1 An indication of the significance of these issues is found in a detailed discussion of them in Symposium on the Settlement with Iran, 13 Law. Am. 1, 18–46 (1981).

2 I have been unable to find any law journal article, available as of the date of this writing, mid-December 1983, that discusses the decisions themselves. A very good student note did, however, survey the major legal issues in advance of the decisions. See Note, Changed Circumstances and the Iranian Claims Arbitration: Applications to Forum Selection Clauses and Frustration of Contract, 16 Geo. Wash. J. Int’l L. & Econ. 335 (1982).

3 Decision with Regard to Jurisdiction over Claims Filed by Iran Against U.S. Nationals, Case No. A/2, 21 ILM 78 (1982).

Scholarship on the Tribunal’s work has so far been hampered by the relative inaccessibility of the Tribunal’s rules, orders and decisions. This condition should shortly be remedied with the publication by Grotius Publications, Ltd. of the Iran-United States Claims Tribunal Reports—Decisions, Awards, and Selected Orders. At present, the only published source for all the Tribunal’s decisions is the Iranian Assets Litigation Reporter (Andrews Publications). This comprehensive service also reprints especially significant pleadings before the Tribunal, as well as news items related to its proceedings. The cost of this service, unfortunately, puts it out of reach for most scholars. In consequence, the best source of documentation on cases before the Tribunal is probably the U.S. Department of State, whose Office for Iranian Claims, a unit of the Office of the Legal Adviser, kindly supplied the author with copies of the decisions and memorials under discussion in this article.

4 The complete package of instruments embodying the settlement is conveniently collected in 75 AJIL 418–30 (1981) and 20 ILM 223–40 (1981). The individual instruments are: Declaration of the Government of the Democratic and Popular Republic of Algeria relating to the Commitments made by Iran, 75 AJIL at 418; Undertakings of the Government of the United States of America and the Islamic Republic of Iran with Respect to the Declaration of the Democratic and People’s Republic of Algeria, id. at 425; Declaration of the Government of the Democratic and Popular Republic of Algeria Concerning the Settlement of Claims by the Government of the United States of America and the Government of the Islamic Republic of Iran, id. at 422 [hereinafter cited as Claims Settlement Agreement]; Escrow Agreement, id. at 426.

There have been a number of commentaries on the settlement. See, e.g., Norton, & Collins, , Reflections on the Iranian Hostage Settlement, 67 A.B. A.J. 428 (1981)Google Scholar; Belman, Owen & Lowenfeld, , Remarks, The U.S. / Iranian Hostage Settlement, 75 ASIL Proc. 236(1981)Google Scholar; Iranian Hostage Agreement under International and U.S. Law, 81 Colum. L. Rev. 822 (1981); Symposium, supra note 1; U.S. Iran Hostage Agreement: A Study in Presidential Power, 15 Cornell Int’l L.J. 1619 (1982).

5 The Tribunal does not have jurisdiction over claims by one of the states concerned against nationals of the other, except by way of counterclaim. Case No. A/2, 21 ILM at 78.

6 Claims Settlement Agreement, supra note 4, Art. II.

7 Paragraph 11 of the Declaration relating to Commitments, supra note 4, provides:

[T]he United States will . . . bar and preclude the prosecution against Iran of any pending or future claim of the United States or a United States national arising out of events occurring before the date of this declaration related to (A) the seizure of 52 United States nationals on November 4, 1979, (B) their subsequent detention, (C) injury to United States property or property of the United States nationals within the United States Embassy compound in Tehran after November 3, 1979, and (D) injury to the United States nationals or their property as a result of popular movements in the course of the Islamic Revolution in Iran which were not an act of the Government of Iran.

The claims described in paragraph 11 and any Iranian claims arising out of the U.S. reaction to the conduct described in paragraph 11 are excluded from the Tribunal’s jurisdiction. Claims Settlement Agreement, supra note 4, Art. II.

8 Claims Settlement Agreement, supra note 4, Art. II.

9 The mushiness of this description is deliberate. As we shall see, the Tribunal left open the question whether any particular claim actually “arose under” a contract. See infra sec. Ill, circa note 34.

10 Stone & Webster Overseas Group, Inc. v. National Petrochemical Co. and Razi Chemical Co., Case No. 293, ITL 8–293–FT, pt. Ill, at 7 (Nov. 5, 1982). In order to make it easier to identify the Tribunal’s decisions and to locate cited passages, I have cited not only the case title and number and the date of the award, but also the award number assigned to the decision by the Tribunal. This should make possible ready identification of my citations with those in any published source. In the immediately preceding citation, the ITL designation identifies the award as an interlocutory order, the number “8” identifies the order as the eighth such order by the Tribunal, the number “293” identifies the case to which the order relates, and the “FT” character signals that the order was made by the Full Tribunal, rather than by one of its three chambers whose decisions are identified by the numbers 1, 2 or 3 in the same position in a citation.

11 Howard Needles Tammen and Bergendoff v. Government of the Islamic Republic of Iran, the Ministry of Roads and Transportation and Bank Tejarat, Case No. 68, ITL 3-68-FT, at 2 (Nov. 5, 1982); Gibbs & Hill, Inc. v. Iran Power Generation & Transmission Co. of the Ministry of Energy of the Government of Iran, Case No. 6, ITL 1-6-FT, pt. II, at 3 (Nov. 5, 1982); T.C.S.B., Inc. v. Iran, Case No. 140, ITL 5-140-FT, pt. II, at 2 (Nov. 5, 1982).

12 Halliburton Co., IMCO Services (U.K.) Ltd. v. Doreen/IMCO, the Islamic Republic of Iran, Case No. 51, ITL 2-51-FT, pt. Ill, at 4 (Nov. 5, 1982); George W. Drucker, Jr. v. Foreign Transaction Co. Insurance Co. of Iran and National Grain, Sugar & Tea Org., Case No. 121, ITL 4-121-FT, pt. Ill, at 7 (Nov. 5, 1982); T.C.S.B., Inc. v. Iran, Case No. 140, supra note 11, pt. Ill, at 4; Ford Aerospace & Communications Corp., Aeronutronic Overseas Services Inc. v. the Air Force of the Islamic Republic of Iran, Case No. 159, ITL 6-159-FT, at 3 (Nov. 5, 1982); Stone & Webster Overseas Group, Inc. v. National Petrochemical Co. and Razi Chemical Co., Case No. 293, supra note 10, pt. II, at 3.

13 Memorials were filed by each of the claimants and respondents as well as by the two Governments. The Iranian respondents all filed nearly identical memorials, differing only in a short concluding section focused on the particular language of the clause involved in each case. The main issues were framed by the two Governments’ memorials and by the standard memorial filed on behalf of the Iranian respondents. Our discussion will thus focus on the positions taken in these filings.

14 Memorial of the Government of the United States of America on the Issue of Jurisdiction 5, Gibbs & Hill, Case No. 6, supra note 11 [hereinafter cited as Memorial of the United States] (on file with the author).

15 This argument, however, is potentially a double-edged sword because a claim that has been couched in noncontractual terms in order to take it outside the scope of the Article II exclusion might not easily fit within the categories of claims encompassed by the Article II grant. For more on this, see note 190 infra.

16 Memorial of the United States, supra note 14, at 10.

17 This was apparently the first time language on the subject had been proposed by either side. Declaration of Warren Christopher, at 9–10 (para. 13), Gibbs & Hill, Case No. 6, supra note 11 [hereinafter cited as Christopher Declaration] (on file with the author). Christopher’s affidavit indicated, however, that the problem of the enforceability of Iranian-forum clauses had been raised earlier in the negotiations:

From time to time during the ensuing negotiations the Algerian intermediaries mentioned the possibility that at some point the Iranians might ask for or propose a provision which would exclude from the jurisdiction of the arbitral tribunal claims arising under contracts containing Iranian court choice of forum provisions. On such occasions we replied that, given the drastic changes that had taken place in the Iranian judicial system since such contracts were entered into, the United States could not agree to an exclusion of such claims from the jurisdiction of the arbitral tribunal. We strongly urged that the only fair approach would be to allow the new tribunal to decide, as a matter of its own jurisdiction, under general principles of international and commercial law, whether a particular contract required under all the circumstances that a given claim should be adjudicated by an Iranian court rather than by the tribunal itself.

Id. at 7 (para. 9).

18 Id. at 9 (para. 12).

19 Id. at 10–11 (para. 14).

20 Id. at 12 (para. 16).

21 A third argument offered by the United States was really a variant of this basic one: that the denial of access to Iranian courts and the inadequacy of the remedies there constituted breaches of the Treaty of Amity, Economic Relations and Consular Rights, Aug. 15, 1955, 8 UST 899, TIAS No. 3853. “Having breached the treaty and dissolved the guarantees of fair treatment, Iran cannot now insist that U.S. claimants seek redress in Iranian courts.” Memorial of the United States, supra note 14, at 49. Because this argument also required the Tribunal to evaluate the quality of Iranian justice, it presented similar issues to those raised by the main argument on the adequacy of the contractual remedy.

