V of the Claims Settlement Declaration. Arbitrator Holtzmann dissented. Bendone-DeRossi Int'l v. Iran, AWD 352-375-1, I.A.L.R., Mar. 25, 1988, at 15,578.

68 2 Iran-U.S. C.T.R. 100, 111 (1983 I).

69 2 Iran-U.S. C.T.R. 232 (1983 I).

70 Id. at 237.

71 6 Iran-U.S. C.T.R. 149, 168 (1984 II). Accord Schlegel Corp. v. National Iranian Copper Indus. Co., 14 Iran-U.S. C.T.R. 176, 180 (1987 I); Shannon & Wilson, Inc. v. Atomic Energy Org. of Iran, 9 Iran-U.S. C.T.R. 397, 402 (1985 II); Future Trading Inc. v. K.W.P.A., id. at 46, 57; Die of Delaware, Inc. v. Tehran Redev. Corp., 8 Iran-U.S. C.T.R. 144 (1985 I); and Morrison-Knudsen Pacific Ltd. v. Ministry of Roads & Transp., 7 Iran-U.S. C.T.R. 54, 76 (1984 III).

72 5 Iran-U.S. C.T.R. 160, 171–72 (1984 I). Earlier, Arbitrator Mosk had unsuccessfully pressed for the contrary view. Concurring Opinion of Richard M. Mosk, Chas. T. Main Int'l, Inc. v. Mahab Consulting Eng'rs, Inc., 3 Iran-U.S. C.T.R. 270, 277 (1983 II).

73 Lockheed Corp. v. Iran, AWD 367-829-2, I.A.L.R., June 24, 1988, at 15,887.

74 See text at note 58 supra.

75 See, e.g., Mobil Oil Iran, Inc. v. Iran, para. 117, I.A.L.R., July 24, 1987, at 14,547; Anaconda-Iran, Inc. v. Iran, 13 Iran-U.S. C.T.R. 199, 211 (1986 IV) (“Under a variety of names, most, if not all, legal systems recognize force majeure as an excuse for contractual non-performance. Force majeure therefore can be considered a general principle of law. … [T]he right to invoke force majeure does not depend on, or arise out of, an express contractual provision”).

76 3 Iran-U.S. C.T.R. 147 (1983 II) and 6 Iran-U.S. C.T.R. 272 (1984 II).

77 6 Iran-U.S. C.T.R. at 274.

78 9 Iran-U.S. C.T.R. 187 (1985 II).

79 14 Iran-U.S. C.T.R. 65 (1987 I).

80 9 Iran-U.S. C.T.R. 284 (1985 II).

81 8 Iran-U.S. C.T.R. 298, 309 (1985 I), summarized in 80 AJIL 365 (1986).

82 See Exxon Research & Eng'g Co. v. Iran, 15 Iran-U.S. C.T.R. 3 (1987 II); American Bell Int'l Inc. v. Iran, 12 Iran-U.S. C.T.R. at 187; International Technical Prod. Corp. v. Iran (final award), 9 Iran-U.S. C.T.R. 206 (1985 II) (inability of American technicians to work in Iran after November 1979 not force majeure excusing Iranian nonperformance). Cf. Amoco Int'l Fin. Corp. v. Iran, 15 Iran-U.S. C.T.R. 189 (1987 II) (application of contract standard establishing consequences of force majeure).

85 Blount Bros. Corp. v. Iran, 10 Iran-U.S. C.T.R. 56, 75 (1986 I); compare Czarnikow Ltd. v. Rolimpex, 1979 App. Cas. 351 (same result).

84 General Dynamics Corp. v. Iran, 5 Iran-U.S. C.T.R. 386, 398 (1984 I).

85 CBA Int'l Dev. Corp. v. Iran, 5 Iran-U.S. C.T.R. 177, 180 (1984 I).

86 First Travel Corp. v. Iran, 9 Iran-U.S. C.T.R. 360, 371 (1985 II).

87 13 Iran-U.S. C.T.R. 99 (1986 IV). Accord Iowa State Univ. v. Ministry of Culture, 13 Iran-U.S. C.T.R. 271, 273–75 (1986 IV) (Tribunal finds a contract to pay a student's tuition); Litton Sys., Inc. v. Iran, 12 Iran-U.S. C.T.R. 126, 134 (1986 III) (“In the absence of a formal written contract, the mutual obligations of the parties have to be determined largely by reference to their past course of dealings”); Cal-Maine Foods, Inc. v. Iran, 6 Iran-U.S. C.T.R. 52, 61–62 (1984 II) (Tribunal finds a contract for the sale of shares); Chas. T. Main Int'l, Inc. v. Khuzestan Water & Power Auth., 3 Iran-U.S. C.T.R. 156, 162 (1983 II).

