¹ The Iran-United States Claims Tribunal was established in 1981 pursuant to the Declaration of the Government of the Democratic and Popular Republic of Algeria (hereinafter General Declaration) and the 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 (hereinafter Claims Settlement Declaration), collectively referred to as the Algiers Accords. For the text of the Accords, see 1 Iran-United States Claims Tribunal Reports [hereinafter Iran-U.S. C.T.R.] 3(1981–2), 75 AJIL 418(1981). As to citation of awards by the Tribunal, see note 123 infra.

As to the Tribunal, see generally Brower & Davis, The Iran-United States Claims Tribunal After Seven Years: A Retrospective View from the Inside, 43 Arb. J. 16 (1988); The Iran-United States Claims Tribunal 1981–1983 (R. Lillich ed. 1984) [hereinafter Iran-United States Tribunal]; Stewart, The Iran-United States Claims Tribunal: A Review of Developments 1983–84, 16 L. & Pol’y Int’l Bus. 677 (1984); and Selby & Stewart, Practical Aspects of Arbitrating Claims Before the Iran-United States Claims Tribunal, 18 Int’l Law. 211 (1984).

² Lillich, Preface to The Iran-United States Claims Tribunal, supra note 1, at vii.

³ Holtzmann, Some Lessons of the Iran-United States Claims Tribunal, in 1988 Private Investors Abroad—Problems and Solutions in International Business 16-5 (J. Mossed.). Indeed, decisions of the Tribunal are cited in a number of Reporters’ Notes to the Restatement (Third) of the Foreign Relations Law of the United States (1987).

⁴ A complete discussion of the precedential value that should be given the work of the Tribunal would have several dimensions. The Tribunal’s work is potentially significant for various reasons: it is the first major claims tribunal since the interwar period; its orders, awards and much of its workings are open to public (hence scholarly) examination; its docket of approximately 3,850 cases involves issues such as exchange-control regulation, expropriation and expulsion; and it is conducting its work in general in accordance with the UNCITRAL Arbitration Rules (see infra notes 26 and 110). This potential significance has been challenged on the ground that combative arbitrators have politicized both the procedural and the substantive decisions of the Tribunal. See also M. Sornarajah, The Pursuit of Nationalized Property 202 (1986) (“the jurisprudential value of the awards … [is] open to doubt on the ground that they were based on an agreement settling a political dispute and that there was an effort made by the Tribunal to approach issues in a manner favouring compromise”). The significance has also been challenged on the ground that the third-country chairmen have all been drawn from Western countries and thus bring with them the jurisprudential predispositions of their cultures. Both of these challenges are beyond the scope of this article and deserve a separate, extended response. To state my views briefly, however, I do not believe either objection stands up to scrutiny or is substantial. As to the former, I believe the combativeness of the Iranian arbitrators did not politicize substantive decisions, although it is true that, procedurally, extensions of time were more frequently granted to the Iranian parties than many U.S. claimants would have desired. The ingenuity of the Iranians, if anything, only tested and pushed at every aspect of the UNCITRAL Rules. The Tribunal met such tests and, in my opinion, has shown the workability and value of the Rules. On the Tribunal’s work in one area of arbitral procedure, see Caron, Interim Measures of Protection: Theory and Practice in Light of the Iran-United States Claims Tribunal, 46 Zeitschrift für ausländisches öffentliches Recht und Völkerrecht 465 (1986).

As to the latter objection, the third-country arbitrators have come from Western countries (two Swedes, two Frenchmen, one Swiss, one Dutchman, one German, one Italian and one Finn), but Iran (or arbitrators appointed by Iran) agreed to the selection of seven of the nine. More importantly, the charge of Western bias is directed really at only one, albeit emotional, issue—expropriation. Even then, the issue in controversy is not what constitutes a taking or whether compensation is due for a taking, but the appropriate standard for determining the amount of compensation.

As the precedential value of an international decision should turn upon its persuasiveness to the next panel, the challenge posed by the uncertainty about the nature of the Tribunal is subtle and indirect. I would speculate that the reluctance of some private international arbitrators to rely on the Tribunal’s decisions reflects their intuitive conclusion that the Tribunal involves the classic interstate arbitral process and the further intuitive conclusion that the process is therefore particularly politicized. In this sense, a complete discussion of the precedential value of Tribunal awards will require further examination of the challenges to the integrity of the process described above.

⁵ See, e.g., Decisions of the Iran-United States Claims Tribunal, Remarks of David Lloyd Jones, 78 ASIL Proc. 225, 226 (1984).

⁶ During the preparation of this study, I generally found the distinction between public and private international arbitration to be held quite strongly, particularly among civil law scholars accustomed to a more systematic approach to law. Many scholars who stood by it were not altogether sure precisely what factors made an arbitration interstate rather than private, or what insights were gained by the distinction. For many, their intuitive judgment was that arbitrations before the Tribunal have an interstate nature. Another response, reflecting the difficulty of the question more than an answer, was to say that the arbitrations are of a “mixed” or “hybrid” nature.

⁷ Argentine-Chile Frontier Case, 16 R. Int’l Arb. Awards 109 (1966) (McNair, Kirwan & Papworth arbs.).

⁸ The term “private international arbitration” is used in this article to encompass international commercial arbitration, maritime arbitration and other similar manifestations of private arbitration. On the ICC, see W. Craig, W. Park & J. Paulsson, International Chamber of Commerce Arbitration (1983). See generally Stein & Wotman, International Commercial Arbitration in the 1980s: A Comparison of the Major Arbitral Systems and Rules, 38 Bus. Law. 1685 (1983).

⁹ See infra text at notes 122–52.

¹⁰ See infra text at notes 178–86.

¹¹ Mark Dallal v. Bank Mellat, [1986] 1 Q.B. 441, 2 W.L.R. 745, 1 All E.R. 239, noted in Fin. Times (London), Aug. 21, 1985, at 25, col. 1. See also Kunzlik, Public International Law—Cannot Govern a Contract, Can Authorise An Arbitration, 45 Cambridge L.J. 377 (1986).

¹² Ministry of Defense of Islamic Republic of Iran v. Gould, Inc., 887 F.2d 1357 (9th Cir. 1989). On the district court order of Judge R. A. Gadbois, Jr., No. 87-03673 (CD. Cal. Jan. 14, 1988), see Lewis, What Goes Around Comes Around: Can Iran Enforce Awards of the Iran-U.S. Claims Tribunal in the United States?, 26 Colum. J. Transnat’l L. 515, 517 n.14 (1988).

¹³ Hardenberg, The Awards of the Iran-US Claims Tribunal Seen in Connection with the Law of the Netherlands, 1984 Int’l Bus. Law. 337, translated from De Uilspraken van het Iran-United States Claims Tribunal naar Nederlands recht bezian, Nederlands Juristenblad, Feb. 11, 1984, at 167.

¹⁴ Van den Berg, Proposed Dutch Law on the Iran-United States Claims Settlement Declaration, A Reaction to Mr. Hardenberg’s Article, 1984 Int’l Bus. Law. 341, translated from Wetsontwerp Iran-United Slates Claims Tribunal, Een reactie, Nederlands Juristenblad, Feb. 11, 1984, at 170.

¹⁵ Lake & Dana, Judicial Review of Awards of the Iran-United States Claims Tribunal: Are the Tribunal’s Awards Dutch?, 16 L. & Pol’y Int’l Bus. 755 (1984).

¹⁶ Stein, Jurisprudence and Jurists’ Prudence: The Iranian-Forum Clause Decisions of the Iran-United States Claims Tribunal, 78 AJIL 1, 18 (1984). The thrust of the section that contains this quote, however, is that interpretation of the Algiers Accords is a question of public international law.

¹⁷ Fox, States and the Undertaking to Arbitrate, 37 Int’l & Comp. L.Q. 1, 3 (1988).

¹⁸ In the case of the Tribunal, the circumstances were disagreement as to a lump sum settlement amount, coupled with the urgent need to conclude the Accords.

On the general trend toward lump sum settlement, see R. Lillich & B. Weston, International Claims: Their Settlement by Lump Sum Agreements (1975); and Lillich & Weston, Lump Sum Agreements: Their Continuing Contribution to the Law of International Claims, 82 AJIL 69(1988).

¹⁹ See, e.g., Buxbaum, The Role of Public International Law in International Business Transactions, in Public International Law and the Future World Order, Liber Amicorum in Honor of A. J. Thomas, Jr. 16-1 (J. J. Norton ed. 1987); Academic Workshop: Should We Continue to Distinguish Between Public and Private International Law?, 79 ASIL Proc. 352 (1985); and Paul, The Isolation of Private International Law, 7 Wis. Int’l L.J. 149 (1988).

²⁰ Although one’s conclusions regarding the validity of a given arbitral process will often correlate with those regarding enforcement, they need not do so. See discussion on ICSID in text at notes 34–38 infra.

²¹ Parties are motivated to enter into such arrangements municipally because they perceive the process as more likely to be subject to their control and, perhaps, as faster, less expensive and more confidential than that available in the courts. The key legal issue concerns what external limits the relevant municipal legal system places on the freedom of the parties to contract in this way.

²² Although such autonomy obtains in most municipal legal systems, it is characteristic of municipal arbitration statutes in many Latin American states that even if the parties include a compromissory clause in a contract, the initiation of arbitration must be reviewed and approved by a municipal court. See Garro, Enforcement of Arbitration Agreements and Jurisdiction of Arbitral Tribunals in Latin America, 1 J. Int’l Arb. 293, 310–15 (1984).