22 See Annexes to the Memorial of the United States, supra note 14. An assessment of the situation in Iran by Noel Coulson, professor of oriental laws in the University of London, also accompanied the United States Memorial as Exhibit 2. Professor Coulson concluded at page 23 of his report:

In sum, therefore, it would be wholly unrealistic to think of the present Iranian situation in terms of “the rule of Law.” The law itself is uncertain; the judiciary are politically involved to the extent that they must be prejudiced by consideration of national and international policies and relations; and finally, in the present mood of national religious fervor it would be foolish to pretend that any safe-conduct would or could be effectively guaranteed to those nationals of a nation declared “hostile” to Iran who might seek legal redress through the Iranian courts.

23 The exception, probably theoretical, might be a claim arising under a contract signed after the Iranian Revolution was underway and the essential characteristics of the legal order under the new regime were already clear.

24 Memorial of the Government of the Islamic Republic of Iran 3–4, Gibbs & Hill, Case No. 6, supra note 11 [hereinafter cited as Memorial of Iran] (on file with the author); Memorial of the Respondent 5, Zokor Int’l, Ltd. v. Societe de Chemin de Fer Urbain de Teheran et de sa Banlieu, Case No. 254, ITL 7-254-FT (Nov. 5, 1982) [hereinafter cited as Memorial of Iranian Respondents] (on file with the author).

25 Memorial of Iran, supra note 24, at 3–4; Memorial of Iranian Respondents, supra note 24, at 5. Attachment 1 of the latter contains excerpts from the Majlis debate on the forum-clause issue. The debate is of some interest for it illuminates at least the subjective intentions of the Iranian parliament and to some extent contradicts Iran’s assertion that the Majlis position was as sweeping as stated in the text. See note 197 infra.

26 Memorial of Iran, supra note 24, at 5.

27 Id. at 12–13.

28 See text at note 18 supra.

29 Memorial of Iran, supra note 24, at 7–8 (emphasis added).

30 Id. at 9–10. At various points in its argument, Iran seemed to advance an even more far-reaching contention. Iran seemed to consider the provision of Article II dealing with Iranian-forum clauses not merely as a limitation on the jurisdiction of the Claims Tribunal, but as a confirmation of the jurisdiction of the Iranian courts. That is, Iran regarded this provision as agreement by the United States that certain claims should be heard by the Iranian courts. Thus, Iran’s Memorial described the provision we have called “the Article II exclusion” as “the provision for the jurisdiction of the Iranian courts” and declared flatly that “[a]ny referral to another forum would be in contravention of their [the claimants’] contractual obligations as well as those of their sovereign government, which are legally binding on them.” Id. at 7. For a discussion of the Tribunal’s treatment of this contention, see text at notes 191–192 infra.

31 See note 8 supra and accompanying text.

32 To “respond” to the Majlis position was not necessarily to “adopt” it, as the United States pointed out, offering Christopher’s testimony that this distinction was indeed intended by the choice of the word “respond.” Christopher Declaration, supra note 17, at 13–14 (para. 18).

33 Memorial of Iran, supra note 24, at 17.

34 See, e.g., Halliburton Co., Case No. 51, supra note 12, at 7.

35 Only Arbitrators Mosk and Holtzmann, both appointed by the United States, dissented. The majority result thus commanded the adherence of all three “neutral” arbitrators and Arbitrator Aldrich, appointed by the United States, in addition to the three Iranian-appointed arbitrators.

36 Of the 19 holdings in question, the Tribunal upheld its own jurisdiction in 13 instances. The following table shows how the 13 were distributed:

Note: Because there were alternate holdings in Case No. 254, the sum here exceeds by one the total number of instances in which the Tribunal upheld its own jurisdiction.

37 Gibbs & Hill, Case No. 6, supra note 11, pt. III, at 7; Stone & Webster, Case No. 293, supra note 10, pt. III, at 7. Gibbs & Hill involved a clause calling for arbitration in Iran. The vote was 6-3, the Iranian arbitrators alone dissenting, in favor of jurisdiction. In Stone £f Webster, the clause provided for arbitration in Paris under the auspices of the International Chamber of Commerce. The vote was unanimous in favor of jurisdiction.

38 Gibbs & Hill, Case No. 6, supra note 11, pt. III, at 6.

39 Id. at 7.

40 See, e.g., id., pt. II, at 4–5; Howard Needles Tamtnen & Bergendoff, Case No. 68, supra note 11, at 2. President Lagergren joined the three Iranian-appointed arbitrators in dissenting from this decision.

In T.C.S.B., Inc. v. Iran, Case No. 140, supra note 11, pt. II, at 2, the Tribunal held (6–3) that a clause referring to “arbitration or the competent courts” did not exclude its jurisdiction. The case was easier than those just cited owing to the equal status given arbitration and litigation before the ordinary courts in the clause.

41 See, e.g., Gibbs & Hill, Case No. 6, supra note 11, pt. II, at 4–5.

42 Only the Iranian-appointed arbitrators dissented.

43 Ford Aerospace & Communications, Case No. 159, supra note 12, at 3.

44 Id. at 3–4.

45 George W. Drucker, Jr., Case No. 121, supra note 12. The clause there referred all disputes regarding “execution” or “performance” of the contract to the “Iranian legal authorities,” a term the Tribunal interpreted to mean “courts.” Paradoxically, in view of its position in Case No. 159, the Tribunal determined that a clause limited to disputes arising out of the execution of the contract was sufficiently comprehensive to fall within the scope of the exclusion. The majority declared:

It is in practice often difficult if not impossible to draw a demarcation line between disputes concerning the performance of the parties’ contractual obligations, on the one hand, and the interpretation or validity of the agreement on the other hand; disputes of the former kind will often inevitably entail questions of interpretation or validity, and disputes of the latter kind usually arise from performance.

Id., pt. II, at 4. It is apparent that this language and holding are at odds with the thrust of the language in the Ford Aerospace case and the Tribunal will have to work out this conflict over time.

46 Indeed, such a construction seems more reasonable than does one under which the clause simply refers to some wholly unspecified courts and makes a redundant choice of Law. Under the latter view, adopted by the Tribunal, the first portion of the clause accomplishes nothing since it neither attributes jurisdiction to any court lacking it nor excludes the jurisdiction of any court having it. The second portion of the clause is equally pointless given the existence of a separate choice-of-law provision. As a matter of contract construction pure and simple, it would be preferable to construe the clause both as a choice of the Iranian courts and as a designation of the particular Iranian courts chosen, i.e., those competent under Iranian Law. Gibbs & Hill, Case No. 6, supra note 11 (Nov. 9, 1982) (Joint Dissenting Op. of Lagergren, Kashani, Shafeiej, & Jahangir Sani). In a legal order that divides judicial authority along functional as well as geographic lines, such a designation is certainly useful and may even be necessary. See Booth Steamship Co., Ltd. v. Humbert, 89 J. Droit Int’l 1022 (Cour d’Appel de Rouen 1961); 1 Delaume, G., Transnational Contracts, para. 6.14 n. 3 (1980)Google Scholar.

I am not arguing that this construction is inevitable; it is also possible, though unlikely, that the parties to such a contract intended to confer jurisdiction on any court that would have jurisdiction under Iranian principles of international judicial jurisdiction.

47 This is not to say that the specificity requirement eliminated all scope for interpretation. In George W. Drucker, Jr., Case No. 121, supra note 12, the Tribunal decided that the phrase “Iranian legal authorities” meant “courts.” The majority’s willingness to depart from an in haec verba understanding of the specificity requirement was criticized sharply by Arbitrator Mosk and Arbitrator Holtzmann, each of whom wrote a single opinion addressed to the issues in all nine cases. Concurring and Dissenting Opinion of Howard M. Holtzmann with respect to Interlocutory Awards on Jurisdiction in Nine Cases Containing Various Forum Selection Clauses 37 (Nov. 5, 1982) [hereinafter cited as Holtzmann Opinion]; Dissenting and Concurring Opinion of Richard, M. Mosk on the Issues of Jurisdiction 22 (Nov. 5, 1982)Google Scholar [hereinafter cited as Mosk Opinion] (on file with the author).

48 Holtzmann Opinion, supra note 47, at 5–6.

49 Halliburton Co., Case No. 51, supra note 12, pt. III, at 4. T.C.S.B., Inc., Case No. 140, supra note 11, pt. III, at 4.

50 It should also be noted that the Tribunal quite properly held that contractual language requiring that efforts be made to negotiate a resolution prior to litigation did not take the clause outside the scope of the Article II exclusion. George W. Drucker, Jr., Case No. 121, supra note 12, pt. II, at 2; T.C.S.B., Inc., Case No. 140, supra note 11, pt. Ill, at 4.

