IRAN-UNITED STATES CLAIMS ARBITRATION

The Iran-United States Claims Tribunal came into being under the Algiers Accords executed and ratified by Iran and the United States of America on 19 January 1981. The international document that serves as the instrument governing the status of the Tribunal is denominated “Claims Settlement Declaration” (the “CSD”). Following the victory of the Islamic Revolution in the mid-February of 1979, the dramatic deterioration of the relationship between Iran and the United States began to intensify. On 4 November 1979, the U.S. Embassy in Tehran was seized by a number of students supporting the cause of the Revolution. Their action received enthusiastic support in mass demonstrations, not failing to receive also the approval by the Leader of the Revolution and a number of official authorities. The detainment of 52 members of the Embassy staff, as hostages, was also a consequence of this event. On 14 November 1979, in the aftermath of the seizure of the United States Embassy in Tehran, the President of the United States issued Executive Order No. 12170, which blocked the transfer of all Iranian assets within the jurisdic-tion of the United States or being in the possession or con-trol of persons subject to the jurisdiction of the United States. Subsequently, the United States Department of the Treasury issued a series of “Iranian Assets Control Regula-tions” implementing the Executive Order No. 12170 (31 C.F.R. Part 535). Section 535.504 of the Regulations, as amended on 4 December 1979, authorized judicial proceedings against Iran and Section 535.418 of 19 December 1979 clarified that the general authorization for such judicial proceedings included “pre-judgment attachment.” Later, United States nationals filed hundreds of claims against Iran in United States and foreign courts. In many of these cases, the claimants obtained judicial attachments on Iranian assets that had already been blocked and frozen by the United States President’s Executive Order. The hostage crisis lasted for 444 days. In the fall of 1980, Iran and the United States initiated negotiations, through Algerian intermediaries, with a view to resolving the crisis between the two countries. In this regard, the preamble of the Declaration one reads as follows: The Government of the Democratic and Popular Re-public of Algeria, having been requested by the Govern-ments of the Islamic Republic of Iran and the United States of America to serve as an intermediary in seeking a mutually acceptable resolution of the crisis in their rela-tions arising out of the detention of the 52 United States nationals in Iran, has consulted extensively with the two governments as to the commitments which each is willing to make in order to resolve the crisis within the frame-work of the four points stated in the Resolution of No-vember 2, 1980, of the Islamic Consultative Assembly of Iran. On the basis of formal adherences received from Iran and the United States, the Government of Algeria now declares that the following interdependent commit-ments have been made by the two governments … Iran’s conditions for resolving the crisis were formulated by the Majlis, the Iranian Parliament, on 2 November 1980, in a Resolution stating Iran’s position concerning the release of the members of the United States diplomatic staff detained in the Embassy campus in Tehran. This Resolution constituted the basis of the Iranian position throughout the negotiations. The third of the conditions enumerated in the Resolution refers to litigious questions at hand before United States judicial instances. The Majlis requested: The cancellation and annulment of all economic and fiscal decisions and measures against the Islamic Republic of Iran, the implementation of all requisite administrative and legal measures for the cancellation and annulment of all claims of any sort or kind of the American government and American agencies and companies against Iran, the implementation of all requisite administrative and legal measures to ensure that no new legal, penal, or financial claim of any kind be raised by any official or non-official natural or juridical persons of the American government and/or by American agencies and companies. And, should any claim be raised in any court against Iran and Iranian nationals in connection with the Iranian Islamic revolution, the seizure of the American conspiracy center, and those arrested therein, and a decision against Iran or Iranian nationals be rendered, the American government undertakes and guarantees to be answerable therefor and undertakes and guarantees to pay the damages and reparations arising therefrom. [Quoted in Award No. 590 (28 Dec. 1998) In response, the United States declared itself to be pre-pared to establish, with the Government of Iran, a legal ap-paratus which would lead to the resolution of all claims and litigation asserted by U.S. nationals, including U.S. compa-nies, and by agencies, instrumentalities and controlled enti-ties of the U.S. Government against Iran. On 19 January 1981, Iran and the United States adhered to the Algiers Declarations: the General Declaration and the Claims Settlement Declaration. Article I of the Claims Set-tlement Declaration provides: Iran and the United States will promote the settlement of the claims described in Article II by the parties directly concerned. Any such claims not settled within six months from the date of entry into force of this Agreement shall be submitted to binding third-party arbitration in accordance with the terms of this Agreement. The aforementioned six months’ period may be extended once by three months at the request of either party.