88 It is not clear what the Chamber took to be the source of the legal authority of this maxim for purposes of Article V. Civil law maxims have been cited occasionally as authority in arguments, opinions and awards. See, e.g., Dissenting and Concurring Opinion of Parviz Ansari as to the Interim and Interlocutory Award in Case No. 395, 8 Iran-U.S. C.T.R. 216, 228, 231 (1985 I) (A rubra ad nigrum). However, Futura Trading is the only case in which such a maxim determined the outcome.

89 2 Iran-U.S. C.T.R. 334, 339 (1983 I).

90 R. N. Pomeroy v. Iran, 2 Iran-U.S. C.T.R. 372, 380 (1983 I); and Pomeroy Corp. v. Iran, id. at 391, 397. Accord Pepsico, Inc. v. Iran, 13 Iran-U.S. C.T.R. 3, 33 (1986 IV) (any technical defects in the execution of loan documents overcome by respondent's receipt and enjoyment of the loan proceeds); Die of Delaware, Inc. v. Tehran Redev. Corp., 8 Iran-U.S. C.T.R. 144, 161 (1985 I) (part performance of an oral contract as evidence of its existence “must be taken to constitute a general principle oflaw”); United States v. Iran (Case B29), 6 Iran-U.S. C.T.R. 12, 17 (1984 II) (“The only reasonable inference … is that an agreement was concluded between the Parties, and that both Parties manifested their assent to the agreement by their subsequent performances …”); Chas. T. Main Int'l, Inc. v. Khuzestan Water & Power Auth., 3 Iran-U.S. C.T.R. 156, 162 (1983 II) (“An invitation to commence preliminary work creates an obligation to pay for that work”). Cf. Uiterwyck Corp. v. Iran, AWD 375-381-1, I.A.L.R., July 6, 1988, at 16,095 (parties' course of conduct creates an agency relationship between them, apparently under Florida law).

91 8 Iran-U.S. C.T.R. 119, 133 (1985 I).

92 Die of Delaware, 8 Iran-U.S. C.T.R. at 164; Morrison-Knudsen Pacific Ltd. v. Ministry of Roads & Transp., 7 Iran-U.S. C.T.R. 54, 75 (1984 III).

93 4 Iran-U.S. C.T.R. 212, 221 (1983 III). Accord Houston Contracting Co. v. National Iranian Oil Co., para. 73, I.A.L.R., Aug. 28, 1988, at 16,176, 16,185; Time, Inc. v. Iran, 7 Iran-U.S. C.T.R. 8, 11 (1984 III); and General Dynamics Corp. v. Iran, 5 Iran-U.S. C.T.R. 386, 394–95 (1984 1).

94 7 Iran-U.S. C.T.R. 181, 190–91 (1984 III).

95 3 Iran-U.S. C.T.R. 42, 48 (1983 II). For unpersuasive criticism of Economy Forms, see Chen, The Iran-U.S. Claims Tribunal's Application of Commercial Law in the Economy Forms Award, 4 Chinese Y.B. Int'l L. & Aff. 137 (1984).

96 7 Iran-U.S. C.T.R. 90, 99 (1984 III). Accord Uiterwyck Corp. v. Iran, para. 64, I.A.L.R., July 6, 1988, at 16,095, 16,102 (U.S. agency law governs an agency relationship constituted and performed in the United States); Queens Office Tower Assocs. v. Iran Nat'l Airlines Corp., 2 Iran-U.S. C.T.R. 247, 250 (1983 1) (New York law governs New York real estate transaction).

97 Schering Corp. v. Iran, 5 Iran-U.S. C.T.R. 361, 373 (1984 I).

98 Chas. T. Main Int'l, Inc. v. Mahab Consulting Eng'rs, Inc., 3 Iran-U.S. C.T.R. 270, 274 (1983 II); but cf. Schlegel Corp. v. National Iranian Copper Indus. Co., 14 Iran-U.S. C.T.R. 176, 183 (1987 I) (subcontractor's claim for unjust enrichment allowed against prime contractor's principal).