51 See, e.g., Halliburton Co., Case No. 51, supra note 12, pt. III, at 7.

52 Id. at 5.

53 Id.

54 Id.

55 Id. at 6.

56 Id. at 7.

57 It consequently avoided making any determination that might be given collateral estoppel effect in subsequent litigation in other forums. For further discussion of this point, see text at note 192 infra.

58 Mosk Opinion, supra note 47, at 4–13; Holtzmann Opinion, supra note 47, at 9–11, 16– 21.

59 The support for this principle, which is after all only an application of the general rule that terms are to be given their ordinary meaning in order to effect the intention of the parties, is extensive. See, e.g., Anglo-Iranian Oil Co. case (Jurisdiction), 1952 ICJ Rep. 93, 105 (Judgment of July 22); Cayuga Indian Claims Case (U.S. v. UK), 6 R. Int’l Arb. Awards 173, 184 (1926) (“We are not asked to choose between possible meanings. We are asked to reject the apparent meaning and to hold that the provision has no meaning.”); Fitzmaurice, , The Law and Procedure of the International Court of Justice, 1951–4: Treaty Interpretation and Other Treaty Points, 33 Brit. Y.B. Int’l L. 203, 211, 220–23 (1957)Google Scholar.

60 An interesting example of a case in which the testimony of a participant in negotiations was used as an aid to interpretation is provided by a recent decision of the Arbitral Tribunal for German External Debts. See Judgment in the Case of Belgium, France, Switzerland, the United Kingdom and the United States v. Federal Republic of Germany, 19 ILM 1357, 1378–80 (1980).

61 Halliburton Co., Case No. 51, supra note 12, pt. III, at 6.

62 Mosk Opinion, supra note 47, at 10–13; Holtzmann Opinion, supra note 47, at 21–25.

63 Mosk Opinion, supra note 47, at 4. See generally Sandifer, D., Evidence before International Tribunals 179 (rev. ed. 1975)Google Scholar.

64 See, e.g., Shapiro, M., Courts: A Comparative and Political Analysis 3 (1981)Google Scholar; Zartman, I. & Berman, M., The Practical Negotiator 78–80 (1982)Google Scholar.

Oran Young’s study of the role of third parties in international crises is particularly rich in its elaboration of the variety of strategies and tactics that may be adopted by a third party. Young, O., The Intermediaries: Third Parties in International Crises 34–42, 49–61 (1967)Google Scholar. Among these techniques are some that use the intermediaries’ control over the flow of communications: “Techniques and tactics involved in this connection would include, for example, the suppression of information in cases where such information might be disruptive, timing the delivery of various messages, selecting materials for emphasis and deemphasis, and even distorting messages in appropriate directions.” Id. at 39.

65 Christopher Declaration, supra note 17, at 9–10 (paras. 12–13).

66 Id. at 10 (para. 14).

67 Both Holtzmann and Mosk evidently thought such an assumption was unreasonable. See Holtzmann Opinion, supra note 47, at 24; Mosk Opinion, supra note 47, at 11 n.10.

68 Thus, one may search the comparative law surveys in vain for an example of a rule that an exclusive choice of foreign forum is always to be given effect. See The Validity of Forum Selecting Clauses: Proceedings of the 1964 Annual Meeting of the American Foreign Law Association, 13 Am. J. Comp. L. 157 (1964); Pryles, control over the flow of communications, Comparative Aspects of Prorogation, and Arbitration Agreements, 25 Int’l & Comp. L.Q. 543 (1976)CrossRefGoogle Scholar; Kahn-Freund, , Jurisdiction Agreements: Some Reflections, 26 id. at 825 (1977)Google Scholar.

69 These rules have been drawn upon by international tribunals, notably by the Permanent Court of International Justice. See Case Concerning the Payment of Various Serbian Loans Issued in France, 1929 PCIJ, ser. A, Nos. 20–21, at 41 (Judgment of July 12).

70 Kahn-Freund, supra note 68, at 833–36.

71 Pryles, supra note 68, at 547.

72 Compare Saudi Arabia v. Arabian American Oil Co. (Aramco), 27 ILR 117, 156 (Arbitration Tribunal 1958) (law governing arbitration is international law); accord, Texaco Overseas Petroleum Co./California Asiatic Oil Co. v. Government of the Libyan Arab Republic, 53 id. at 389, 431 (Dupuy, Sole Arbitrator, 1975 & 1977); with B.P. Exploration Co. (Libya) Ltd. v. Government of the Libyan Arab Republic, id. at 297, 308 (Lagergren, Sole Arbitrator, 1973 & 1974) (law governing arbitration is law of place arbitration is held).

73 There seems to be little doubt that the declarations should be so characterized. See Mosk Opinion, supra note 47, at 1; Holtzmann Opinion, supra note 47, at 10; Case No. A/2, supra note 3, 21 ILM at 85 (Dissenting Opinion of Arbitrators Kashani, Shafeiei & Enayat).

74 See, e.g., North Am. Dredging Co. (U.S. v. Mex.), 4 R. Int’l Arb. Awards 26 (1926); Mexican Union Ry. Co. (UK v. Mex.), 5 R. Int’l Arb. Awards 115 (1930); Shea, D., The Calvo Clause (1955)Google Scholar; Restatement (Second) of the Foreign Relations Law of the United States §202 (1965); García-Amador, F., Sohn, L. & Baxter, R., Convention on the International Responsibility of States for Injuries to Aliens (Final Draft with Explanatory Notes), Art. 22, Explanatory Note, para. 5, in Recent Codification of the Law of State Responsibility for Injuries to Aliens (1974)Google Scholar; Feller, A., The Mexican Claims Commission 186 n.9 (1935)Google Scholar; Reuter, P., Droit International Public 163 (1963)Google Scholar; De Visscher, C., Theory and Reality in Public International Law 160 ( Corbett, P. trans. 1968)Google Scholar.

75 See Vienna Convention on the Law of Treaties, May 23, 1969, Art. 2, para. 1(a), UN Doc. A/CONF.39/27, reprinted in 63 AJIL 875 (1969), 8 ILM 679 (1969).

76 This approach appears to have been followed consistently by the Mixed Arbitral Tribunals established after the First World War. See, e.g., Goulley v. Société Anonyme “Bosphore,” 5 Trib. Arb. Mixtes 410, 413 (1925); Gouvernement Hellénique v. Vulcan Werke, id. at 887, 897 (1925). Several cases in the highly variable jurisprudence of early mixed claims commissions also took this view. See D. Shea, supra note 74, at 145, 152, 161. A particularly and characteristically forthright expression of this position may be found in Ralston’s decision in the Martini Case, 10 R. Int’l Arb. Awards 644, 663–64 (1903).

77 The key case, of course, is North Am. Dredging Co. (U.S. v. Mex.), 4 R. Int’l Arb. Awards 26 (1926), although some earlier cases pointed in the same direction, e.g., The Woodruff Case (U.S. v. Venez.), 9 id. at 213, 222–23 (1903).

78 North Am. Dredging Co., 4 R. Int’l Arb. Awards 26. Much of the opinion is confusing, even self-contradictory. The Commission’s application of the rules it pronounced to the facts of the case before it is questionable. D. Shea, supra note 74, at 211. Nonetheless, as demonstrated by Donald Shea, the rule of North American Dredging has become widely accepted as the correct rule of law in this area. Id. at 215–23. The Commission itself applied it in several subsequent cases, id. at 231– 57; and the British-Mexican General Claims Commission expressly adopted it, Mexican Union Ry. Co., 5 R. Int’l Arb. Awards 115 (1930). Both the United States and Great Britain stated their acceptance of the opinion as accurately reflecting international Law. D. Shea, supra note 74, at 228– 29. The Restatement (Second) of the Foreign Relations Law of the United States adopts the rule of North American Dredging (see supra note 74, §202, Reporters’ Note), as does the Sohn-Baxter codification of the law of state responsibility, at least as regards denials of justice (see F. García-Amador, L. Sohn & R. Baxter, supra note 74, Art. 22, Explanatory Note, para. 5).

79 North Am. Dredging Co., 4 R. Int’l Arb. Awards at 29 (emphasis added).

80 Id. at 31 (emphasis added).

81 Id. at 32.

82 Id. at 30.

It should be noted, too, that dicta in the Woodruff Case, perhaps the most important decision prior to North American Dredging in which jurisdiction was refused in view of the existence of a Calvo Clause, point in the same direction. The Woodruff Case (U.S. v. Venez.), 9 R. Int’l Arb. Awards 213 (1903).

83 Mexico Union Ry. Co. (UK v. Mex.), 5 R. Int’l Arb. Awards 115, 122 (1930).

84 Id.

85 El Oro Mining & Ry. Co. v. United Mexican States, 5 R. Int’l Arb. Awards 191 (1931).

86 See M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972); Restatement (Second) of Conflicts of Laws §80 (1971); The Eleftheria, [1969] 2 All E.R. 641, 645 (per Brandon J.).

87 407 U.S. 1, 15 (1972).

88 Model Choice of Forum Act (1968), reprinted in 17 Am. J. Comp. L. 292 (1969).

89 The Eleftheria, [1969] 2 All E.R. 641, 645.

90 [1939] 4 All E.R. 16 (Ch.).