²³ The parties, in defining the internal world, may make three significant choices regarding “law.” First, the parties may designate the law under which the dispute will be decided. Second, the parties may designate the legal system that supervises the arbitral process. Note that it is essential to distinguish between the legal system governing the arbitration as a process and the law applied by the arbitrators to the substance of the dispute to be resolved. Confusion over this distinction is often engendered by the common reference to the legal system governing the arbitration as “the law applicable to the arbitration.” Third, the parties may also stipulate the rules of procedure to be used by the tribunal by choosing the procedural law of a state, or, as is more commonly done, the rules of an arbitral institution such as the ICC. All three choices of law are separate and not necessarily the same.

²⁴ This internal/external model is expressed as a part of the doctrinal view of others. Clive Schmitthoff, for example, writes, “From the viewpoint of doctrine, arbitration contains two elements, a contractual and a judicial element.” Schmitthoff, The Supervisory Jurisdiction of the English Courts, in International Arbitration: Liber Amicorum for Martin Domke 289, 289 (P. Sanders ed. 1967). The contractual element springs from the will of the parties and is manifested in the internal world of the arbitration. The judicial element arises in every legal system that is touched by the interaction of the arbitration and the world external to it. Hazel Fox recently wrote, “The institution of arbitration, on the one view, derives its force from the agreement of the parties; on another view, from the State as supervisor and enforcer of the legal process.” Fox, supra note 17, at 1. The internal/external paradigm, at least for the purposes of this study, accurately models the arbitral process.

²⁵ Professor Park has stated that “an arbitrator must bow to mandatory norms of the country in which he sits.” Park, The Lex Loci Arbitri and International Commercial Arbitration, 32 Int’l & Comp. L.Q. 21, 23 (1983). It may be more accurate to state that it is to the intent of the parties that the arbitrator must bow. Local law very rarely coerces the arbitrator. Instead, by indicating that a motion to set aside would likely be granted, local law encourages the parties to draft an arbitration agreement that will result in compliance of their arbitration with the mandatory provisions of local law. Indeed, Article V(1)(d) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, opened for signature June 10, 1958, 21 UST 2517, TIAS No. 6997, 330 UNTS 3 [hereinafter New York Convention], states that enforcement of an award can be refused if the “composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties.”

²⁶ For example, recognizing that the parties would want the award to be enforceable in the external world, the UNCITRAL Arbitration Rules, reprinted in 15 ILM 701 (1976) [hereinafter UNCITRAL Rules], an internal set of arbitral rules that parties may adopt, in Article 1(2) provides that those contractual rules are to be superseded by any provision of municipal law that the governing legal system regards as “mandatory.”

²⁷ Because the focus of this article is upon the external view of the process rather than party control, interstate arbitration for the purposes of this article could be ad hoc or within the embrace of an institution such as the International Court of Justice. Although the extent of party control over those processes differs greatly, both types of proceedings are interstate arbitration in the sense that jurisdiction remains consensual.

²⁸ See, e.g., 1 J. G. Wetter, The International Arbitral Process—Public and Private, at xxiv (1979) (“Commercial lawyers regard arbitrations between States as wholly irrelevant; and public international law teachers, advocates and officials view commercial arbitration as an essentially alien process …”). However, there is a small group of lawyers and arbitrators who serve in both types of proceedings.

²⁹ The interstate arbitral process is governed by international law by definition. State parties could agree to remove the dispute entirely from the public international level. For example, state parties in their arbitration agreement could waive their sovereignty and specify that the legal system of a third country will govern the arbitration, just as the latter municipal system might govern private arbitration occurring in that third country. As will be seen, this is precisely what this article contends that Iran and the United States did in the case of the Tribunal. Such an action should be distinguished from those instances in the past when heads of state served as arbitrators of disputes. The arbitration in these cases remained governed by the international legal system. For example, the King of Spain was arbiter in 1906 of a boundary dispute between Honduras and Nicaragua. Nicaragua claimed the award to be a nullity under public international law, an allegation ultimately reviewed and rejected by the International Court of Justice. See Arbitral Award Made by the King of Spain (Hond. v. Nicar.), 1960 ICJ Rep. 192 (Judgment of Nov. 18).

³⁰ Indeed, this customary practice was so involved in arbitrations in the first half of this century that international legal scholarship devoted a great deal of energy to its codification. See, e.g., Carlston, Codification of International Arbitral Procedure, 47 AJIL 203 (1953).

³¹ See generally W. M. Reisman, Nullity and Revision: The Review and Enforcement of International Judgments and Awards (1971). Of course, the problem with this right is that often no international court has jurisdiction to review the merits of a state’s declaration of nullity; thus, the declaration in effect becomes a justification for that state’s refusal to comply with the award.

³² For an example of corruption in modern times, see the discussion of the U.S.-Venezuelan Claims Commission (1866–1888), 2 J. B. Moore, International Arbitrations to Which the United States Has Been a Party 1659–92 (1898).

³³ See W. M. Reisman, supra note 31, at 421.

³⁴ Convention on the Settlement of Investment Disputes between States and Nationals of Other States, opened for signature Aug. 27, 1965, 17 UST 1270, TIAS No. 6090, 575 UNTS 159 [hereinafter ICSID Convention]. ICSID is unlike classical interstate arbitration in that one of the parties is likely private. In this sense (and see further text at note 216 infra), ICSID, like the Tribunal, is an institution that reflects developments not modeled by the traditional distinction. The ICSID Convention, however, nonetheless stands as a valid example of the proposition in the text because the means of reviewing the validity of awards is decided by the mechanisms provided for in the treaty, and not by reliance on or reference to customary international law doctrines such as declarations of nullity.

³⁵ ICSID Convention, supra note 34, Art. 52. For the most recent example of such a nullification proceeding, see Amco Asia Corp. v. Republic of Indonesia, No. ARB/81/1: On the Application for Annulment Submitted by the Republic of Indonesia Against the Arbitral Award Rendered on November 20, 1984 (Ad Hoc Committee decision of May 16, 1986, nullifying in part the award on the merits), reprinted in 25 ILM 1441 (1986). For further proceedings in the case, see 83 AJIL 106 (1989).

³⁶ ICSID Convention, supra note 34, Art. 53(1).

This issue was raised vividly in the recent Judgment of the ICJ on jurisdiction in Military and Paramilitary Activities in and against Nicaragua (Nicar. v. U.S.), Jurisdiction and Admissibility, 1984 ICJ Rep. 392 (Judgment of Nov. 26). The United States has refused to recognize the proceedings of the Court on the ground that the Court exceeded its jurisdiction. See Reisman, Has the International Court Exceeded its Jurisdiction?, 80 AJIL 128 (1986). The legal issue is whether or not the United States displaced its customary right to nullify an award for this reason by its agreement in Article 94(2) of the UN Charter “to comply with the decision of the International Court of Justice in any case to which it is a party.” See also W. M. Reisman, supra note 31, at 420–23.

³⁷ ICSID Convention, supra note 34, Art. 54(1). See, e.g., Liberian E. Timber Corp. v. Government of Republic of Liberia, 650 F.Supp. 73 (S.D.N.Y. 1986).

³⁸ See, e.g., Maritime Int’l Nominees Establishment v. Republic of Guinea, 693 F.2d 1094, 1100 (D.C. Cir. 1982), cert, denied, 464 U.S. 815 (1983) (distinguishing between U.S. federal court jurisdiction to enforce and jurisdiction generally over ICSID proceedings). See generally Delaume, ICSID Arbitration and the Courts, 77 AJIL 784 (1983).

³⁹ Mann, Lex Facit Arbitrum, in International Arbitration, supra note 24, at 157, 159. The de-localized view of arbitration, which challenges Dr. Mann’s statement, is considered in the text at notes 50–65 infra.

⁴⁰ The parties may confuse this general rule by, for example, expressly providing for a lex arbitri different from that of the designated place of the arbitration, or by holding all proceedings in, or rendering the award in, a country other than the country of the designated place of arbitration. See Mann, Where Is an Award ‘Made’?, 1 Arb. Int’l 107 (1985).

⁴¹ See Mann, supra note 39.

⁴² Park, supra note 25, at 23.

⁴³ Hirsch, The Place of Arbitration and the “Lex Arbitri,” 34 Arb. J. 43, 44 (1979).

⁴⁴ Other dimensions to governance of the arbitral process exist and the courts of the place of arbitration may be requested to intervene in arbitral proceedings in such other ways. These other relationships generally involve securing judicial assistance in furtherance of the arbitral proceedings, including, inter alia, the appointment of arbitrators and the production of evidence. Generally such matters (in particular, matters relating to the composition of the tribunal) are only within the competence of the courts of the place of arbitration. However, assistance in areas such as interim measures might be available to the parties before courts other than those of the place of arbitration. Finally, it is normally reserved to the courts of the place of arbitration to decide questions about liability of the arbitrators to the parties and, not as exclusively, liability of the parties to the arbitrators. The approaches of the various municipal systems on these more detailed questions vary considerably. See generally Delaume, Court Intervention in Arbitral Proceedings, in Resolving Transnational Disputes Through International Arbitration 195 (T. Carbonneau ed. 1984) [hereinafter Resolving Disputes].

⁴⁵ Courts in the United States, for example, were hostile at one time to arbitration. See, e.g., United States Asphalt Ref. Co. v. Trinidad Lake Petroleum Co., 222 F. 1006 (S.D.N.Y. 1915). As caseloads have increased in the United States, however, hostility has given way to encouragement. See Burger, Isn’t There a Better Way?, 68 A.B.AJ. 274, 277 (1982).