99 American Bell Int'l Inc. v. Iran, 6 Iran-U.S. C.T.R. 74, 90 (1984 II).

100 Tippetts, Abbett, McCarthy, Stratton v. TAMS-AFFA, 6 Iran-U.S. C.T.R. 219, 228 (1984 II).

101 Arthur Young & Co. v. Iran, AWD 338-484-1, para. 78, I.A.L.R., Dec. 28, 1987, at 15,178, 15,191. Cf. Aeronutronic Overseas Servs., Inc. v. Iran, 11 Iran-U.S. C.T.R. 223, 245 (1986 II); Computer Sciences Corp. v. Iran, 10 Iran-U.S. C.T.R. 269, 287 (1986 I); T.C.S.B., Inc. v. Iran, 5 Iran-U.S. C.T.R. 160, 174 (1984 I).

102 Parguin Private Joint Stock Co. v. United States, 13 Iran-U.S. C.T.R. 261, 268 (1986 IV); McCollough & Co., Inc. v. Ministry of Post, Tel. & Tel., 11 Iran-U.S. C.T.R. 3, 26–30 (1986 II); R.J. Reynolds Tobacco Co. v. Iran (final award), 8 Iran-U.S. C.T.R. 55, 60–61 (1985 I).

103 American Bell Int'l Inc. v. Iran, 12 Iran-U.S. C.T.R. 170, 175 (1986 III).

104 Blount Bros. Corp. v. Iran, 10 Iran-U.S. C.T.R. 95, 101 (1986 I).

105 Questech, Inc. v. Ministry of Nat'l Defense, 9 Iran-U.S. C.T.R. 107 (1985 II) (see note 22 supra).

106 Compare B. Cheng, supra note 66, at xiv: “If … the general principles of law are not to run the risk of being exploited as an ideological cloak for self-interest, it is essential that their scope and substance be clearly defined and understood.”

107 Stein, Jurisprudence and Jurists' Prudence: The Iranian-Forum Clause Decisions of the Iran-U.S. Claims Tribunal, 78 AJIL 1 (1984).

108 See note 12 supra. On the meaning of the “Majlis position,” see Stein, supra note 107, at 5–6.

109 See Berglin, Treaty Interpretations and the Impact of Contractual Choice of Forum Clauses on the Jurisdiction of International Tribunals: The Iranian Forum Clause Decisions of the Iran–United States Claims Tribunal, 21 Tex. Int'l L.J. 39 (1985); Lowenfeld, The Iran–United States Claims Tribunal: An Interim Appraisal, in Lillich, supra note 9, at 81; Stein, supra note 107, at 51–52.

110 Stein, supra note 107, at 12 (quoting Halliburton Co. v. Doreen/Imco, 1 Iran-U.S. C.T.R. 242, 245(1981–82)).

111 Id. at 16.

112 Oil Field of Texas, Inc. v. Iran, 1 Iran-U.S. C.T.R. 347, 361 (1981–82).

113 Art. 11(1), Claims Settlement Declaration, supra note 12.

114 For the view that the Tribunal is an exercise in diplomatic protection, see, e.g., Dissenting Opinion of Member Mahmoud M. Kashani Regarding Order of 15 December 1982, 1 Iran-U.S. C.T.R. 455, 463, 465 (1981–82). The Tribunal has consistently rejected contentions that claims have been espoused (see, e.g., Iran v. United States (Case A21), 14 Iran-U.S. C.T.R. 324, 330 (1987 I)), or that claimants must exhaust local remedies (see, e.g., Amoco Int'l Fin. Corp v. Iran, 15 Iran-U.S. C.T.R. 189, 197 (1987 II)). It has similarly refused to characterize the small claims (which are “presented” by the two Governments) as exercises in diplomatic protection. See Picker Int'l Corp. v. Iran (decision on request for correction), 12 Iran-U.S. C.T.R. 306 (1986 III); and Noah A. Baygell v. Iran (same), 11 Iran-U.S. C.T.R. 300 (1986 II). The Tribunal has been urged to articulate clearly which legal system it is operating in when rendering particular decisions. Lloyd Jones, The Iran–United States Claims Tribunal: Private Rights and State Responsibility, in Lillich, supra note 9, at 51. It has not consistently done so. See, e.g., Iran v. United States (Case Bl), 10 Iran-U.S. C.T.R. 207, 216 (1986 I).