91 “Innumerable discriminating measures taken by the present German regime against the Jews would greatly prejudice my position. It would be impossible for me to go to Germany because there would be grave danger of my being sent to prison or to a concentration camp.” Id. at 24.

92 Id.

93 [1979] 3 All E.R. 280.

94 Id. at 283.

95 Id. at 285 (Browne L.J.); id. at 288–89 (Geoffrey Lane L.J.).

96 Id. at 284.

97 Thus, a bare allegation that Mexican courts would favor a local company against an American company will not justify permitting the action to go forward in a U.S. court. Crown Beverage v. Cerveceria Moctezuma, 663 F.2d 886 (9th Cir. 1981). In the Iranian context, American claimants need not rest on unsupported assertion. Substantial evidence can be adduced to show the difficulty an American claimant would have in obtaining access to an impartial hearing in an Iranian court. On such a showing, there is no doubt that a U.S. court would find enforcement of the Iranian-forum clause “unjust and unreasonable” under Zapata and that an English court would reach the same result under The Eleftheria. U.S. courts in fact have refused to give effect to Iranian-forum clauses on such grounds. See, e.g., Harris Corp. v. National Iranian Radio & Television. 691 F.2d 1344, 1357 (11th Cir. 1982); Itek Corp. v. First Nat’l Bank of Boston, 511 F. Supp. 1341, 1349 (D. Mass. 1981), vacated and remanded on other grounds, 704 F.2d 1 (1st Cir. 1983).

98 BGH, Judgment of Dec. 3, 1973, 1973 Deutsche Rechtsprechung Auf Dem Gebiete Des Internationalen Privatsrechts [I.P.R. spr.], No. 128b, §364, para. 2 (German Federal Supreme Court). See OLG Hamburg, Judgment of May 25, 1978, 1978 I.P.R. spr., No. 141, §342, para. 2 (Hamburg Court of Appeals); BAG, Judgment of June 29, 1978, id., No. 144, §351, para. 1 (German Federal Labor Supreme Court).

99 Pryles, supra note 68, at 559; Kahn-Freund, supra note 68, at 849.

100 Kahn-Freund, supra note 68, at 849 n.137.

101 Reboul v. Société Tekkah (Cass. ch. civ. 1931), 58 J. Droit Int’l 1039 (1931).

102 Commercial Court of Rouen, decision of Jan. 10, 1955, noted in 45 Rev. Critique Droit Int’l Privé [R.C.D.I.P.] 716 (1956). The report of the case may be found in the 1955 volume of Droit Maritime François at p. 544; it was not, unfortunately, available to the author. The case is cited with approval by Batiffol. 2 H. Batiffol, Droit International Privé 430 (6th ed. 1976).

103 The tribunal in North American Dredging, for example, spoke of its appreciation for “the legitimate desire on the part of nations to deal with persons and property within their respective jurisdictions according to their own laws and to apply remedies provided by their own authorities and tribunals.” 4 R. Int’l Arb. Awards at 27. Or as the British-Mexican Claims Commission put the matter, states possessed of great, but undeveloped, natural resources may “consider that they must not deprive their country of the advantages occurring from the investment of foreign capital and from foreign technical knowledge, and yet at the same time see to it that the presence of huge foreign interests within their boundaries does not increase their international vulnerability.” Mexican Union Ry. Co., 5 id. at 119. This view of national objectives was wholly legitimate and Calvo Clauses were appropriate instruments for achieving those ends. Id.

104 North Am. Dredging Co., 4 R. Int’l Arb. Awards at 31.

105 Cf. Island of Palmas Case, 2 R. Int’l Arb. Awards 829, 839 (M. Huber, Sole Arbitrator 1928):

Territorial sovereignty cannot limit itself to its negative side, i.e., to excluding the activities of other States; for it serves to divide between nations the space upon which human activities are employed, in order to assure them at all points the minimum of protection of which international law is the guardian.

106 Cf. Cover, & Aleinikoff, , Dialectical Federalism: Habeas Corpus and the Court, 86 Yale L.J. 1035, 1046 (1977)Google Scholar (for development of a similar notion in the context of a federal system).

107 4 R. Int’l Arb. Awards at 31.

108 5 R. Int’l Arb. Awards at 122.

109 Case of Certain Norwegian Loans, 1957 ICJ Rep. 9, 39 (Judgment of July 6) (Sep. Op. Lauterpacht).

110 1939 PCIJ, ser. A/B, No. 76, at 18.

111 Carvalho v. Hull Blyth (Angola) Ltd., [1979] 3 All E.R. 280; Ellinger v. Guinness, Mahon & Co., [1939] 4 All E.R. 16; Harris Corp. v. National Iranian Radio & Television, 691 F.2d 1344, 1357 (11th Cir. 1982); Itek Corp. v. First Nat’l Bank of Boston, 511 F. Supp. 1341, 1349 (D. Mass. 1981), vacated and remanded on other grounds, 704 F.2d 1 (1st Cir. 1983).

112 1927 PCIJ, ser. A, No. 9, at 31.

113 Case of Certain Norwegian Loans, 1957 ICJ Rep. at 39 (Sep. Op. Lauterpacht).

114 1927 PCIJ, ser. A, No. 9, at 31. According to Shea, the same principle was applied by the U.S.-Chile Claims Commission in the North & South Am. Construction Co., decided in 1894. The contractual forum, a special arbitral tribunal established pursuant to Chilean law, had been suppressed by decree of the Chilean Government which, consequently, was estopped from pleading the arbitration agreement as a bar to the Claims Commission’s jurisdiction. See D. Shea, supra note 74, at 140–43.

115 The principle is recognized both in civil law systems, French Code Civil, Art. 1147; and in common law systems, Restatement (Second) of Contracts §231, Comment a (Tent. Drafts Nos. 1–7, rev. ed. 1973).

116 Iranian Civ. Code, Art. 227 (M. Sabi trans. 1973).

117 Vienna Convention on the Law of Treaties, supra note 75, Art. 62 (international law); Ramberg, J., Cancellation of Contracts of Affreightment on Account of War and Similar Circumstances 141–61 (Scandinavian law), 162–98 (English law), 199–222 (American law) (1969)Google Scholar; Sawada, J., Subsequent Conduct and Supervening Events 101–61 (1968)Google Scholar (American and Japanese law); Lesguillons, , Frustration, Force Majeure, Imprevision, Wigfall der Geschaftsgrundlage, 5 Int’l Trade L. & Prac 507 (1979)Google Scholar (English and continental law); Smit, , Frustration of Contract: A Comparative Attempt at Consolidation, 58 Colum. L. Rev. 287 (1958)CrossRefGoogle Scholar (Swiss, German, Dutch, French, English, American law). For an argument that such doctrines should be restrictively applied, if at all, in the context of international trade, see Berman, , Excuse for Nonperformance in the Light of Contract Practices in International Trade, 63 id. at 1413 (1963)Google Scholar.

118 U.C.C. §§2–614, 2–615 (1971).

119 See generally Cattan, H., The Law of Oil Concessions in the Middle East and North Africa 127–28 (1967)Google Scholar.

120 Vienna Convention on the Law of Treaties, supra note 75, Art. 62.

121 See sources cited in note 117 supra.

122 See Smit, supra note 117, at 301–03.

123 The doctrine has been invoked in the following cases: Fisheries Jurisdiction (UK v. Ice.), 1973 ICJ Rep. 3, 18–21 (Judgment of Feb. 2); Free Zones of Upper Savoy Case, 1932 PCIJ, ser. A/B, No. 46, at 96, 156–60; Alsing Trading Co. case, 23 ILR 633, 654–55 (1956); Tunnel Indemnity case, discussed in Wetter, & Schwebel, , Some Little-Known Cases on Concessions, 40 Brit. Y.B. Int’l L. 183, 206 (1964)Google Scholar.

124 1973 ICJ Rep. 3.

125 Id. at 21.

126 Id. at 33 & n.16 (Sep. Op. J. Fitzmaurice).

127 It should be noted that an argument premised on the applicability of rebus sic stantibus to compromissory clauses was made in the Nuclear Tests cases. In Nuclear Tests, France argued that the Geneva General Act of 1928 had lost its effectiveness since it “was an integral part of the League of Nations system and, since the demise of the League of Nations, has lost its effectivity [sic] and fallen into desuetude.” Nuclear Tests (Austl. v. Fr.), 1973 ICJ Rep. 99, 102 (Interim Protection Order of June 22). The Court did not pass on the question, but the very fact that the argument was made is further support for the proposition that general rules relating to a fundamental change of circumstances apply as well to jurisdictional clauses.

128 1964 R.C.D.I.P. 529 (Cass. civ. Ire, Jan. 23, 1962 and March 4, 1963).