⁴⁶ For example, until quite recently, this second municipal law approach was exemplified by the law of England and Commonwealth countries that followed English practice. This second approach, known as the “special case” or “case stated” procedure, involves much more extensive judicial supervision and control of the arbitration to ensure not only fundamental fairness but also legally correct results. Under the case-stated procedure, either party may demand that the arbitral panel submit a question of law or fact to the courts. The courts may then hold a hearing with full argument from which appeal may be made. The grounds upon which the court addresses the validity of an award are thus considerably broader. However, the approach is no longer favored in the United Kingdom, having been replaced by the 1979 Arbitration Act, a law that moves toward the third approach—an arbitral process substantially more independent of judicial control.

See Mann, Some Recent Developments of the English Law of Arbitration, in Ius Inter Nationes: Festschrift für Stefan Riesenfeld 187, 190 (1983). See also Park, The Influence of National Legal Systems on International Commercial Arbitration: Recent Developments in English Arbitration Law, in Resolving Disputes, supra note 44, at 80; Lord Hacking, Where We Are Now: Trends and Developments Since the Arbitration Act [1979], 2 J. Int’l Arb. 7 (1985); Jaffe, The Judicial Trend Toward Finality of Commercial Arbitral Awards in England, 24 Tex. Int’l L.J. 67 (1989); and Thomas, The Antaios: The Nema Guidelines Reconsidered, 1985 J. Bus. L. 200.

⁴⁷ See generally Carbonneau, American and Other National Variations on the Theme of International Commercial Arbitration, 18 Ga. J. Int’l & Comp. L. 143 (1988) (discussing the evolution of the French, British, Canadian and American approaches).

⁴⁸ For example, an arbitral award rendered in the United States may be vacated under § 10 of the U.S. Arbitration Act:

(a) Where the award was procured by corruption, fraud, or undue means.

(b) Where there was evident partiality or corruption in the arbitrators ….

(c) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing … or in refusing to hear evidence ….

(d) Where the arbitrators exceeded their powers ….

9 U.S.C. §10(1988).

⁴⁹ UNCITRAL Model Law on International Commercial Arbitration, Art. 34, adopted June 21, 1985, reprinted in 24 ILM 1302, 1311 (1985) [hereinafter UNCITRAL Model Law]. See Report of the U.N. Commission on International Trade Law on the Work of its Eighteenth Session, 40 UN GAOR Supp. (No. 17), UN Doc A/40/17, Ann. 1 (1985). See generally H. Holtzmann & J. Neuhaus, A Guide to the Uncitral Model Law on International Commercial Arbitration (1988); McNerney & Esplugues, International Commercial Arbitration: The UNCITRAL Model Law, 14 B.C. Int’l & Comp. L. Rev. 47 (1986); Herrmann, UNCITRAL Adopts Model Law on International Commercial Arbitration, 2 Arb. Int’l 2 (1986); and Broches, The 1985 UNCITRAL Model Law on International Commercial Arbitration: An Exercise in International Legislation, 18 Neth. Y.B. Int’l L. 3 (1987).

On previous regional efforts in Latin America and Europe at a uniform municipal model arbitration law, see Domke, International Arbitration of Commercial Disputes, in 2 Institute on Private Investments Abroad 131, 136–39 (1960).

That the “fundamental fairness” approach is dominant should not be taken to mean that other approaches to municipal governance of the arbitral process do not exist at present. In particular, arbitration in the socialist countries tends to remain very closely supervised by the courts.

⁵⁰ The arbitration alternative is particularly attractive for smaller cases where the often time-consuming procedural guarantees and appeal structure of a court system are not of particular importance to the parties.

⁵¹ Similarly, domestic labor arbitration, particularly labor grievance arbitration, arguably “is not a substitute for litigation … [but] rather, a device by which the parties agree to accept the judgment of a third party instead of fighting the issues out on the picket lines.” Brief for Petitioner 32, Textile Workers Union of Am. v. Lincoln Mills of Ala., 353 U.S. 448 (1957).

⁵² Smit, The Future of International Commercial Arbitration: A Single Transnational Institution?, 25 Colum. J. Transnat’l L. 9, 10 (1986) (“Rather than permit international disputes to be settled in national courts, many parties often prefer to submit them to a tribunal that is not part of the governmental structure of a particular state”; id. at 9); de Vries, International Commercial Arbitration: A Contractual Substitute for National Courts, 57 Tul. L. Rev. 42 (1982); and Kerr, Commercial Dispute Resolution: The Changing Scene, in Liber Amicorum for Lord Wilber-force 111, 128 (M. Bos & I. Brownlie eds. 1987).

⁵³ The generally recognized expertise of English courts in maritime matters is an exception.

⁵⁴ In international commercial arbitration, the necessary reliance on foreign counsel can be greatly reduced. Even if a foreign law is applicable to the substance of the dispute, the normal counsel to the parties usually can operate within the arbitral procedure adopted, generally are better suited to deal with the factual basis of the case and, thus, often need to involve foreign counsel only to advise on selected points of the applicable law or supervising legal system.

⁵⁵ Moreover, because the motivations for entering into international and wholly municipal commercial arbitration differ, there can be important differences in the two processes and in the directions in which the processes are evolving. For example, because international commercial arbitration can be the only alternative and large amounts may be in dispute, the parties—rather than desiring a streamlined process to ensure speed and reduce costs, as is often the case stated in the municipal context—may seek to design an arbitral process that quite resembles court proceedings, e.g., by providing for discovery or even appeal.

⁵⁶ The movement toward an anational system for private international arbitrations has been the subject of a great deal of commentary in recent years. See, e.g., Paulsson, Arbitration Unbound: Award Detached from the Law of its Country of Origin, 30 Int’l & Comp. L.Q. 358 (1981); Park, supra note 25. The movement has a number of aims. One is that the legal system of the place of arbitration should no longer govern the arbitral process. Rather, it is argued that the system where enforcement is sought should govern. Another aim is development of a substantive law that is non-national, the “lex mercatoria.” See Lando, The “Lex Mercatoria” in International Commercial Arbitration, 34 Int’l & Comp. L.Q. 747 (1985); and Cremades & Plehn, The New “Lex Mercatoria” and the Harmonization of the Laws of International Commercial Transactions, 2 B.U. Int’l L.J. 317 (1984). For recent critical discussions, see Mustill, The New “Lex Mercatoria”: The First Twenty-Five Years, in Liber Amicorum for Lord Wilberforce, supra note 52, at 149; Highet, The Enigma of the Lex Mercatoria, 63 Tul. L. Rev. 613 (1989). The anational arbitration system is similar to the so-called autonomous theory of the nature of private international arbitration. See J. Rubellin-Devichi, L’Arbitrage; nature juridique, droit interne et droit international privé (1965). In essence, the autonomous theory asserts that private parties may take the place of a state in establishing regimes for the resolution of certain disputes. Yet arbitration often depends on states for support during the arbitral process and for enforcement of resulting awards. See Wetter, The Conduct of the Arbitration, 2 J. Int’l Arb. 7, 27–34 (1985).

⁵⁷ Paulsson, Delocalisation of International Commercial Arbitration: When and Why It Matters, 32 Int’l & Comp. L.Q. 53, 58 (1983). Paulsson noted that such a provision, albeit “poised for reform,” exists in Austria. Id. at 59 n. 10. See Melis, Arbitration and the Courts in Austria—international aspects, in The Art of Arbitration, Liber Amicorum for Pieter Sanders 253, 257 (J. C. Schultsz & A.J. van den Berg eds. 1982).

⁵⁸ Paulsson, supra note 57, at 59.

⁵⁹ New York Convention, supra note 25. On the Convention, see generally A. J. van den Berg, The New York Convention of 1958: Toward a Uniform Judicial Interpretation (1981); Contini, International Commercial Arbitration: The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 8 Am. J. Comp. L. 283 (1959); Mirabito, The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards: The First Four Years, 5 Ga. J. Int’l & Comp. L. 471 (1975); Sanders, A Twenty Years’ Review of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 13 Int’l Law. 269 (1979); and Springer, The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 3 Int’l Law. 320 (1969).

In support of the enforceability of anational awards under the Convention, see Lake & Dana, supra note 15, at 790. Opposed, see A.J. van den Berg, supra, at 28–40. A subcommittee of the American Arbitration Association concluded that “the convention should apply to delocalized arbitration [another term for anational arbitration], but it is to be expected that delocalized awards will be given special scrutiny in the courts of the United States.” Sub-Committee on Delocalized Arbitration of the Law Committee of the American Arbitration Association, Report 12 (Feb. 14, 1984) [hereinafter AAA Report]. If, instead of an appropriate law applied fairly, the award were set aside in a country “without a tradition of judicial independence … merely to please the bureaucracy …. [e]nforcement of such an award [elsewhere] would seem neither improper nor inappropriate.” Park, supra note 25, at 27–28.

⁶⁰ A related objective of the approach is to encourage courts to abstain from applying their law to an international commercial arbitration simply because the award was rendered in that state. An often-argued example is the decision on the appeal of an ICC award, Götaverken Arendal v. Libyan General National Maritime Transport, Feb. 21,1980; for an English translation of extracts, see Paulsson, supra note 56, at 385. The Paris Court of Appeal noted that even though the place of arbitration was Paris and the award had been rendered in Paris, Article 11 of the ICC Rules (unaltered by the parties) provided for not even a subsidiary reference to French law: “the place of the arbitral proceedings, chosen only in order to assure their neutrality, is not significant; it may not be considered an implicit expression of the parties’ intent to subject themselves, even subsidiarily, to the loi procédural française.” The court concluded that since the award had been “rendered in accordance with proceedings which are not those of French law and which have no attachment whatsoever to the French legal order since the two parties are foreigners, and since the contract was signed and was to be performed abroad, [it] may not be considered French.” Id. at 386. In this sense, the rhetoric of the anational movement echoes the motivations expressed in the shift in U.S. choice of law from localizing factors to interest analysis.

