The Iran-United States Claims Tribunal came into existence as one of the measures taken to resolve the crisis in relations between the Islamic Republic of Iran and the United States of America arising out of the November 1979 hostage crisis at the United States Embassy in Tehran, and the subsequent freezing of Iranian assets by the United States of America.
The Government of the Democratic and Popular Republic of Algeria served as intermediary in the search for a mutually acceptable solution. Having consulted extensively with the two Governments as to the commitments each was willing to undertake in order to resolve the crisis, the Government of Algeria recorded those commitments in two Declarations made on 19 January 1981. The “General Declaration” and the “Claims Settlement Declaration”, collectively “Algiers Declarations”, were then adhered to by Iran and the United States.
The Tribunal consists of nine Members, three appointed by each Government and three (third-country) Members appointed by the six Government-appointed Members.
Jurisdiction and Procedure of the Tribunal
In accordance with the Algiers Declarations, The Tribunal has jurisdiction to decide claims of United States nationals against Iran and of Iranian nationals against the United States, which arise out of debts, contracts, expropriations or other measures affecting property rights; certain “official claims” between the two Governments relating to the purchase and sale of goods and services; disputes between the two Governments concerning the interpretation or performance of the Algiers Declarations; and certain claims between United States and Iranian banking institutions.
Claims had to be filed with the Tribunal by 19 January 1982, and their number is therefore finite. Approximately 1,000 claims were filed for amounts of $250,000 or more, and approximately 2,800 claims for amounts of less than $250,000. The time limit does not apply to disputes between the two Governments concerning interpretation of the Algiers Declarations.
Claims are decided by one of the three Chambers of the Tribunal or by the Full Tribunal. Cases are distributed to Chambers by lot. The Full Tribunal decides all disputes between the two Governments, as well as important questions referred to it by the Chambers.
The Tribunal conducts its business in accordance with the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL), as modified by the Governments and the Tribunal.
The General Declaration records the central commitments of the parties. Iran would bring about the release of the hostages and, in exchange, the United States would restore the financial position of Iran, in so far as possible, to that which existed prior to 14 November 1979 – the date of the United States freeze order. Because the restoration of the financial position of Iran involved the transfer of assets, and because such transfer required, in addition to the lifting of the freeze order, that judicial attachments be nullified and court proceedings be brought to an end, it also became necessary to provide alternative means for the adjudication of pending commercial claims by United States nationals against Iran and its State enterprises. Accordingly, in the General Declaration, the United States agreed, inter alia, “to terminate all legal proceedings in United States courts involving claims of United States persons and institutions against Iran and its State enterprises, to nullify all attachments and judgments obtained therein, to prohibit all further litigation based on such claims, and to bring about the termination of such claims through binding arbitration”.
The Claims Settlement Declaration established the Iran-United States Claims Tribunal as the mechanism for bringing about such binding third-party arbitration. It provides: “Claims referred to the arbitration Tribunal shall, as of the date of filing of such claims with the Tribunal, be considered excluded from the jurisdiction of the courts of Iran, or of the United States, or of any other court.”
On 1 July 1981, the Tribunal held its first meeting in the Peace Palace in The Hague. In April 1982, the Tribunal moved to its own premises in The Hague.