129 1964 R.C.D.I.P. 529, 530–31 (Cass. civ. Ire, Jan. 23, 1962). Professor Batiffol comments that the question is one of the intention of the parties and that the intent in these cases was to submit to the jurisdiction of a French court in the former colony. That intention no longer could be carried out. Id. at 531. He also declares that the same result should be reached were the clause found in a contract between two nationals of a third state, which makes clear that the results do not rest on some special solicitude for French plaintiffs in French courts. Id. Cf. Société Am. Cameroun v. Morennay, 1966 id. at 469.

130 2 H. Batiffol, supra note 102, at 238.

131 [1979] 3 All E.R. 280, 285.

132 Id.

133 Id. at 285.

134 Id.

135 Id.

136 Id. at 288.

137 Id. at 285. The test is not a new one in English Law. See the discussion in J. Ramberg, supra note 117.

138 See, e.g., Paternity Suit case, 20 ILR 93 (Austria, S. Ct. 1953). In that case, a choice-of-forum clause executed during the period of Austria’s incorporation into the German Reich and referring disputes to a court in Vienna was held still binding despite Austria’s re-emergence as a sovereign nation. Key to the decision, however, were the provisions of a special transitional law that transferred to the new Austrian courts all the business of the former courts.

139 Thus, Article V, which specifies the law to be applied by the Tribunal, directs it to take “changed circumstances” into account in its decisions. Claims Settlement Agreement, Art. V, supra note 4. Christopher indicated that “we included the reference to ‘changed circumstances’ in order to insure inter alia that the tribunal would take such changes into account in deciding whether to give effect to contractual provisions relating to choice of law and choice of forum.” Christopher Declaration, supra note 17, at 8 (para. 10).

140 This is a conventional distinction in the literature. See, e.g., F. García-Amador, L. Sohn & R. Baxter, supra note 74; Restatement (Second) of Foreign Relations Law, supra note 74, §§180–181.

141 Memorial of the United States, supra note 14, at 42–43.

142 “In June of 1980, the new Government prevented the scheduled election (for the Bar Council of the Tehran Bar Association) from taking place, citing the need to ‘purge’ the bar. . . .” Id. at 44 n.**. Annexes 17, 35 and 36 contain material describing the situation of the bar in Iran and provide much of the factual support for the U.S. claims discussed in this paragraph.

143 Id. at 44 and Ann. 17.

144 Id. at 45.

145 Id. at 46–48. See Anns. 15 & 21 and Exhibit 2.

146 Id. at 48.

147 Id. at 32.

148 The report by Professor Coulson, put before the Tribunal as Exhibit 2 of the United States, is a fascinating account of this program, its fundamental legal and philosophical assumptions, and its impacts on the interests of foreign nationals who had concluded contracts with the Iranian Government or state enterprises.

149 Constitution of the Islamic Republic of Iran, 36 Middle East J. 181, Principle 4 (1980), reprinted as Ann. 1 to the Memorial of the United States, supra note 14.

150 Id., Principles 1, 5, 107.

151 The “leader” appoints the President of the Supreme Court, the Attorney General and half the membership of the Council of Guardians, an organ charged with interpreting the Constitution and reviewing legislation for conformity with Islamic principles. Id., Principles 91, 94–98, 110, 162. The President of the Supreme Court and the Attorney General in turn sit on the High Judicial Council, which appoints and dismisses judges and recommends candidates for both the Minister of Justice and the nonclerical members of the Council of Guardians. Id., Principles 91, 157, 158, 160.

152 Id., Principle 163.

153 The Memorial of the United States, supra note 14, at 32–35, contains significant detail on this point.

154 Memorial of the United States in Response to the Memorial of Iran 11 n.4, Gibbs & Hill, Case No. 6, supra note 11; Holtzmann Opinion, supra note 47, at 15; Islamic Law, Bull. Legal Developments, March 25, 1983, at 65.

155 M. Shapiro, supra note 64, at 1.

156 Id. at 2. Shapiro’s language here, which evokes a third party who “decides in favor of one of the two disputants,” one of whom can therefore be identified as the “loser,” clearly focuses on a limited class of third-party dispute settlers. Simple go-betweens never align themselves with one of the parties by “deciding in favor” of one of them. There is some strain, too, in fitting mediators into this scheme, although mediators may and often will propose their own solutions.

157 Id. at 8.

158 See generally Barkun, G., Law without Sanctions 59–65 (1968)Google Scholar.

159 M. Shapiro, supra note 64, at 5, 7–8.

160 Id. at 8.

161 Id. at 2–3.

162 The continuum runs: go-between, mediator, arbitrator, judge, in Shapiro’s framework. Id. at 2–5.

163 Id. at 8–9.

164 See, e.g., Resnik, , Managerial Judges, 96 Harv. L. Rev. 376, 387–88, 391 (1982)Google Scholar; Fletcher, , The Discretionary Constitution: Institutional Remedies and Judicial Legitimacy, 91 Yale L J. 635 (1982)CrossRefGoogle Scholar.

The existence of techniques of decision-avoidance and of doctrines of judicial restraint, e.g., the political question doctrine, also probably reflects a concern with husbanding the resources on which judicial efficacy depends. See Bickel, A., The Least Dangerous Branch 244–53 (1962)Google Scholar.

165 M. Shapiro, supra note 64, at 6–7.

166 Compare the critical review by Professor Laura, Nader, A Comparative Perspective on Legal Evolution, Revolution, and Devolution, 81 Mich. L. Rev. 993 (1983)Google Scholar, with the much more favorable review by Professor David, Clark, 31 Am. J. Comp. L. 144 (1983)Google Scholar.

167 Shapiro’s framework would lead us to predict that difficulties in obtaining compliance with judicial decisions would become more common and intense as the consensual base of jurisdiction becomes more attenuated. This prediction seems to be borne out by the experience of the International Court of Justice. Noncompliance has been much more of a problem in cases where jurisdiction is based on the Optional Clause or on the compromissory clause of a treaty than when it is based on a special agreement to submit a dispute to the Court. For a tabulation (whose conclusion has only been reinforced by subsequent cases), see Gamble, J. & Fischer, D., The International Court of Justice: Analysis of a Failure 56–60 (1976)Google Scholar. We would also expect that as party control over the appointment and authority of the tribunal’s members decreased, there would be increasing emphasis on a decision according to law rather than abstract notions of justice. This prediction, too, seems borne out. If one considers the whole course of international arbitration and judicial settlement over the past century, one is struck first by the gradual diminution of party control over the tribunal. One might cite as examples of this trend, the disappearance of the once common procedure in which the impartial umpire acts only in cases of a deadlock between the party-appointed arbitrators, the provision of fail-safe mechanisms to insure the constitution of a tribunal notwithstanding the failure of one party to cooperate, and the establishment of tribunals with fixed membership. See generally Bowett, D., The Law of International Institutions 255–67 (4th ed. 1982)Google Scholar. At the same time as this trend was developing, one observes the gradual disappearance of once common formulae directing tribunals to decide cases in accordance with “international law and equity.” See Cayuga Indians Case (U.S. v. UK), 6 R. Int’l Arb. Awards 173, 179–83 (1926) (surveying arbitration agreements to that point), and the drawing of an increasingly rigid formal distinction between decisions according to law (normal) and decisions ex aequo et bono (requiring special consent). See, e.g., Statute of the International Court of Justice, Art. 38. One is indeed struck by the insistence of the ICJ that “equity” be understood not in some abstract sense, but as a body of principles forming part of the law (see North Sea Continental Shelf Cases, 1969 ICJ Rep. 4, 46–47 (Judgment of Feb. 20)), an insistence whose vehemence seems to increase as the failure of the Court to articulate such principles becomes more evident and the compromise quality of the outcome more apparent. See Tunisia/Libya Continental Shelf Case, 1982 id. at 18, 60 (Judgment of Feb. 24).

Finally, given the absence of effective community mechanisms for compelling compliance with judgments and the relatively undeveloped state of international law in many areas, one would also expect international tribunals to exhibit a fairly strong tendency to avoid decisions wholly adopting the position of one side or the other. Such a tendency has often been remarked. Shea, in discussing the early arbitral jurisprudence on the Calvo Clause, admonishes the reader to recall

that claims commissions, especially in the early period, were political as well as legal bodies, and since sovereign states were the parties before the tribunal, there was a strong temptation to soften the blow of an adverse decision by couching the opinion in the language of the diplomat rather than the jurist.