⁶¹ Park, supra note 25, at 27. See also Redfern, The Arbitration Between the Government of Kuwait and Aminoil, 55 Brit. Y.B. Int’l L. 78 (1984).

⁶² See, e.g., UNCITRAL Model Law, supra note 49, Art. 34(3).

⁶³ Park, supra note 25, at 51. See also A.J. van den Berg, supra note 59, at 30.

⁶⁴ For example, Lord Elwyn Jones, in introducing the bill that eventually eliminated the British “case stated” procedure, supra note 46, explained: “The purpose [of the bill] is to remove certain legal obstacles which at present stand in the way of London being used to its full potential as an international centre for arbitration.” See Kerr, supra note 52, at 124. See also Bentil, Making England a More Attractive Venue for International Commercial Arbitration by Less Judicial Oversight, 5 J. Int’l Arb. 49 (1988). Indeed, the commercial value of being a center of arbitration is generally believed to have spurred this global transformation of municipal arbitration laws.

France, whose courts are argued to have employed anational reasoning in regard to an arbitration (see supra note 60), shortly thereafter adopted such a statute. See Audit, A National Codification of International Commercial Arbitration: The French Decree of May 12, 1981, in Resolving Disputes, supra note 44, at 117. See also Carbonneau, supra note 47, at 167–73; Carbonneau, The Elaboration of a French Court Doctrine on International Commercial Arbitration: A Study in Liberal Civiliati Judicial Creativity, 55 Tul. L. Rev. 1 (1980); Beilet, The Evolution of French Judicial Views on International Commercial Arbitration, 34 Arb. J. 28 (1979).

On the other hand, Belgium has passed a law freeing international arbitrations entirely, i.e., making them anational. See van Houtte, La Loi beige du 27 mars 1985 sur l’arbitrage international, 1986 Revue de l’Arbitrage [Rev. Arb.] 29 (1986); Vanderelst, Increasing the Appeal of Belgium as an International Arbitration Forum?—The Belgian Law of March 27, 1985 concerning the Annulment of Arbitral Awards, 3 J. Int’l Arb. 77 (1986).

⁶⁵ See UNCITRAL Model Law, supra note 49, Art. 34. “To the extent that the UNCITRAL draft Model Law … with its very limited grounds for review is adopted, [the] reasons for seeking to delocalize arbitration would be reduced in persuasiveness.” AAA Report, supra note 59, at 6. “Article 34 takes into account the ‘mobility’ of international commercial arbitration and reduces the legal relevance of the chosen place of arbitration. … [I]t contributes to what one may call ‘soft derealization’.” Herrmann, The British Columbia Enactment of the UNCITRAL Model Law, in UNCITRAL Arbitration Model in Canada 65, 70 (R. Paterson & B. Thompson eds. 1987). As to the grounds for refusing to enforce an award under the UNCITRAL Model Law, see Ungar, The Enforcement of Arbitral Awards Under UNCITRAL’s Model Law on International Commercial Arbitration, 25 Colum. J. Transnat’l L. 717 (1987).

⁶⁶ See Böckstiegel, States in the International Arbitral Process, 2 Arb. Int’l 22 (1986).

⁶⁷ A caveat to the significance of these arbitral awards can be found in Judge Lagergren’s comment in British Petroleum, infra note 76, that the “Tribunal is not competent to establish conclusively the nationality of its Award, for this can only be decided by the courts of [the place of arbitration] and of other jurisdictions in which the enforcement of the Award may be sought.” 53 ILR at 309. Notably, in this regard the somewhat ambiguous LIAMCO award, infra note 85, was later the subject of extensive municipal litigation. Implicit in that subsequent litigation, despite the ambiguity of the award itself, is the seemingly unquestioned assumption that the arbitration was governed by Switzerland’s legal system. The Swiss Federal Supreme Court, in an action relating to enforcement, noted that “the appeal for annulment permissible under the laws of Geneva was not filed.” Libya v. Libyan American Oil Co. (Swiss Federal Supreme Ct., June 19, 1980), reprinted in 20 ILM 151, 154 (1981). (As to Swiss laws on the execution issue presented, see generally Lalive, Swiss Law and Practice in Relation to Measures of Execution against the Property of a Foreign State, 10 Neth. Y.B. Int’l L. 153 (1979).) Moreover, in a later enforcement action in U.S. courts, Libya itself characterized the award as Swiss, contending that “the Swiss judgment has, in effect, set aside or suspended LIAMCO’s arbitral award”; while the United States, as amicus curiae, argued that the award was a foreign arbitral award enforceable under the New York Convention. Brief (June 16, 1980) and Supplemental Memorandum (Nov. 7, 1980) of the United States as amicus curiae in Libyan American Oil Co. v. Socialist People’s Libyan Jamahirya, reprinted in 20 ILM 161 and 164, 165 (1981). The court of appeals, apparently in reliance on the amicus brief, 684 F.2d 1032 (D.C. Cir. 1982), vacated the judgment of the U.S. district court, 482 F.Supp. 1175 (D.D.C. 1980), which also had assumed that the award was the result of foreign rather than international arbitration, but had nonetheless declined to recognize or enforce the award by reason of the act of state doctrine. The award was also recognized in France and Sweden. See Procureur de la République v. Société LIAMCO (Trib. gr. inst. Paris 1979), reprinted in 106 Journal du Droit International [JDI] 857 (1979); Libyan American Oil Co. v. Libya (Ct. App. Svea, June 19, 1980), reprinted in English in 20 ILM 893 (1981).

⁶⁸ Saudi Arabia v. Arabian American Oil Co. (ARAMCO), reprinted in 27 ILR 117 (1958) (Sauser-Hall, Badawi/Hassan, Habachy, arbs.).

⁶⁹ Id. at 155.

⁷⁰ Id. at 155–56.

⁷¹ Id. at 156.

⁷² Id.

⁷³ Sapphire International Petroleums v. National Iranian Oil Co., reprinted in 35 ILR 136 (1963) (Cavin, sole arb.). See also Suratgar, The Sapphire Arbitration Award, the Procedural Aspects: A Report and a Critique, 3 Colum. J. Transnat’l L. 152 (1964).

⁷⁴ Sapphire, 35 ILR at 168.

⁷⁵ Id. at 169.

⁷⁶ British Petroleum Exploration Co. v. Libyan Arab Republic (Award on the Merits), reprinted in 53 ILR 297 (1973) (Lagergren, sole arb.). A further award was rendered by Lagergren on Aug. 1, 1974, addressing plaintiff’s motion to reopen the proceedings; reprinted in id. at 375.

⁷⁷ See von Mehren & Kourides, International Arbitrations between States and Foreign Private Parties: The Libyan Nationalization Cases, 75 AJIL 476 (1981). The three arbitrations are significant generally and to this discussion specifically because “[i]t is rare in international arbitration for three arbitrations,’ with virtually identical factual and legal contexts, to arise and be heard by distinguished international jurists, and to result in awards that thereafter become part of the public domain.” Id. at 490.

⁷⁸ British Petroleum, 53 ILR at 309.

⁷⁹ Id. In support of his holding, Judge Lagergren cited Sapphire and Alsing Trading Co. & Svenska Tändsticks Aktiebolaget v. The Greek State, reprinted in 23 ILR 633 (1954) (Python, sole arb.). On Alsing, see generally Schwebel, The Alsing Case, 8 Int’l & Comp. L.Q. 320 (1959).

⁸⁰ Texaco Overseas Petroleum Co. & California Asiatic Oil Co. v. Libyan Arab Republic (Award on the Merits) (1977), reprinted in 17 ILM 1 (1978) (Dupuy, sole arb.). French original of part II of the Award on the Merits, reprinted in 104 JDI 350 (1977). Professor Dupuy at an earlier stage rendered an award on his jurisdiction. TOPCO (Preliminary Award), reprinted in 53 ILR 393 (1975) (Dupuy, sole arb.). See further Lalive, Un Grand Arbitrage Pétrolier entre un Gouvernement et deux sociétés privées étrangères, 104 JDI 319 (1977).

⁸¹ TOPCO, 17 ILM at 8.

⁸² Id.

⁸³ Dupuy distinguishes Sapphire, whose sole arbitrator was to be appointed by the President of the Swiss Federal Tribunal. He implies mistakenly, however, that this designation was an expressly stated basis for the conclusion reached in Sapphire. Id.

⁸⁴ Id. at 9.

⁸⁵ Libyan American Oil Co. v. Libyan Arab Republic (1977), reprinted in 20 ILM 1 (1981) (Mahmassani, sole arb.).

⁸⁶ Id. at 43.

⁸⁷ Von Mehren & Kourides, assuming that Swiss law governed the arbitration, found it interesting that Libya did not challenge the award “because the arbitral procedure was not the law of the situs.” Von Mehren & Kourides, supra note 77, at 509. However, under the vast majority of municipal arbitration statutes, parties may choose their own internal rules of procedure as long as those rules are not inconsistent with the mandatory provisions of the arbitration statute involved. Thus, there is nothing inherently challengeable about the choice by Mahmassani of the United Nations Draft Convention on Arbitral Procedure. The only reason for challenge on the basis stated would be failure to comply with mandatory provisions, such as registration of the award.