115 See, e.g., Brower, Current Developments in the Law of Expropriation and Compensation: A Preliminary Survey of Awards of the Iran–United States Claims Tribunal, 21 Int'l Law. 639 (1987) (the author was a member of the Tribunal, 1984–1988); Clagett,/uK Compensation in International Law: The Issues Before the Iran–United States Claims Tribunal, in 4 The Valuation of Nationalized Property in International Law 31 (R. Lillich ed. 1987); Clagett, Protection of Foreign Investment Under the Revised Restatement, 25 Va. J. Int'l L. 73, 79 (1984); and the summaries of the Amoco, INA and SEDCO cases in 82 AJIL 358 (1988), 80 AJIL 181 (1986) and id. at 969, respectively.

116 Treaty of Amity, Economic Relations, and Consular Rights, Aug. 15, 1955, 8 UST 899, TIAS No. 3853, 284 UNTS 93. Article IV of the Treaty provides, inter alia, that in cases of expropriation, there shall be “just compensation,” which shall be “in an effectively realizable form and shall represent the full equivalent of the property taken.”

117 United States Diplomatic and Consular Staff in Tehran (U.S. v. Iran), 1980 ICJ Rep. 3, 28 (Judgment of May 24).

118 Chamber Two found that customary international law required full value in Tippetts, Abbett, McCarthy, Stratton v. TAMS-AFFA, 6 Iran-U.S. C.T.R. 219, 225 (1984 II) (“The claimant is entitled under international law and general principles of law to compensation for the full value of the property of which it was deprived”). Chamber Three did so in 1983 in American Int'l Group, Inc. v. Iran, 4 Iran-U.S. C.T.R. 96, 105, 109 (1983 III) (standard of compensation under customary international law in cases of lawful expropriation is the full value of the claimant's expropriated interest, determined on the basis of going-concern value). Judge Lagergren's Chamber One, in Starrett Hous. Corp. v. Iran, 4 Iran-U.S. C.T.R. 122, 157 (1983 III), deferred consideration of the standard of compensation for later proceedings in the case.

119 8 Iran-U.S. C.T.R. 373, 378–79 (1985 I), summarized in 80 AJIL 181 (1986).

120 Dissenting Opinion of Judge Ameli, 8 Iran-U.S. C.T.R. at 403. Ameli maintained that the International Court of Justice had exclusive jurisdiction to pass upon claims arising under the Treaty, declaring that in that forum, “the United States … would be forced to abide by the rulings of the Judges with whose countries it has been in ideological war.” Id. at 405.

121 Separate Opinion of Judge Lagergren, 8 Iran-U.S. C.T.R. at 385. Ameli joined in Lagergren's opinion. Id. at 385 (declaration), 403 (diss. op.).

122 Separate Opinion of Judge Holtzmann, 8 Iran-U.S. C.T.R. at 391.

123 See, e.g., Starrett Hous. Corp. v. Iran, AWD 314-24-1, para. 261, I.A.L.R., Aug. 28, 1987, at 14,657, 14,687 (applying only treaty standard); Mobil Oil Sales Iran, Inc. v. Iran, para. 74, I.A.L.R., July 24, 1987, at 14,542 (applying treaty standard); Amoco Int'l Fin. Corp., 15 Iran-U.S. C.T.R. at 223, 246–48 (treaty standard and customary international law both require “just” compensation, which at a minimum reflects the full value or full equivalent of the expropriated property); Sola Tiles, Inc. v. Iran, 14 Iran-U.S. C.T.R. 223, 234 (1987 I) (“the same standard [of compensation] would be required in this case by customary law as by the direct application of the Treaty itself”); Sedco, Inc. v. N.I.O.C, 10 Iran-U.S. C.T.R. 180, 184, 187 (1986 I) (both treaty and customary law require full compensation in cases of lawful expropriations); Phelps Dodge Corp. v. Iran, 10 Iran-U.S. C.T.R. 121, 132 (1986 I) (treaty requires full compensation; customary law not discussed).