D. Shea, supra note 74, at 124. However, the validity of the point is not restricted to early claims commissions. The proposition can be tested against a “worst case,” the record of the International Court of Justice. A quick survey of the decisions of the ICJ over the last decade will show that even the Court, whose institutional traditions and aspirations result in a powerful commitment to “judicial” behavior, finds it difficult to give a decision wholly favorable to one of the parties. Thus, in Fisheries Jurisdiction (UK v. Ice.), 1973 ICJ Rep. 3, the Court declared Iceland’s extended fishery limits not opposable to the United Kingdom, but refused to consider their validity erga omnes. In Nuclear Tests (Austl. v. Fr.), 1974 id. at 253, the Court held that France had obligated itself to refrain from atmospheric testing, but declined to reach the question whether testing was otherwise unlawful. In the Tunisia/Libya Continental Shelf Case (Tunisia/Libyan Arab Jamahiriya), 1981 id. at 3, the Court adopted a line nearly midway between the boundaries claimed by the parties. Even in the Hostages case, surely one of most lopsided cases ever presented to an international tribunal, the Court tried to create some middle ground, first by inviting Iran to present defenses and counterclaims growing out of its grievances against the United States (Case concerning United States Diplomatic and Consular Staff in Tehran (U.S. v. Iran), 1979 id. at 7, 15 (para. 24) (Order of Dec. 15)), and later by suggesting that U.S. misdeeds might be relevant to a determination of the amount of reparations due from Iran (1980 id. at 3, 41 (para. 89) (Judgment of May 24)). More generally, international tribunals do tend to respond to factual or legal uncertainty by avoiding binary, either/or choices. Indeed, this very characteristic of international arbitral practice long ago led one of the greatest students of the subject to question the validity of the conventional model of judicial behavior:

[I]cannot help believing that at least some of those who have been led to entertain unfavorable impressions of arbitral judgments have shown a tendency to misconceive and overrate what is called the “judicial” element in the conclusions of municipal courts, as well as to misconceive and overrate the element of “compromise” involved in the conclusions of international arbitration. While the decisions of international arbitrators, like the decisions of municipal courts, have the character of final judgments and are in this sense alike “judicial,” we may safely affirm that there is little opportunity in the affairs of men for purely “judicial” deliverances, in the sense of applying clear and unquestionable law to plain and indisputable facts, not only without any element of compromise or adjustment, but with such certainty and lustre that they who run may read and not differ. Such things are not of this world.

Moore, J., International Adjudications: Modern Series xc (1929)Google Scholar.

168 A factor of particular interest for investigation is the unitary or tripartite character of the tribunal. It would be interesting to know if tripartite tribunals are more apt to adopt mediate solutions than unitary but collegial bodies whose decisions are equally unsupported by coercive enforcement. If so, the internal politics of a tripartite tribunal may be an important explanatory factor in its own right.

169 Declaration relating to Commitments, supra note 4, para. 7.

170 Arthur W. Rovine, formerly the U.S. Agent before the Tribunal, has stated publicly on a number of occasions that the replenishment obligation, as reinforced by supplemental agreements, is as secure as it is possible to make an obligation by the use of language intended to have that effect. The unstated implication of Rovine’s comment, however, is that there are limits to what drafting can accomplish; a party determined to repudiate an obligation may not in the end be able to escape liability, but it can surely impose the costs of enforcement on the other party. To be sure, Iran’s own interests would make repudiation of the replenishment obligation a very costly step. But I cannot imagine that Iran would continue voluntarily to fund an account dedicated to satisfying awards of a tribunal from which it had withdrawn.

171 For a discussion of the problems that may be encountered in enforcing such an award, see generally Delaume, , State Contracts and Transnational Arbitration, 75 AJIL 784 (1981)Google Scholar. Article IV, paragraph 3 of the Claims Settlement Agreement, supra note 4, provides: “Any award which the Tribunal may render against either government shall be enforceable against such government in the courts of any nation in accordance with its laws.” Although this provision could be construed as a waiver of sovereign immunity in proceedings to recognize and enforce an award of the Tribunal, it might on the other hand leave the immunity question to be determined “in accordance with” the laws of the nation in which enforcement is sought. Whether awards of the Tribunal will be treated as “foreign” awards for purposes of the UN Convention on Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 UST 2517, TIAS No. 6997, 330 UNTS 3, also remains to be determined. The reporters on the revised Restatement now being drafted cautiously comment that the Tribunal’s awards are enforceable “in the first instance” out of the Security Account, “[b]ut they may also be enforceable under the New York Convention.” Restatement of the Foreign Relations Law of the United States (Revised) §497, Reporters’ Note 6 (Tent. Draft No. 4, 1983). Legislation proposed by the Dutch Government would give Dutch nationality to the awards of the Tribunal, while restricting the scope of review in Dutch courts relative to other Dutch arbitral awards. The draft legislation may be found in Iranian Assets Litigation Rep. [see note 3 supra] 6889 (July 15, 1983).

172 Decision on the objections to Mr. N. Mangard as a member of the Iran-United States Claims Tribunal, lodged by the Islamic Republic of Iran, para. 4.3 (Ch. M. J. A. Moons, Appointing Authority, March 5, 1982) (on file with the author).

173 Id.

174 For Iran’s reaction to the decisions of the World Court in the Hostages case, see N.Y. Times, May 25, 1980, at 1, col. 5; id., Dec. 16, 1979, at 1, col. 5.

175 A recent work has attempted to catalog the defining characteristics of Western legal thought and the authors tentatively suggest the following: (1) the idea of progress; (2) legalism; (3) secularism; (4) sovereignty and statism; (5) rights, duties and individualism; and (6) logically formal rationality. Barton, J., Gibbs, J. Jr., Li, V. & Merrvman, J., Law in Radically Different Cultures 8–14 (1983)Google Scholar. Although these traits are not uniquely Western, their combination may be, id. at 14; several of them stand in sharp contrast to the official ideology of revolutionary Iran. Principle 2 of the Constitution of the Islamic Republic of Iran, supra note 149, declares:

The Islamic Republic is a system based on the belief in:

1. One and only one God (There is no God but God); appropriation to him [sic] of the faculty to rule and implement the divine law, and the necessity to obey His orders;

2. Divine inspiration and its fundamental role in the interpretation of laws.

176 See text at note 33 supra.

177 Interestingly, Iran is not the first state to have sent such signals to a claims tribunal in connection with the enforceability of local forum clauses. Nor is the Tribunal the first such tribunal, one suspects, that was influenced by the strength of a party’s feelings with regard to this question. Consider the comments of the dissenting British commissioner in the well-known Mexican Union Railway case:

There is one other matter to which I feel it my duty to refer. During the hearing the Mexican Agent, evidently acting under direct instructions from his Government, stated that the question of the Calvo Clause was a vital one to the Mexican Government and that if the Commission should take jurisdiction in this case, the Mexican Government would register a protest against such decision and would make a reservation as to its rights. I am unable to understand how the Mexican Government, after signing a Convention determining the powers of the Commission, can be justified in protesting against any decision at which they may arrive, unless, indeed, they suggest that the Commission has been acting corruptly.

The Mexican Agent proceeded further and referred to the attitude which the Mexican Government would adopt in the event of a hostile decision in this case, both with regard to the renewal of the mandate of the Commission—which in the absence of renewal expires next August—and towards the various companies which, having signed the Calvo Clause, had presented claims to the Commission. Such a communication might, perhaps, have properly been made privately to the British Agency, but I cannot see any object in making it publicly to the Commission except in the hope of influencing their decision by considerations entirely extraneous to the merits of the question in dispute.

It is a well-known historical fact that the numerous international commissions that have been set up during the last hundred years have never allowed themselves to be intimidated or browbeaten by any Government, however powerful or influential.

This Commission will certainly prove no exception to the rule. It is needless to add that any threat which may be thought to have been contained in the communication made to them has had no influence whatever upon the decision at which they have arrived. It might, therefore, be considered better to ignore the matter altogether, as was done by the President of the Commission at the time and by the British Agent in his reply.

Mexican Union Ry. Co. (UK v. Mex.), 5 R. Int’l Arb. Awards 115, 128–29 (1930).

Tact as much as conviction may explain the assurance that Mexican threats had no influence on the tribunal. Certainly, the evidence provided by the logic of the majority opinion in Mexican Union Railway makes one suspicious. As the dissenting commissioner demonstrated, the majority adopted a rule that it then failed to apply, misread the contract clause in question and ignored a provision of the compromis waiving the exhaustion of local remedies. Id. It is important in the present context to note that the jurisprudence concerning the Calvo Clause is marked by almost astonishing volte-faces by individual tribunals. Shea’s discussion of the jurisprudence of the British- Chilean Claims Commission, D. Shea, supra note 74, at 145–54, and the U.S.-Venezuelan Claims Commission, id. at 165–85, esp. 183–85. Individual opinions, even North American Dredging which has achieved leading case status, are marked by illogic and inconsistency. See id. at 212–14, 222–23. One balks again at ascribing so consistently dismal a record to the incompetence of presumably competent jurists. Is it not more persuasive to explain such results as attempts to avoid offense to the strongly held and irreconcilable positions of the states concerned?

178 See text at notes 111–116 supra.

179 See text at notes 76–77 supra.

180 Indeed, this difficulty with the North American Dredging rule was recognized even by its adherents. The British commissioner in the Mexican Union Railway case, who accepted the North American Dredging rule while disagreeing with the majority’s application of it, noted the unfortunate corollary of the principle that local remedies need not be exhausted if they were inadequate and ineffective:

[T]his and every other international commission would have to assume the odious task of deciding whether the machinery set up in the defendant State was really capable of remedying the wrong d o n e . . . . A procedure of this kind would inevitably cause far more international friction than the assumption of jurisdiction by the commission in respect of the claim itself.