Lake and Dana conclude that the arbitration “must be regarded as a-national” because the choice to use the Draft Convention on Arbitral Procedure was made, according to Mahmassani, “independently of the local law of the seat of arbitration.” Lake & Dana, supra note 15, at 804. Again, however, Mahmassani’s statement is ambiguous in that it does not say that the procedural rules chosen would be applied even if they were—in some particularities—contrary to local law. Rather, Mahmassani cites Sapphire only to support the principle that the rules of procedure are chosen independently of local law.

At the other end of the spectrum, Redfern suggests that Mahmassani followed the approach of Dupuy in TOPCO and regarded LIAMCO only as subject to public international law. Redfern, supra note 61, at 82.

⁸⁸ ARAMCO, 27 ILR at 156.

⁸⁹ British Petroleum, 53 ILR at 309.

Dupuy, the sole arbitrator in TOPCO, did not state his view on this point but, rather, confused his jurisdiction to consider enforceability generally with consideration of enforceability as a circumstance evidencing the parties’ choice of the legal system to govern the arbitration. In addition, it seems inconsistent that Dupuy cited the number of parties to the ICSID Convention to support his conclusion that UN General Assembly Resolution 1803 continued to reflect the proper standard of compensation in expropriation, 17 ILM at 30, but did not cite the same circumstances to support the apparent willingness of states to enter into enforceable arbitral arrangements.

⁹⁰ Dupuy in TOPCO also noted that the enforceability of the award in that arbitration was not of practical significance, as the “present arbitration should be an arbitration on matters of principle.” 17 ILM at 8. What Dupuy passed over, however, is that, as in British Petroleum, the award as to legal principles was only the first stage of an arbitration that ultimately was to decide upon the requested relief of restitution or damages. Thus, the TOPCO arbitration ultimately was of more than declaratory character. See von Mehren & Kourides, supra note 77, at 490–96.

⁹¹ ARAMCO, 27 ILR at 156.

⁹² See Z & F Assets Realization Corp. v. Hull, 311 U.S. 470, 487 (1941).

⁹³ 28 U.S.C. §§1330, 1332, 1396, 1441, 1602–1611 (1982). During the period 1952–1976, suits could be instituted with the filing by the Department of State of its suggestions on immunity with the court. For a concise history of U.S. practice, see Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 698 (1976).

⁹⁴ See, e.g., United Kingdom State Immunity Act 1978, ch. 33, reprinted in 17 ILM 1123 (1978); Canadian Act to Provide for State Immunity, ch. 95 (1982), reprinted in 21 ILM 798 (1982); European Convention on State Immunity (1972), 1972 ETS 74, reprinted in 11 ILM 470 (1972); Australian Foreign States Immunities Act 1985, reprinted in 25 ILM 715 (1986).

On the current state of sovereign immunity doctrine, see Trooboff, Foreign State Immunity: Emerging Consensus on Principles, 200 Recueil des Cours 235 (1986 V). On an agreement to arbitrate as a waiver of sovereign immunity from execution, see id. at 388; Fox, supra note 17, at 10; and Blessing & Burckhardt, Sovereign Immunity—A Pitfall in State Arbitration?, in Swiss Essays on International Arbitration 107 (C. Reymond & E. Bucher eds. 1984).

⁹⁵ Böckstiegel, supra note 66, at 27.

⁹⁶ Although I believe this proposition, as qualified, is true, I also note that I am not aware of empirical support for the assertion that business acts cautiously in regard to foreign investment. The qualification “often” recognizes that corporate behavior likely turns also upon the competition within the industry in question and the institutional memory of the specific corporation.

⁹⁷ Lake and Dana first state that ARAMCO and TOPCO were “denationalized” proceedings, supra note 15, at 774. They later conclude that the Iran-U.S. Claims Tribunal, like the International Court of Justice, is “a ‘denationalized’ adjudicating body, whose actions are governed by the treaty creating it and by its own rules, but not by any national arbitration law,” id. at 779. They ultimately conclude that because the Tribunal (and implicitly ARAMCO and TOPCO also) is denationalized, its awards are anational, id. at 789.

⁹⁸ A similar mixing of these two forms of denationalized arbitrations occurs in Redfern, supra note 61, at 77 (text at note 25) and 79–83.

⁹⁹ Although it must be remembered that a given country may not be a party to the New York Convention, while a state may have frozen assets at its disposal to set off against a public international award.

¹⁰⁰ Sapphire, 35 ILR at 168–69.

¹⁰¹ See text at note 84 supra and TOPCO, 17 ILM at 9.

¹⁰² Delaume, Arbitration with Governments: “Domestic” v. “International” Awards, 17 Int’l Law. 687, 689(1983):

In this connection, it may be appropriate to recall that the English Arbitration Act of 1979, abolishing the special case procedure, was enacted for the purpose, among others, of assuring foreign states that … they would no longer have to fear that the submission implied acceptance of the judicial supervisory authority of the English Court.

See AAA Report, supra note 59, at 5–6.

¹⁰³ Kuwait and American Independent Oil Co. (1982), reprinted in 21 ILM 976 (1982) (Reuter, Fitzmaurice, Sultan, arbs.).

¹⁰⁴ Art. IV(1), id. at 980.

¹⁰⁵ Art. V, id.

¹⁰⁶ Art. IV(3), id.

¹⁰⁷ Id. at 999.

¹⁰⁸ Interestingly, in AMINOIL it reportedly was the state party, Kuwait, that argued for the arbitration to be governed by French law; AMINOIL argued for an anational process. Redfern, supra note 61, at 77. In this sense, it is Kuwait arguably that pressed for a more effective award. Id. at 86.

¹⁰⁹ For example, the U.S. Foreign Sovereign Immunities Act recognizes that immunity may be waived, 28 U.S.C. §1605(a)(1) (1982), and the House Report explaining that provision noted that “[w]ith respect to implied waivers, the courts have found such waivers in cases where a foreign state has agreed to arbitration in another country.” H.R. Rep. No. 1487,94th Cong., 2d Sess. 6 (1976), 1976 U.S. Code Cong. & Admin. News 6604, 6617. See generally Fox, supra note 17; Oparil, Waiver of Sovereign Immunity in the United States and Great Britain by an Arbitration Agreement, 3 J. Int’l Arb. 61 (1986); Sullivan, Implicit Waiver of Sovereign Immunity by Consent to Arbitration: Territorial Scope and Procedural Limits, 18 Tex. Int’l L.J. 329 (1983).

¹¹⁰ After 3 years of development involving all interested nations, the UNCITRAL Rules, supra note 26, were adopted by the United Nations Commission on International Trade Law (UNCITRAL) on Apr. 28, 1976, and recommended for use without further debate by the General Assembly on Dec. 15, 1976. See K. Rauh, Die Schieds- und Schlichtungsord-nungen der UNCITRAL (1983); Sanders, Commentary on UNCITRAL Arbitration Rules, 2 Y.B. Com. Arb. 172 (1977). Article 111(2) of the Claims Settlement Declaration, supra note 1, provides that the Tribunal shall use the UNCITRAL Rules “except to the extent modified by the Parties or by the Tribunal.” See Aksen, The Iran-United States Claims Tribunal and the UNCITRAL Arbitration Rules—an early comment, in The Art of Arbitration, supra note 57, at 1.

¹¹¹ See UNCITRAL Rules, supra note 26, Arts. 6–14.

¹¹² State claimants have achieved similar security in the past by holding on to frozen assets for possible satisfaction of judgments rendered in their favor. The United States, for example, held German assets in this way after World War I and ultimately used a portion of those assets to satisfy awards made by the U.S.-German Mixed Claims Commission in favor of U.S. nationals. See Borchard, The Settlement of War Claims Act of 1928, 22 AJIL 373 (1928); McHugh, Settlement of War Claims Act of 1928, 14 A.B.A.J. 193(1928).

¹¹³ Mark Dallal v. Bank Mellat, supra note 11.

¹¹⁴ See General Declaration, supra note 1, para. 7 (“All funds in the Security Account are to be used for the sole purpose of the payments of … claims against Iran …”).

¹¹⁵ Ministry of Defense v. Gould, Inc., supra note 12.

¹¹⁶ As stated in the brief for the United States as amicus curiae in Ministry of Defense v. Gould, Inc., 887 F.2d 1357 (9th Cir. 1989) [hereinafter Amicus Curiae Brief]:

While to date these awards have been paid from the Security Account [and] [although the United States expects Iran to carry out its obligation to replenish the Security Account in the future, should Iran not do so, the vast majority of private claims before the Tribunal will be dependent on judicial enforcement of Tribunal Awards.

Id. at 7.

¹¹⁷ Claims Settlement Declaration, supra note 1, Art. 11(1).

¹¹⁸ Id., Art. 11(2).

¹¹⁹ Id., Art. 11(3); General Declaration, supra note 1, para. 17.

¹²⁰ Claims Settlement Declaration, supra note 1, Art. VI(4).

¹²¹ The Tribunal’s docket is composed of approximately 3,761 claims of nationals, 78 official claims and 22 interpretive disputes.

¹²² Diplomatic protection is, in the words of the Permanent Court of International Justice, a situation in public international law whereby, “in taking up the case of one of its nationals, by resorting to diplomatic action or international judicial proceedings on his behalf, a State is in reality asserting its own right, the right to ensure in the person of its nationals respect for the rules of international law.” Panevezys-Saldutiskis Railway Case (Estonia v. Lithuania), 1939 PCIJ (ser. A/B) No. 76, at 16 (Judgment of Feb. 28). See also G. Leigh, Nationality and Diplomatic Protection, 20 Int’l & Comp. L.Q. 453, 455 (1971).