124 Starrett Hous. Corp. v. Iran, I.A.L.R., Aug. 28, 1987, at 14,657; INA Corp. v. Iran, 8 Iran-U.S. C.T.R. 373 (1985 I) (see note 119 supra).

125 See cases cited in notes 118 and 123 supra.

126 I.A.L.R., Aug. 28, 1987, at 14,657.

127 See Concurring Opinion of Judge Holtzmann, id. at 14,703, 14,704–05.

128 Sola Tiles, Inc. v. Iran, 14 Iran-U.S. C.T.R. 223 (1987 I). Sola Tiles includes an interesting discussion of the meaning of “appropriate compensation” in light of contemporary developments such as the 1986 Seoul Declaration of the International Law Association. (See Declaration on the Progressive Development of Principles of Public International Law Relating to a New International Economic Order, International Law Association, Report of the Sixty-second Conference Held at Seoul 2, para. 5.5 (1986).) The Chamber concluded that under modern customary law, appropriate compensation can include full going-concern value, including good will and lost future profits.

129 10 Iran-U.S. C.T.R. 121 (1986 I).

130 12 Iran-U.S. C.T.R. 3 (1986 III).

131 15 Iran-U.S. C.T.R. 189 (1987 II).

132 Factory at Chorzów (Ger. v. Pol.), 1928 PCIJ (ser. A) No. 17 (Judgment of Sept. 13).

139 Amoco Int'l Fin. Corp., 15 Iran-U.S. C.T.R. at 258–65.

134 See the AJIL case note on Amoco, supra note 39, at 361.

135 15 Iran-U.S. C.T.R. 23 (1987 II).

136 Arbitrator Brower questioned the finding of a new agreement to terminate, observing that “[a]n unwanted but inevitable fate is no less unilaterally imposed by virtue of its being gracefully accepted.” Concurring Opinion of Judge Brower, Mobil Oil Iran, Inc. v. Iran, I.A.L.R., July 24, 1987, at 14,534, 14,554, para. 2.

137 AWD 378-173-3,1.A.L.R., Aug. 26, 1988, at 16,176.

138 AWD 373-481-3, I.A.L.R., July 29, 1988, at 16,043; id., Concurring and Dissenting Opinion of Judge Brower, id. at 16,050, 16,050.

139 AWD 329-227/12384-3, I.A.L.R., Dec. 11, 1987, at 15,156.

140 For U.S. domestic purposes, the accords are executive agreements resting upon the President's powers under the Constitution, the International Emergency Economic Powers Act and other statutes. See explanatory statements of the U.S. Department of State, Hostage Agreements Transmitted to Congress, U.S. Dep't of State, Selected Documents, NO. 19, March 1981, at 2.

141 Declaration of the Government of the Democratic and Popular Republic of Algeria, Jan. 19, 1981, Dep't St. Bull., NO. 2047, February 1981, at 1, reprinted in 75 AJIL 418 (1981), and 20 ILM 224 (1981).

142 See note 12 supra.

143 Opened for signature May 23, 1969, 1155 UNTS 331, reprinted in 63 AJIL 875 (1969), and 8 ILM 679 (1969). The Convention is not in force between the United States and Iran, but it is viewed by the United States as being generally declaratory of customary international law.

144 See, e.g., Separate Opinion of Members Aldrich, Holtzmann and Mosk on the Issue of the Disposition of Interest Earned on the Security Account, Iran v. United States (Case Al, Issues I, III & IV), 1 Iran-U.S. C.T.R. 200 (1981–82).

145 International Schools Servs., Inc. v. National Iranian Copper Indus. Co., 5 Iran-U.S. C.T.R. 338, 341 (1984 I). Accord Iran v. United States (Case Bl, Claim 4), AWD 382–B1–FT, para. 47, I.A.L.R., Sept. 23, 1988, at 16,343, 16,354; Iran v. United States (Case A21), 14 Iran-U.S. C.T.R. 324, 328 (1987 I); Iran Customs Admin, v. United States (Case B3), 8 Iran-U.S. C.T.R. 89, 92 (1985 I); Iran Customs Admin, v. United States (Case B21), id. at 93, 95; United States v. Iran (Case A16), 5 Iran-U.S. C.T.R. 57, 67 (1984 I) (“ordinary meaning of the term in its context and in the light of the object and purpose”). Article 31(1) of the Vienna Convention provides that treaties “shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in light of its object and purpose.”