Mexican Union Ry. Co., 5 R. Int’l Arb. Awards at 128 (Diss. Op.).

181 The decision is sharply criticized by Shea on this ground. D. Shea, supra note 74, at 211–12.

182 See text at notes 107–108 supra.

183 The European Commission on Human Rights in the Greek Case determined that as a result of the purge of 30 judicial officers in May 1968, as well as other measures directed at the independence of the judiciary, domestic remedies in Greece “could not be regarded as effective or sufficient.” Greek Case, 1968 Y.B. Eur. Conv. on Human Rights 690, 774. For a survey of other relevant cases, see Note, supra note 2, at 361–69.

184 From time to time, there has been express recognition of the sensitivity of a finding of this character. In Díaz v. Guatemala, the Central American Court of Justice actually declared itself incompetent to pronounce the “defamatory” judgment that Guatemalan courts and tribunals were incompetent and biased against aliens. 3 AJIL 737, 745 (1909). The British-Mexican Claims Commission in the El Oro Mining Co. case, one of the few decisions to uphold a claim of denial of justice, seemed to establish a special burden of proof applicable to such claims. The Commission opined: “It is evident that such a grave reproach can only be directed against a judicial authority upon evidence of the most convincing nature.” 5 R. Int’l Arb. Awards 191, 198 (1931). The opinions in the Chattin Claim (U.S. v. Mex.), 4 id. at 282 (1927), all make reference to the delicacy of denial of justice claims. Id. at 288 (van Vollenhoven); id. at 301 (Nielsen); id. at 311 (Fernández MacGregor).

185 Iran’s two letters to the International Court of Justice during the course of the Hostages case both referred to “the deep-rootedness and essential character of the Islamic Revolution of Iran.” 1979 ICJ Rep. 7, 10, 11; 1980 id. at 3, 8. The Preamble to the Constitution itself recites:

Our nation which during its revolutionary experience was cleansed of the mist and corrosion of the idolators and foreign ideological influences returned to the noble world view of Islam. And now it is on that basis that it is building its model (equal) society with Islamic norms, principles, and mission with its constitution that reflects the beliefs of the movements and conditions and values found in Islam.

Constitution of the Islamic Republic of Iran, Preamble, supra note 149, at 185. The Preamble also deals specifically with the role of the judiciary, characterizing it as “a vital matter.” Id. at 186.

[T]he creation of a judicial system based on Islamic justice and consisting of just judges who are acquainted with precise religious norms must be provided for. Because of the fundamental sensitivity and precision of this system in the Book, it is necessary that it be removed from all unusual relationships and connections.

Id. See Memorial of the United States, supra note 14, at 34.

186 Holtzmann Opinion, supra note 47, at 14 n.21.

187 See id. at 16–17.

188 See text at note 154 supra.

189 See text at notes 34–45.

190 Both Arbitrator Mosk and Arbitrator Holtzmann expressly stated that the claimants’ right to assert noncontractual claims based on theories such as quasi contract, unjust enrichment, quantum meruit, restitution or expropriation was unaffected by the result in the forum-clause cases. Mosk Opinion, supra note 47, at 9 n.9; Holtzmann Opinion, supra note 47, at 7. President Reagan, in his report to Congress on the progress of the claims settlement process, declared that the Tribunal’s refusal to find Iranian-forum clauses unenforceable “leaves U.S. claimants having such contract clauses with the possibility of establishing Tribunal jurisdiction on non-contractual grounds not subject to the exclusion.” Declaration of National Emergency with Respect to Iran: Message to Congress reporting on Recent Developments, 19 Weekly Comp. Pres. Doc. 637, 638 (May 9, 1983).

It should be noted that there may be difficulty in recharacterizing some claims in noncontractual form while fitting them within the categories set out in the Article II grant of jurisdiction, i.e., claims arising out of “debts, contracts (including transactions which are the subject of letters of credit or bank guarantees), expropriations or other measures affecting property rights.” Claims Settlement Agreement, Art. II, supra note 4. The problem, however, does not seem insurmountable. In the first place, the Tribunal might reasonably take the view that the language of the Article II grant is to be extended to all claims of economic loss not specifically excluded. This construction is supported by the expressed intention of the parties to settle “all” claims by their nationals against the opposing Government, and would permit the Tribunal to hear unjust enrichment, quantum meruit and other noncontractual claims without worrying whether the claim is one arising out of “debts . . . expropriations or other measures affecting property rights.” Declaration relating to Commitments, supra note 4, General Principle B. Alternatively, the Tribunal might consider an unjust enrichment claim or a quantum meruit claim one arising out of a “debt.” In at least one case, Chamber Two of the Tribunal has already upheld its jurisdiction over an unjust enrichment claim. Isaiah v. Bank Mellat, Case No. 219, AWD 35 –219–2 (March 30, 1983). Interestingly enough, the Chamber characterized as the “only difficult jurisdictional question” a problem involving continuity of nationality of the claim. Id., pt. III, at 6. The decision suggests a disinclination to parse closely the specific terms of the Article II grant and instead a preference for a more generous interpretation to effectuate the Tribunal’s purposes. But cf. Grimm v. Government of the Islamic Republic of Iran, AWD 25–71–1 (Feb. 11, 1983), summarized in 77 AJIL 649 (1983) (concluding that claim based on alleged failure to protect claimant’s husband was not a claim “arising out of . . . other measures affecting property rights”).

It will be interesting to see whether the Tribunal extends the more liberal approach to all business-related claims based on a violation of international law or on a denial of justice. In theory, even if their factual origin were in an alleged breach of contract by Iran, such claims would not be “claims arising under contract” within the meaning of the Article II exclusion. Again, in theory, the rights sought to be enforced would not be those deriving directly from the contract under its governing Law. They would instead be rights under international law, i.e., protection from arbitrary breaches of contract (Restatement (Second) of Foreign Relations Law, supra note 74, §193), and to a fair and effective forum in which to assert contractual rights. In a case involving a denial of justice, “the claimant’s complaint would be not that his contract was violated but that he had been denied justice. The basis of his appeal would be not a construction of his contract, save perchance in an incidental way, but rather an internationally illegal act.” North Am. Dredging Co., 4 R. Int’l Arb. Awards at 30.

191 Halliburton Co., Case No. 51, supra note 12, pt. III, at 7.

192 In theory, at least, there should not be serious concern that collateral estoppel effect would be given to a determination on the effect of a choice-of-forum clause. Although collateral estoppel effect might be given to a finding that the forum selection clause was valid under the contract’s governing law and even to a finding that the clause was an exclusive choice of forum, it remains for each court in which suit is brought to determine under its own law whether a valid and exclusive choice of forum’ should operate as a bar to suit in that court. See text at note 68 supra. In theory, any determination the Tribunal might make that Iranian-forum clauses were binding would be a determination under the relevant rules of public international law, the lex fori of the Tribunal. See text at notes 70–75 supra. Any determination that would be made by a municipal tribunal would be made under its own Law. Id. For a recent decision suggesting that, in actuality, the issue may be a great deal more complicated, see Tracomin S.A. v. Sudan Oil Seeds Co. Ltd., [1983] 1 All E.R. 404, 1983 Com. L.R. 17 (Q.B. Div’l Ct.).

193 Consider the comment of a highly experienced arbitrator with respect to some early procedural decisions by the Tribunal:

[Directive No. 1 is also important and helpful because it provides several subtleties that demonstrate this panel’s savvy. To begin with, the deftness with which the Tribunal avoided deciding what might otherwise have been tough questions becomes evident. . . .

The success of any third-party mechanism depends largely on its ability to convince the disputants to compromise on as many issues as possible, thus freeing the dispute settlers to resolve only those questions that are remaining. Obviously, the talents of this experienced body of arbitrators have already been brought to bear on the two governments that created the mechanism.

Aksen, The Iran-U.S. Claims Settlement Tribunal and the UNCITRAL Arbitration Rules—An Early Comment, in The Art of Arbitration: Essays on International Arbitration Liber Amicorum Pieter Sanders 1, 5 (Schuttsz & Van den Berg eds. 1982).

The Tribunal’s decision on the disposition of interest earned on the Security Account provides striking confirmation of its preference for resolving questions by encouraging the parties to settle them, as well as of its ingenuity at devising solutions that protect the substance of a party’s position without adopting that party’s views. In that case, Iran argued that the interest earned on the account should be paid to it; the United States argued that the interest should be added to the Security Account. Pending resolution of the issue by the Tribunal, the Escrow Agent had created a separate account for the interest.

The Tribunal determined that the interest should continue to be paid into the separate account failing any subsequent agreement to the contrary between the parties. Iran, however, was to be permitted access to the account without U.S. consent for one purpose only: discharge of the replenishment obligation. Decision with regard to issues arising in connection with the Establishment and Operation of the Security Account, Case No. A/1 (Aug. 3, 1982), reprinted in 22 ILM 591, 591–95 (1983). It appears that the Tribunal again reached a resolution that protected U.S. interests without adopting U.S. positions.