¹²³ Islamic Republic of Iran and United States (Case A18) (Dual Nationality), Dec. 32-A18-FT (Lagergren, Holtzmann (CO), Kashani (DO), Riphagen (CO), Aldrich, Shafeiei (DO), Mangard, Ansari (DO), & Mosk (CO), arbs., Apr. 6, 1984), 5 Iran-U.S. C.T.R. 251 (1984 I).

Citations to this award and those below include the names of the arbitrators who were members of the panel rendering the award. The Chairman is always listed first, with the other arbitrators following in alphabetical order. Parenthetically following each name is, as appropriate, a letter or letters reflecting the arbitrator’s position vis-à-vis the Tribunal’s award. These symbols are: C, concurring; D, dissenting; CS, concurring via statement by signature; DS, dissenting via statement by signature; CO, concurring opinion; DO, dissenting opinion; SO, separate opinion; and RS, refusal to sign. An indication of dissent or concurrence with a whole award does not necessarily indicate dissent or concurrence with the particular point being discussed in this study.

On dual nationals’ claims before the Tribunal, see generally Mahoney, The Standing of Dual Nationals Before the Iran-United States Claims Tribunal, 24 Va. J. Int’l L. 695 (1984); Note, Claims of Dual Nationals in the Modern Era: The Iran-United States Claims Tribunal, 83 Mich. L. Rev. 597 (1984); Leurent, Problèmes soulevés par les demandes des double nationaux devant le Tribunal des différends irano-américains, 74 Revue Critique de Droit International Privé [RCDIP] 273–99, 477–503 (1985); and Rigaux, L’Admissibilité des demandes introduites devant un tribunal international par les binationaux et la décision de l’lran-United States Claims Tribunal sur cette question (paper presented in The Hague, May 29, 1984).

¹²⁴ Memorial of the Islamic Republic of Iran in Case A18 (Oct. 21, 1983) [hereinafter Iranian A18 Memorial], reprinted in Iranian Assets Litigation Reporter [hereinafter I.A.L.R.], Nov. 18, 1983, at 7,503.

¹²⁵ Id. at 16–17 (emphasis added).

¹²⁶ Id. At least in the United States, a portion of the costs of the Tribunal is borne by the successful private claimants via a user fee placed by the U.S. Government on the amounts awarded to such claimants. See United States v. Sperry Corp. 58 U.S.L.W. 4018 (U.S. Nov. 28, 1989). See also the summary of the earlier opinion of the court of appeals in 83 AJIL 86 (1989).

¹²⁷ Iranian A18 Memorial, supra note 124, at 25–26.

¹²⁸ Id. at 18.

¹²⁹ Id. at 31.

¹³⁰ 1 U.S. Transcript of the Case A18 Hearing 140 (Nov. 9, 1983).

¹³¹ Case A18 (Dual Nationality), supra note 123, at 18–19, 5 Iran-U.S. C.T.R. at 261.

¹³² See, e.g., Memorial of the Islamic Republic of Iran, Case A21, at 15 (May 15, 1986) (interpretive dispute dealing with the duty of the state parties to execute judgments rendered against their nationals), reprinted in I.A.L.R., July 25, 1986, at 12,682, 12,693 (“All this confirms that the provisions concerning the resolution of disputes reflect classical requirements of diplomatic protection …”). See also A Recent Review of the Cases at the Hague Tribunal, Kayhan [Iranian newspaper], June 13, 1984 (U.S. Dep’t of State trans.) (statement of an Iranian official after the decision in Dual Nationality that “[w]e believe … that The Hague arbitration is an international arbitration and the Netherlands’ Government has no right to interfere with it”).

¹³³ Islamic Republic of Iran and United States (State Party Responsibility for Awards Rendered Against its Nationals), Dec. 62-A21-FT, para. 12 (Bockstiegel, Holtzmann, Mostafavi (SO), Briner, Aldrich, Bahrami-Ahmadi (SO), Virally, Salans, Ansari (SO), arbs., May 4, 1987), 14 Iran-U.S. C.T.R. 324, 330 (1987 I).

¹³⁴ See, e.g., Concurring/Dissenting Opinion of Assadollah Noori (June 3, 1988) to Leonard & Mavis Daley and Islamic Republic of Iran, AWD 360-10514-1 (Böckstiegel, Holtzmann & Noori (CO/DO), arbs., Apr. 20, 1988); Separate Opinion of Seyed Khalil Khalilian (Feb. 23, 1988) to Lord Corp. and Iran Helicopter Support & Renewal Co., AWD 346-10973-2 (Briner, Aldrich & Khalilian (SO), arbs., Jan. 29, 1988).

¹³⁵ See Claim of Finnish Shipowners (Fin. v. Gt. Brit.), 3 R. Int’l Arb. Awards 1479 (1934) (Bagge, sole arb.).

¹³⁶ See Interhandel Case (Preliminary Objections) (Switz. v. U.S.), 1959 ICJ Rep. 6 (Judgment of Mar. 21); American Int’l Group v. Islamic Republic of Iran, 493 F.Supp. 522, 525 (D.D.C. 1980) (“It is well settled in international law that where local remedies would be ineffective or meaningless or would not meet the international standard of minimum justice, the alien need not subject himself, in the first instance, to the local courts or administrative tribunals”).

¹³⁷ See Rexnord and Islamic Republic of Iran, AWD 21–132–3, at 8–9 (Mangård, Mosk & Sani (RS), arbs., Jan. 10, 1983), 2 Iran-U.S. C.T.R. 6 (1983 I); American Int’l Group and Islamic Republic of Iran, AWD 93–2–3, at 9 (Mangard, Ansari (RS) & Mosk (CO), arbs., Dec. 19, 1983), 4 Iran-U.S. C.T.R. 96 (1983 III); and Time and Islamic Republic of Iran, AWD 139–166–2, at 4 (Riphagen, Aldrich & Shafeiei (DS), arbs., June 29, 1984), 7 Iran-U.S. C.T.R. 8 (1984 III). But see Dissenting Opinion of M. Kashani (Sept. 13, 1984) to Starrett Housing and Islamic Republic of Iran, ITL 32–24–1, at 55 (Dec. 19, 1983), 7 Iran-U.S. C.T.R., supra, at 119. Cf. Schwebel, Some Aspects of International Law in Arbitration Between States and Aliens, in 1986 Private Investors Abroad—Problems and Solutions in International Business 12-1, 12-8 (J. Moss ed.).

¹³⁸ See, e.g., Amoco Int’l Finance Corp. and Islamic Republic of Iran, AWD 310-53-5, para. 21 (Virally, Brower (CO) & Ansari (C/D), arbs., July 14, 1987), 15 Iran-U.S. C.T.R. 189, 197 (1987 II).

¹³⁹ See Leigh, supra note 122, at 455.

¹⁴⁰ A supplemental clause provides that when the claim is less than $250,000, the claim may also be presented by the government of that national. Claims Settlement Declaration, supra note 1, Art. 111(3). In the event, the claims of U.S. nationals for less than $250,000 were filed by the United States; the typical caption for the claimant read, “The United States of America, on behalf and for the benefit of the [name of private claimant].” The Tribunal, in the spring of 1986 on its own initiative, changed the caption of the claims’for less than $250,000 to read, “[name of private claimant], a claim of less than U.S. $250,000 presented by the United States of America.” See, e.g., Picker Int’l Corp. and Islamic Republic of Iran, AWD 229-10173-3 (Virally, Brower & Ansari, arbs., May 1, 1986). The Agent for Iran filed Requests for Correction of Award asking that the original caption be reinstated. The Tribunal denied these requests, stating that Article 111(3) of the Claims Settlement Declaration indicates that the claim “remains the claim of the national and not of the Government of such national … the Government of the national owning such claim merely presents the claim ….” See Koehler and Islamic Republic of Iran, Dec. 43–11713–1 (Bockstiegel, Holtzmann & Mostafavi (DS), arbs., July 3, 1986), 11 Iran-U.S. C.T.R. 285 (19861). See also Trustees of Columbia Univ. and Islamic Republic of Iran, Dec. 42–10517–1 (Böckstiegel, Holtzmann & Mostafavi (DS), arbs., July 3, 1986), 11 Iran-U.S. C.T.R., supra, at 283; Baygell and Islamic Republic of Iran, Dec. 46–10212–2 (Briner, Aldrich & Bahrami-Ahmadi (DS), arbs., Aug. 7, 1986), 11 Iran-U.S. C.T.R., supra, at 300. Since that time, Iranian arbitrators have filed separate opinions arguing that the claims for less than $250,000 are espoused by the United States, and occasionally on their separate opinions have altered the case caption to read “[name of private claimant] presented by The United States of America in protection of its national.” See opinions cited supra note 134.

As a precautionary measure, the United States also filed a claim for more than $250,000 for all of the claimants potentially holding claims for less than $250,000 (Case 86). The Statement of Claim in Case 86 was presented “in continuance of the exercise of diplomatic protection of its nationals, acting as parens patriae, trustee, guardian and representative on their behalf.” This claim, often called the “blanket claim,” has not been the subject of any proceedings. “The primary purpose of the filing was to provide a convenient mechanism for dealing with the claims if a lump sum settlement were reached with Iran.” Response of the United States, Case A21, at 11 (September 1986), reprinted in Mealey’s Litigation Rep.—Iranian Claims [hereinafter Mealey’s], Oct. 3, 1986, at 4913, 4919.