146 See, e.g., Opinion of Members Dr. Mahmoud M. Kashani and Dr. Shane Shafeiei on the Issue of Disposition of Interest Earned on the Security Account, 1 Iran-U.S. C.T.R. 189, 203, 210 (1981–82) (“The process of interpretation starts with the search for the common intention of the contracting parties”).

147 2 Iran-U.S. C.T.R. 157 (1983 I), summarized in 77 AJIL 646 (1983).

148 Iran v. United States (Case A18), 5 Iran-U.S. C.T.R. 251 (1984 I), noted 26 Harv. Int'l LJ. 208 (1985), 83 Mich. L. Rev. 597 (1984), and 24 Va. J. Int'l L. 695 (1984).

149 Iran v. United States (Case A21), 14 Iran-U.S. C.T.R. 324 (1987 I).

150 Id. at 330–31. For other resorts to the Vienna Convention, see, e.g., Amoco Int'l Fin. Corp., 15 Iran-U.S. C.T.R. at 221 (Art. 32 on “manifestly absurd or unreasonable” interpretations), 215 (Arts. 49, 51 and 52 on duress and fraud), 216 (Art. 53 on jus cogens and Art. 62 on fundamental change of circumstances), and 217–19 (also addressing treaty termination under customary law); McCollough & Co., Inc. v. Ministry of Posts, Tel. & Tel., 11 Iran-U.S. C.T.R. 3, 8–9, 36 (1986 II) (Art. 33 and construction of texts in different languages); Phillips Petroleum Co., Iran v. Iran, 1 Iran-U.S. C.T.R. 487, 489 (1981–82) (Art. 47 on restrictions on the authority of states' representatives).

151 Iran v. United States (Case A2), 1 Iran-U.S. C.T.R. 101, 104 (1981–82).

152 2 Iran-U.S. C.T.R. 78 (1983 I), summarized in 77 AJIL 649 (1983).

153 2 Iran-U.S. C.T.R. at 79.

152 Id. at 80.

155 Id. at 81.

156 Iranian Customs Admin, v. United States (Case B16), 5 Iran-U.S. C.T.R. 94,95 (19841); United States v. Iran (Case B24), id. at 97, 99 (“It is a well established principle of international law that provisions conferring jurisdiction upon an arbitral tribunal shall be interpreted in a restrictive manner”).

157 Iran v. United States (Case Al, Issue I), 1 Iran-U.S. C.T.R. 189, 192 (1981–82) (citing A. Mcnair, The Law of Treaties 765 (1961)).

158 Concurring Opinion of Charles N. Brower, in which Howard M. Holtzmann Joins, United States v. Iran (Case A17), 8 Iran-U.S. C.T.R. 189, 206, 207 (1985 I).

159 Iran v. United States, 1 Iran-U.S. C.T.R. at 190.

160 Id. at 191–92.

161 Dissenting Opinion of President Lagergren on the Issue of the Disposition of Interest Earned on the Security Account, 1 Iran-U.S. C.T.R. 197 (1981–82). The American arbitrators found yet another answer in the ordinary meaning of the texts. Separate Opinion of Members Aldrich, Holtzmann and Mosk on the Issue of the Disposition of Interest Earned on the Security Account, 1 Iran-U.S. C.T.R. 200.

162 United States v. Iran (Case A17), 8 Iran-U.S. C.T.R. 189, 200 (1985 I).

163 Iran v. United States (Case A15, pt. I:G), 12 Iran-U.S. C.T.R. 40, 54 (1986 III), summarized in 81 AJIL 428 (1987).

164 Iran v. United States (Case Bl, Claim 4), para. 66, I.A.L.R., Sept. 23, 1988, at 16,343, 16,359. Arbitrator Holtzmann dissented, criticizing what he saw to be “the Majority's needless stretching and twisting of the terms of the General Declaration in an effort to find an implied treaty obligation.” Id. at 16,364.

165 See, e.g., Grune & Stratton, Inc. v. Iran, AWD 359-10059-1,1.A.L.R., Apr. 29, 1988, at 15,710; Scott, Foresman & Co. v. Iran, AWD 313-10712-1, I.A.L.R., Aug. 14, 1987, at 14,582.