194 There are two assumptions I am making here that should be stated explicitly. I assume that the obligation of the United States under the Algiers Declaration to “terminate” all litigation against Iran in U.S. courts is coextensive with the jurisdiction of the Claims Tribunal. Similarly, I assume that paragraph 2 of Article VII of the Claims Settlement Agreement, which provides that “claims referred to the Tribunal shall from the date of filing” with the Tribunal be excluded from the jurisdiction of any other court, has no application once the Tribunal determines it has no jurisdiction over a given claim.

Both assumptions seem well founded. The Algiers Declaration accomplished a substitution of forums; it did not (except in the case of the hostages’ own claims; Declaration relating to Commitments, supra note 4, para. 11) accomplish either a waiver of claims by U.S. nationals or a confirmation of the jurisdiction of the Iranian courts. This is clearly implied by the structure of the overall settlement as well as of the specific language of the Algiers Declaration. It is “through the procedures provided in the Declaration, relating to the Claims Settlement Agreement,” that the United States agreed to terminate all legal proceedings in its courts; the obligation of the United States is “to prohibit all further litigation based on such claims, and to bring about the termination of such claims through binding arbitration.” Declaration relating to Commitments, supra note 4, General Principle B. The link between the termination of litigation and the arbitration of claims is thus explicit.

The U.S. executive branch, of course, has been committed to this interpretation from a very early stage, see Exec. Order 12294, Feb. 24, 1981, 46 Fed. Reg. 14,111 (“suspending” claims that may be subject to the jurisdiction of the Tribunal); and U.S. courts likewise have assumed that claims not subject to the Tribunal’s jurisdiction may be heard in U.S. courts. See, e.g., Itek Corp. v. First Nat’l Bank of Boston, 704 F.2d 1, 9 (1st Cir. 1983).

Dicta in several decisions by the Tribunal support the conclusion that claims excluded from its jurisdiction may be pursued in the U.S. courts, as well as in the courts of other countries. In a number of cases, Iran has filed suit in Iranian courts seeking relief against American claimants before the Tribunal. In some cases, the Iranian claim not only could be, but had in fact been, filed with the Tribunal as a counterclaim, thus raising a direct conflict with Article VII, paragraph 2, quoted above. The Tribunal has requested that Iran seek a stay of the Iranian court proceedings, noting that the Iranian claim was from the date of filing with the Tribunal “excluded from the jurisdiction of the Courts of Iran . . . unless and until the Tribunal decides that it has no jurisdiction over it.” Ford Aerospace & Communications Corp. v. Government of Iran and Bank Markazi, Iran, Case No. 93, ITM 16–93–2, Iranian Assets Litigation Rep. 6591, 6592 (April 27, 1983); accord Rockwell Int’l Systems, Inc. v. Government of Iran, Ministry of Defense, Case No. 430, ITM 17–430–1, id. at 6592, 6593 (May 5, 1983). The italicized language clearly implies that Article VII, paragraph 2 is no bar to the litigation of claims over which the Tribunal has declined jurisdiction. (It would still be possible for the Tribunal to distinguish between renewed litigation in U.S. courts and in foreign courts, though the basis for such a distinction is weak. At the very least, however, the Tribunal seems to have committed itself to a position permitting the litigation of excluded claims in foreign courts.)

The Tribunal’s decisions in the forum-clause case have figured tangentially in U.S. litigation involving standby letters of credit. U.S. companies seeking preliminary relief enjoining payment to Iran on standby letters of credit argued that they would suffer irreparable injury were the injunctions not granted. In lower court decisions preceding the Tribunal’s decision on Nov. 5, 1982 in Ford Aerospace, Case No. 159, supra note 12 (see text at note 43 supra), preliminary injunctions were granted premised largely on the view that the plaintiff companies had no alternative forum open to them in view of the presence of Iranian-forum clauses in their contracts with various Iranian Government agencies. See Rockwell Int’l Systems v. Citibank, Nos. 82–7864, 82– 7866, 83–7216, 83–7228, 83–7256, slip op. at 8 (2d Cir. Oct. 11, 1983); Itek Corp. v. First Nat’l Bank of Boston, 511 F. Supp. 1341, 1349 n.17 (D. Mass; 1981), vacated and remanded, 704 F.2d 1 (1st Cir. 1983). The Tribunal’s ruling in Ford Aerospace, holding that it had jurisdiction over claims arising under a less than comprehensive forum selection clause, thus ironically appeared to prejudice the position of the plaintiffs in their still pending litigation in the U.S. courts. When the Iranian defendants made this argument, however, in the Rockwell International case, they were turned aside. In Rockwell International, the Second Circuit suggested that although Ford Aerospace might have removed any barrier to litigation of the underlying contract dispute before the Tribunal, it remained unclear whether disputes related to the letter of credit were subject to the Tribunal’s jurisdiction. Rockwell Int’l Systems v. Citibank, supra, slip op. at 8–10. In Itek, however, the First Circuit, having vacated the preliminary injunction for other reasons, suggested that the district court on remand should consider the Ford Aerospace holding in determining whether to reinstate the injunction. 704 F.2d at 12.

195 This issue was not, of course, directly involved in the Iranian-forum clause cases where it was the claimants, not Iran, who sought relief from their engagements. But consideration of the changed circumstances argument would inevitably have led the Tribunal to consider the implications of the objective character of the rebus sic stantibus doctrine in relation to state contracts. It should be noted that although Article 62 of the Vienna Convention on the Law of Treaties incorporates the view that the rule has an objective character, Waldock, Second Report on the Law of Treaties, [1963] 2 Y.B. Int’l L. Comm’n 36, 84–85, UN Doc. A/CN.4/SER.A/1963/Add.1, several members of the ILC from developing countries and the Eastern bloc expressed the view that a fundamental change in governmental policy was a ground for relief, 1 id. at 142 (Yaseen), 149 (Bartos), 145 (Tunkin), 147 (Elias), 149–50 (Jiménez de Aréchaga), and 150 (Pal), UN Doc. A/ CN.4/SER.A/1963.

196 Stein, Contempt, Crisis, and the Court: The World Court and the Hostage Rescue Attempt, 76 AJIL 499 (1982).

197 For example, it is almost impossible to believe that at the time that the Algiers Accords were signed, Iranian authorities believed that the Article II exclusion reached cases where there was no choice-of-forum clause at all or where the clause provided for arbitration in Paris. Nothing in Iran’s presentation to the Tribunal, in fact, supported the idea that Iranian authorities actually entertained a notion so far distant from that implied by the language of the Article II exclusion. Yet Iran argued that such cases were outside the Tribunal’s jurisdiction. Indeed, the only material put forward by the Iranian respondents that cast direct light on the subjective intentions of the Majlis indicates that its concerns were much more narrowly focused than was suggested by Iran’s position before the Tribunal. The excerpt from the Majlis debate concerned with the forumclause question shows that the Majlis identified the EDS contract as an example of the kind of case with which it was concerned. Memorial of the Iranian Respondents, supra note 24, Attachment 1. Article 23.2 of that contract provided that “disputes should be settled according to the Iranian law through referring to the competent courts.” Id. Mr. Ansari, who urged the adoption of the Majlis resolution on the question, stated that its purpose was “to exclude the cases where in the text of the contract now under dispute between Iran and the United States, it has been stipulated that competent Iranian courts are acceptable.” Id. (emphasis added).

198 It would be interesting to know whether the distinction between “in accordance with the Majlis position” and “in response to the Majlis position” translates directly into Farsi.

199 See text at notes 178–189 supra.

200 Of course, the decisions in the forum-clause cases constitute only part of the total flow of communication between the Tribunal and the parties. The lessons the parties derive from any particular decision will be colored by that overall flow of communication. If other conduct by the Tribunal tends to indicate that it will submit to coercion and accept positions advanced in bad faith, those aspects of the forum-clause decisions capable of being interpreted on similar lines are likely to be emphasized.

201 Postscript: The dearth of scholarly attention to the forum-clause decisions that I bemoan in the opening paragraphs of this article has been partially remedied by the very recent appearance of three surveys of the Tribunal’s work: Stewart, & Sherman, , Developments at the Iran-United States Claims Tribunal: 1981–1983, 24 Va. J. Int’l L. 1 (1983)Google Scholar; von Mehren, , The Iran-U.S.A. Arbitral Tribunal, 31 Am. J. Comp. L. 713 (1983)CrossRefGoogle Scholar; Lowenfeld, , The Iran-U.S. Claims Tribunal: An Interim Appraisal, 38 Arb. J. 14 (1983)Google Scholar. The most extensive appraisal of the forum-clause decisions themselves appears in Professor Lowenfeld’s article, id. at 16–21, to which readers interested in a somewhat different perspective on the decisions are referred.