¹⁴¹ See, e.g., Letter from A. Rovine to G. Lagergren (May 28, 1982) (“the Agent of the Islamic Republic of Iran, questioned my right to speak at the conference and stated that my attendance was at the ‘courtesy’ of his Government”). Indeed, the Tribunal in its awards in such arbitrations lists the U.S. representatives as merely “Also Present.”

Likewise, Iran has reportedly characterized as “unwarranted and unjustified” the filing of comments by the U.S. Agent on proposed settlements of such arbitrations. Letter from M. Eshragh to M. Virally (Jan. 9, 1986), cited in Response of the United States, supra note 140, at 21, reprinted in Mealey’s at 4924.

¹⁴² Nielsen, F. K. & Maktos, J., American-Turkish Claims Settlement 6 (U.S. Government Printing Office, 1937) Google Scholar. See also 6 J. B. Moore, A Digest of International Law 616 (1906).

¹⁴³ Similarly, it is against the national, and not the government of that national, that the Tribunal’s Rules require entry of counterclaims and awards of costs. See Introduction and Definitions, para. 3c, Final Tribunal Rules of Procedure, May 3, 1983, reprinted in 2 Iran-U.S. C.T.R. 405, 406 (1983 I); Rules, Arts. 32 and 40, id. at 434 and 440.

¹⁴⁴ See Sperry Corp., supra note 126.

¹⁴⁵ Jones, The Iran-United States Claims Tribunal: Private Rights and State Responsibility, 24 Va. J. Int’l L. 259, 261 (1984) (footnotes omitted). Jones asks:

Is the Tribunal a private arbitral tribunal created to resolve private law disputes arising under different systems of law and to hear private law claims against Iran and the United States, or is it an international or interstate tribunal charged with the task of ruling on the responsibility of the respondent State under public international law for the conduct which constitutes the subject matter of the claims? If the former is the case, the Tribunal would be required to rule on infringements of private law rights arising in municipal legal systems …. On this view, the United States and Iran may be regarded as having referred to a private transnational arbitral tribunal questions of private law which might in other circumstances be justiciable before domestic courts. If the latter is the case, the competence of the Tribunal lies in respect of such claims as are true international claims founded on an alleged breach of international law. On this view, the Tribunal is an international or interstate tribunal dealing with the rights and duties of States under public international law in relation to their activities on the international plane, and is primarily concerned with. an exercise in diplomatic protection on behalf of the United States.

¹⁴⁶ The Full Tribunal held in the Dual Nationality case, supra note 123, at 19, 5 Iran-U.S. C.T.R. at 261–62:

It seems clear that a major obstacle to the resolution of that crisis was the existence of much litigation in the courts of the United States brought against Iran by citizens of the United States, often involving judicial attachments of Iranian assets. In order to overcome that obstacle and permit the return of these assets and the termination of that litigation, a new substitute forum—this Tribunal—was established.

See also Esphahanian and Bank Tejarat, AWD 31–159–2 (Bellet, Aldrich & Shafeiei (RS/DO), arbs., Mar. 29, 1983), 2 Iran-U.S. C.T.R. 157 (1983 I) (“the Tribunal has been substituted for the national courts of both countries”; id. at 166).

¹⁴⁷ Iranian Civil Code Art. 9.

¹⁴⁸ U.S. Const. Art. VI, cl. 2.

¹⁴⁹ Dreyfus v. Von Finck, 534 F.2d 24, 30 (2d Cir. 1976).

¹⁵⁰ See Asakura v. Seattle, 265 U.S. 332 (1924). See also R. Wilson, United States Commercial Treaties and International Law (1960).

¹⁵¹ American Int’l Group v. Islamic Republic of Iran, 493 F.Supp. 522, 525 (D.D.C. 1980).

¹⁵² Concurring Opinion of Richard M. Mosk at 8 (Dec. 30, 1983) to American Int’l Group and Islamic Republic of Iran, supra note 137, 4 Iran-U.S. C.T.R. at 111. See also Separate Opinion of Charles N. Brower at 5 (Mar. 27, 1986) to SEDCO and Islamic Republic of Iran, ITL 59–129–3 (Mangard, Brower (SO) & Ansari (D), arbs., Mar. 27, 1986), 10 Iran-U.S. C.T.R. 180, 189(1986 I).

¹⁵³ Vienna Convention on the Law of Treaties, Art. 31(1), opened for signature May 23, 1969, 1155 UNTS 331, reprinted in 8 ILM 679 (1969) (entered into force Jan. 27, 1980).

Iran and the United States on several occasions declared that the Vienna Convention, although not directly applicable, governs interpretation of the Accords. See, e.g., Islamic Republic of Iran and United States (Dual Nationality), supra note 123, at 14–15, 5 Iran-U.S. C.T.R. at 259. The Tribunal has also consistently applied the Vienna Convention. See, e.g., United States and Islamic Republic of Iran (Security Account Issues), Dec. 12–A1–FT, at 3 and 5 (Aug. 3, 1982), I Iran-U.S. C.T.R. 189, 190 (1981-82); Islamic Republic of Iran and United States (Dual Nationality), supra note 123; United States and Islamic Republic of Iran (Standby Letters of Credit), AWD 108-A16/582/591-FT, at 15 (Jan. 25, 1984), 5 Iran-U.S. C.T.R. 57 (1984 I); and United States and Islamic Republic of Iran (Iranian Bank Claims), Dec. 37-A17-FT, at 16 (June 18, 1985), 8 Iran-U.S. C.T.R. 189 (1985 I). Notwithstanding the views of the state parties, the interpretation provisions of the Vienna Convention would likely be applicable since they are generally regarded “as declaratory of existing law.” Jimenez de Arechaga, International Law in the Past Third of a Century, 159 Recueil des Cours 1, 42 (1978 I).

¹⁵⁴ They wrote:

The Tribunal is a very different institution from the tribunals to which national arbitration laws such as the Dutch Code typically apply. It is not an ad hoc entity called into life by a commercial contract to resolve disputes under the contract, but an “International Arbitral Tribunal,” established by two sovereign states through an international agreement that has the status of a treaty under international law.

Lake & Dana, supra note 15, at 773 (footnotes omitted).

¹⁵⁵ See, e.g., text at note 84 supra.

¹⁵⁶ Both ARAMCO and TOPCO were decided prior to the adoption of the UNCITRAL Rules. Other private arbitration rules, however, were available at the time.

¹⁵⁷ Böckstiegel, The Relevance of National Arbitration Law for Arbitrators under the UNCITRAL Rules, 1 J. Int’l Arb. 223, 230 (1984). See also Sanders, supra note 110, at 179; AAA Report, supra note 59, at 5; I. Dore, Arbitration and Conciliation Under the UNCITRAL Rules: A Textual Analysis 45–46 (1986).

¹⁵⁸ The entire UNCITRAL project was directed at developing rules of procedure for international commercial arbitration that would be acceptable worldwide and, in particular, to the developing world. See I. Dore, supra note 157, at 44; Introduction to Commentary on Preliminary Draft of the UNCITRAL Rules, UN Doc. A/CN.9/97 (1975). Originally, the drafters spread references throughout the Rules to the possible overriding effect of the governing legal system. At the ninth session, however:

Committee [II] considered the relationship between the Rules and the provisions of the national law applicable to the arbitration. It was agreed that the inclusion only in selected articles of the Rules of a proviso that the particular article was subject to the national law applicable to the arbitration would give rise to arguments a contrario in respect of other articles which did not set forth such a proviso. The Committee therefore decided to add to article 1 a general reference to the effect that all provisions in these Rules were subject to the national law applicable to the arbitration.

Report of Committee II, Ninth Session, UN Doc. A/CN.9/IX/CRP.1, para. 12 (1976).

¹⁵⁹ See supra text at note 109.

¹⁶⁰ Hardenberg, supra note 13, at 338.

¹⁶¹ As noted by Richard Lillich, “the Claims Settlement Agreement establishing the Tribunal was cobbled together in haste and confusion.” Lillich, supra note 2, at vii. Indeed, Roberts B. Owen, a principal U.S. negotiator, later wrote that “although the initial draft of the claims settlement declaration [by the United States] was some twenty-five pages long …, it was ultimately revised down to about three-and-a-half pages—surely one of the most concise legal documents of its kind ever written.” Owen, The Final Negotiation and Release in Algiers, in American Hostages in Iran 297, 312 (P. Kreisberg ed. 1986).

¹⁶² Consider, for example, the following somewhat ambiguous statement by Warren Christopher, chief U.S. negotiator of the Accords: “The settlement itself was simplified be cause a reliable body of arbitration law already existed in the United Nations system and could be lifted by reference into the agreement.” Christopher, Introduction, in American Hostages in Iran, supra note 161, at 1, 10–11.

¹⁶³ Article IV(3) 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.” Claims Settlement Declaration, supra note 1. Moreover, as Roberts Owen noted:

Although the release of the hostages was far and away the top priority of the U.S. government, we also wanted to avoid, if we possibly could, leaving our claimants without a remedy, and a remedy could be arranged only if Iran could be persuaded, through negotiation, to join in a responsible arrangement for adjudicating the claims. Indeed, for the U.S. government to have abandoned the claimants in the context of the hostage crisis might well have been regarded as a payment of ransom for the hostages’ release ….

Owen, supra note 161, at 301.

¹⁶⁴ ARAMCO, 27 ILR at 156.