166 See Gold, The Iran–United States Claims Tribunal and the Articles of Agreement of the International Monetary Fund, 18 Geo. Wash. J. Int'l L. & Econ. 537 (1985).

167 3 Iran-U.S. C.T.R. 10 (1983 II). Arbitrator Holtzmann dissented. Id. at 17.

168 5 Iran-U.S. C.T.R. 361 (1984 I).

169 7 Iran-U.S. C.T.R. 36 (1984 III).

170 Id. at 52.

171 International Technical Prod. Corp. v. Iran (partial award), 9 Iran-U.S. C.T.R. 10, 17–18 (1985 11).

172 See Straus, Causation as an Element of State Responsibility, 16 Law & Pol'y Int'l Bus. 893 (1984).

173 AWD 324-10199-1, I.A.L.R., Nov. 13, 1987, at 14,991, summarized in 82 AJIL 353 (1988).

174 Yeager, paras. 35–45, I.A.L.R., Nov. 13, 1987, at 14,994–95.

175 AWD 312-11135-3, I.A.L.R., July 24, 1987, at 14,560, summarized in 82 AJIL 140 (1988).

176 Short, I.A.L.R., July 24, 1987, at 14,563.

177 AWD 326-10913-2, I.A.L.R., Nov. 3, 1987, at 15,004, summarized in 82 AJIL 353 (1988).

178 See AJIL case note, supra note 173, at 357.

179 See text at note 148 supra.

180 See, e.g., Eastman Kodak Co. v. Iran, I.A.L.R., Dec. 11, 1987, at 15,156; International Sys. & Controls Corp. v. I.D.R.O., 12 Iran-U.S. C.T.R. 239 (1986 III); Management of Alcan Aluminum Ltd. v. Ircable Co., 2 Iran-U.S. C.T.R. 294, 297–98 (1983 I); Concurring and Dissenting Opinion of Richard M. Mosk, RayGo Wagner Equip. Co. v. Iran Express Terminal Corp., id. at 140, 146.

181 Oil Field of Texas v. Iran, 1 Iran-U.S. C.T.R. 363 (1981–82).

182 See, e.g., McCollough & Co., Inc. v. Ministry of Post, Tel. & Tel., 11 Iran-U.S. C.T.R. 3, 27 (1986 II); Sylvania Technical Sys., Inc. v. Iran, 8 Iran-U.S. C.T.R. 298, 320–22 (1985 I); R.J. Reynolds Tobacco Co. v. Iran, 7 Iran-U.S. C.T.R. 181, 191 (1984 III).

183 See, e.g., Yeager, Short and Rankin, the three expulsion test cases, text at notes 173–77 supra; Sea-Land Serv., Inc. v. Iran, 6 Iran-U.S. C.T.R. 149, 166, 201–03 (1984 II); Concurring Opinion of Howard M. Holtzmann, Starrett Hous. Corp. v. Iran, 4 Iran-U.S. C.T.R. 122, 159, 165–73 (1983 III); Gould Marketing, Inc. v. Ministry of Nat'l Defense, 3 Iran-U.S. C.T.R. 147, 153(1983 II).

184 Housing & Urban Servs. Int'l v. Iran, 9 Iran-U.S. C.T.R. 313, 330 (1985 II); Note, Partnership Claims before the Iran–United States Claims Tribunal, 27 VA. J. Int'l L. 307 (1987).

185 Mann, The Aminoil Arbitration, 54 Brit. Y.B. Int'l L. 213, 214 (1983). Accord Yates, Arbitration or Court Litigation for Private International Dispute Resolution: The Lesser of Two Evils, in Carbonneau, supra note 2, at 230.

186 But cf. Branson & Wallace, Choosing the Substantive Law to Apply in International Commercial Arbitration, 27 Va. J. Int'l L. 39 (1986) (urging inclusion of contractual choice-of-law clauses “in order to secure a neutral and predictable standard for resolving disputes”).

187 United Nations Convention on Contracts for the International Sale of Goods, opened for signature Apr. 11, 1980, UN Doc. A/CONF.97/18 (1980), 52 Fed. Reg. 6262 (1987), reprinted in 19 ILM 671 (1980).

188 See note 32 supra.