Iran-United States Claims Tribunal

The present article will discuss the issue of compensation in cases of expropriation and nationalization in the light of the Iran-United States Claims Tribunal. It is a well recognized rule in international law that the property of alien cannot be taken without appropriate compensation. But, the standard of compensation for expropriated private property has been the subject of controversy between Western and developing countries since the end of World War II. In alters woads, the standard to be applied in determining compensation remained a controversial issue at a theoretical level. The main argument has been whether the traditional standard of full compensation is a general rule of law applicable in all cases. In this article, awards of the Iran-US Claims Tribunal have been wseof in an attempt to show that the prevailed rules defy any conclusion that full compensation must be paid in all cases when foreign property is taken by the State.

This article aims to address theoretical and practical issues arising from the author’s "lived experience" in dealing with the developments and intricacies of international arbitration, with a particular focus on experiences related to the Iran-United States Claims Tribunal. These discussions are presented in two parts. The first part consists of general observations that emphasize, on the one hand, the unique importance of the Tribunal in contributing to the maintenance of international peace and security through the peaceful resolution of disputes between two predominantly adversarial states. The Tribunal is referred to as a symbolic institution embodying the "ideal of arbitration for peace." On the other hand, this section highlights the hybrid and multifaceted nature of the Tribunal and its manifestations, noting that the Iran-United States Claims Tribunal is a multifunctional institution. It simultaneously serves as an international commercial arbitration tribunal, an international investment arbitration tribunal, a tribunal with jurisdiction over contractual disputes between two states, and a public international law tribunal. This multifaceted nature allows its awards to be examined from various perspectives. The second part primarily examines the Tribunal’s jurisprudence from the perspective of the interaction between distinct legal cultures involved in international arbitration and the mutual influence of their legal backgrounds on the arbitration process. This selection is made with consideration of the judicial issues prevalent in Iran and seeks to highlight the Tribunal’s unparalleled role in deepening the legal knowledge and practical skills of Iranian lawyers in dealing with international claims. In this regard, issues such as the non-requirement of power of attorney for legal representatives, the admissibility of written witness testimony (affidavit) by the parties, the submission of written witness testimony and oral testimony by individuals with a personal interest in the case or a master-servant relationship with the parties, the ability to cross-examine witnesses during hearings regarding the content and veracity of their testimony, and the standard applied by the Tribunal for meeting the burden of proof and the burden of production are all examined in light of the Tribunal’s various rulings.

The Iran-United States Claims Tribunal (IUSCT), throughout its operation, has successfully resolved a significant number of claims and disputes—including claims by nationals against the state and state-to-state disputes—within the sensitive legal and complex political milieus between Iran and the United States. Nevertheless, the Tribunal’s role in the international arena extends beyond this inter-state dimension: its awards and decisions, as widely acknowledged, have played a significant role in the development of law on a global scale, particularly in international arbitration, international investment, and international commercial law. A structured, analytical, and methodological study of the Tribunal’s impact on the development of law in the international arena necessitates an examination of its awards and decisions across various legal fields. These include contract law, international commercial law, and international law—particularly international investment law. The first step in such a study is to assess the status of the Tribunal’s awards and decisions in the international arena, particularly their precedential value, in order to ascertain the reasons for and mechanisms behind their influence on the development of law globally. This article, while clarifying that the awards and judgments of international courts and tribunals—including the IUSCT—are not generally binding precedent, seeks to demonstrate that these decisions may nevertheless serve as persuasive authority relied upon by other arbitral and judicial bodies on both procedural and substantive matters. The criteria for evaluating the nature and extent of this persuasive value are analyzed in this study. It is argued that the Tribunal’s rulings, as decisions rendered on diverse subject matters within the legal framework applicable to various other international commercial or investment disputes—and issued by an international claims tribunal with established external credibility and consistent internal jurisprudence— carry significant persuasive precedential value in the international arena.

bodies in history. The arbitrators of this institution have referred to general principles of law, citing Article 5 of the Claims Settlement Declaration, in various cases for decision-making. Among the general principles of law, if not the most important, undoubtedly one of the most important principles is the principle of good faith. This principle plays a significant role in ensuring justice and fair adjudication. The present study, using library and documentary sources and a descriptive-analytical method, examines the role and status of the principle of good faith in the Iran-United States Claims Tribunal. The research findings show that the tribunal, recognizing the importance and role of the principle of good faith in ensuring justice and fair adjudication, has referred to and established a bridge between the two legal systems of Iran and the United States in various procedural and substantive instances. The principle of good faith has played an important role in the tribunal.

The resignation of an arbitrator constitutes one of the grounds for the termination of an arbitrator’s mandate, as provided for in most national arbitration laws and institutional arbitration rules. However, the legal dimensions and implications of such resignation- including its effects on the parties’ rights and the arbitral proceedings- may vary depending on the arbitrator’s motives for resigning and the justifiability (or lack thereof) of those motives. For instance, the acceptance of a resignation, the method of appointing a substitute arbitrator, the possibility of continuing proceedings before a truncated tribunal (i.e., without replacing the resigning arbitrator), and even the arbitrator’s potential civil liability may be subject to differing legal determinations based on whether the resignation is deemed justified. Domestic and international arbitration laws and rules have addressed arbitrator resignations through divergent approaches, often focusing solely on the replacement of the arbitrator while neglecting broader legal and ethical challenges. These challenges include the permissibility of resignation, its acceptance, its impact on the continuation of proceedings, and the prevention of its abuse. The unique characteristics of the Iran-U.S. Claims Tribunal have rendered the issue of arbitrator resignation particularly significant within its framework. Notable in this regard are the Tribunal’s jurisprudence and its modifications to the UNCITRAL Arbitration Rules- aimed at mitigating procedural delays arising from resignations. One of the most consequential procedural rules derived from the Tribunal’s experience is the addition of Paragraph 5 to Article 13 of the UNCITRAL Rules, which imposes an obligation on the resigning arbitrator to continue participating in proceedings (post-resignation) in cases where they have already taken part in the merits hearing. This provision, known as the Mosk Rule, has introduced a distinctive mechanism to safeguard procedural integrity. This article examines the rationale behind the Mosk Rule, its legal effects in light of general principles governing arbitrator resignation and replacement, its implications on the parties’ rights, the imperative of ensuring fair and equitable proceedings, and the preservation of arbitration’s legitimacy and credibility. Furthermore, the study proposes measures to deter unjustified resignations and mitigate their adverse impact on arbitral proceedings.

The principle of full compensation for damages is an accepted tenet in law, requiring that all damages incurred by the injured party be compensated. This study examines the methods of contractual compensation in the Iran-United States Claims Tribunal. First, the concept of the principle of contractual compensation and its conditions are discussed in various conventions and international legal documents. Given that the Tribunal represents one of the largest case- specific international arbitrations, its opinions and rulings can significantly influence or, at the very least, elucidate the practical aspects of arbitration within the realm of international law. This paper presents the rulings of the Tribunal, with a focus on decisions related to contract termination, reasonable compensation, and outstanding invoices. The findings indicate that in most cases, the Tribunal has awarded interest for damages and has followed a monetary approach to compensation.