¹⁶⁵ See Hertz, The Hostage Crisis and Domestic Litigation: An Overview, in Iran-United States Tribunal, supra note 1, at 136.

Iran apparently considered itself in danger of losing such cases, although the U.S. negotiators were aware that the U.S. plaintiffs’ actions were vulnerable ultimately to claims of immunity by Iran. See Owen, supra note 161, at 303–04.

¹⁶⁶ Vienna Convention on the Law of Treaties, supra note 153, Art. 31(3)(b).

¹⁶⁷ See Iran-United States Litigation, Remarks of Arthur M. Rovine, 77 ASIL Proc. 3 (1983).

¹⁶⁸ UNCITRAL Rules, supra note 26, Art. 32(5).

¹⁶⁹ See, e.g., Carter, Iran-United States Claims Tribunal: Observations on the First Year, 29 UCLA L. Rev. 1076 (1982).

¹⁷⁰ See, e.g., Symposium on the Settlement with Iran, 13 Law. Am. 1, 46 (1981). Indeed, during the negotiation of the Accords, “the United States was inclined to favor London as the site of the proposed international tribunal, [but] the Algerians urged [the United States] to suggest The Hague on the theory that it would be somewhat more palatable to the Iranians.” Owen, supra note 161, at 313.

¹⁷¹ At a symposium at the University of Miami Law School on Apr. 14, 1981, Mark Feldman, a lawyer with the U.S. State Department during the negotiation of the Accords, discussed the internal debate in the Department over these concerns and stated his personal preference for a process in which national courts would not interfere:

We are at a stage which raises a very complicated question concerning the law applicable to the proceeding. … It is a subtle and difficult thing. We are struggling with it right now. … One of the things we will have to try and decide is how to keep the courts of the Netherlands or of England out of these cases.

Symposium, supra note 170, at 38.

¹⁷² Indeed, the statement of Mark Feldman at a second conference held on June 16–18, 1981, reflects this internal consensus:

At first blush, one might suppose that this arbitration is governed only by international law and that local law is irrelevant …. After careful review of the conflicting literature on this subject and the characteristics of this proceeding, the State Department decided that prudence requires that the United States act on the assumption that proceedings conducted in the Netherlands will be governed by Dutch law ….

Feldman, Implementation of the Iranian Claims Settlement Agreement—Status, Issues and Lessons: View from Government’s Perspective, in 1981 Private Investors Abroad—Problems and Solutions in International Business 75, 97–98 (J. Moss ed.).

¹⁷³ See Amicus Curiae Brief, supra note 116, at 39.

¹⁷⁴ Provisionally adopted Mar. 10, 1982; permanently adopted May 3, 1983. See note 143 supra.

¹⁷⁵ See, e.g., Revised UNCITRAL Rules Released for Comment by Tribunal, I.A.L.R., Feb. 19, 1982, at 4,232.

¹⁷⁶ Article 1(3) of the Declaration, supra note 1, provides: “The Claims Settlement Declaration constitutes an Agreement in writing by Iran and the United States, on their own behalfs and on behalf of their nationals submitting to arbitration within the framework of the Algiers Declarations and in accordance with the Tribunal Rules.” On the significance of this provision, see text at note 182 infra.

¹⁷⁷ Thus, the Tribunal decided on May 3, 1982, to register its awards in accordance with Article 639(1) of the Dutch Code of Civil Procedure, later superseded by the 1986 Netherlands Arbitration Act with Article 1058 of the Dutch Code of Civil Procedure. See Manual of the Registry of the Iran-United States Claims Tribunal. The former article of the Dutch Code called for deposit within 8 days at the Registrar of the district where the award was made. The latter calls for deposit “without delay” at the same location. On the new Dutch arbitration law, see generally van den Berg, The Netherlands, 12 Y.B. Com. Arb. 3 (1987); and Tebbens, A Facelift for Dutch Arbitration Law, 34 Neth. Int’l L. Rev. 141 (1987). See also Sanders, A New Law for the Netherlands, 4 Pace L. Rev. 581 (1984).

¹⁷⁸ Explanatory Note of the Ministerie van Buitenlandse Zaken (Foreign Ministry) to a Proposed Bill on “Applicability of Dutch law to the awards of the Tribunal sitting in The Hague to hear claims between Iran and the United States” (July 12, 1983) (unofficial translation by Foreign Ministry).

¹⁷⁹ Letter of Arthur Rovine, Agent of the United States, to Christopher Pinto, Secretary-General of the Tribunal (May 28, 1982).

¹⁸⁰ See Iran-United States Claims Tribunal, Annual Report for the Period Ending 30 June 1983, paras. 20–22, Anns. VI–IX.

¹⁸¹ Spaans v. Iran-U.S. Claims Tribunal (Dist. Ct. The Hague, July 9, 1984), overruling decision of the Kantonrechter (County Ct. Judge) (The Hague, June 8, 1983), noted and reprinted in part in 18 Neth. Y.B. Int’l L. 357 (1987).

¹⁸² See Iran Appeals Raygo Wagner, Rexnord Awards to Dutch Court, I.A.L.R., Apr. 15, 1983, at 6,330. The two awards involved were Raygo Wagner Equipment and Star Line Iran, AWD 20–17–3 (Mangard, Mosk & Sani (RS), arbs., Dec. 15, 1982), 1 Iran-U.S. C.T.R. 411 (1981–82); and Rexnord and Islamic Republic of Iran, supra note 137.

¹⁸³ For a summary of these challenges, see Lake & Dana, supra note 15, at 759–65.

¹⁸⁴ See Mealey’s, Apr. 6, 1984, at 299–300.

¹⁸⁵ Reprinted in 5 Iran-U.S. C.T.R. 405 (1984 I).

¹⁸⁶ Normally, the Algerian Government as escrow agent would order the payment of monies from the Security Account upon receipt of a notification of award from the President of the Tribunal. When challenging awards in 1983, Iran also persuaded Algeria for a time that it should withhold payments on those awards until the challenges to their validity were decided. By November 1983, however, the United States had convinced Algeria that Algeria’s function was nondiscretionary and all payment orders were made. See I.A.L.R., Nov. 18, 1983, at 7,472.

¹⁸⁷ Gould Marketing and Ministry of Defence of Islamic Republic of Iran, AWD 136–49/50–2 (Riphagen, Aldrich & Shafeiei (CO/DO), arbs., June 29, 1984), 6 Iran-U.S. C.T.R. 272 (1984 II).

¹⁸⁸ I.A.L.R., July 10, 1987, at 14,407.

¹⁸⁹ Id., Apr. 29, 1988, at 15,654.

¹⁹⁰ See supra note 132.

¹⁹¹ Indeed, such direct entry into a national arbitration scheme would not be possible in the United Kingdom where §9 of the Sovereign Immunity Act provides that although a state is not immune from proceedings before UK courts related to an arbitration to which the state agreed, this denial of immunity “does not apply to any arbitration agreement between states.”

¹⁹² See, for example, the concerns expressed by the court in Occidental of Umm al Qaywayn v. A Certain Cargo of Petroleum, 577 F.2d 1196, 1203–05 (5th Cir. 1978).

¹⁹³ See supra text at notes 174–81.

¹⁹⁴ In at least one instance, a municipal court at the place of arbitration has held that the applicable municipal law did not govern an arbitration because the proceedings did not constitute “arbitration” as that term was defined by municipal law and that there was therefore nothing to be governed. See SEEE v. Yugoslavia (Swiss Fed. Trib., Sept. 18, 1957), reprinted in 47 RCDIP 366 (1958). Doctrinally, the position that there is nothing to be governed could be equated with the setting aside of an award. Compare SEEE v. Yugoslavia (Hague Ct. App., Sept. 8, 1972), reprinted in French in 1974 Rev. Arb. 313, and SEEE v. Yugoslavia (Hoge Raad, Nov. 7, 1975), 1976 Nederlandse Jurisprudentie No. 774, reprinted in French in 1978 Rev. Arb. 397. See also Delaume, SEEE v. Yugoslavia: Epitaph or Interlude?, 4 J. Int’l Arb. 25 (1987). Whether such a refusal to review an award should be viewed as the equivalent of setting aside the award or simply as abstention because of concerns with competence is a difficult question that turns upon the specific reason the court feels it cannot or should not examine the award.

¹⁹⁵ The provision of the Dutch Code of Civil Procedure referred to provides that the “arbitration agreement … must be made in writing and signed by the parties.” Dutch Code of Civil Procedure, Art. 623(1) (unofficial translation prepared by the Asser Institute, 1980). The arbitration agreement is also significant because such a writing is essential to the enforceability of the award, given that the writing requirement is also set forth in the New York Convention, supra note 25. In particular, Article IV of the New York Convention requires that to obtain recognition and enforcement, the party applying shall present the award and the arbitration agreement, such agreement, by Article II of the Convention, being in writing by the parties.

¹⁹⁶ A. J. van den Berg, supra note 59, at 171.

¹⁹⁷ To van den Berg, estoppel in the context of the New York Convention would reflect “a fundamental principle of good faith, which principle overrides the formalities required by Article 11(2) of the New York Convention.” Id. at 185.

¹⁹⁸ Hardenberg, supra note 13, at 338.

¹⁹⁹ See note 178 supra. This problem may explain a less specific statement of a U.S. Department of State official some months after the signing of the Accords: “Upon examination of Dutch law, it became apparent that awards rendered pursuant to the Claims Settlement Agreement would not meet certain procedural requirements for valid arbitral awards under the Dutch civil code.” Feldman, supra note 172, at 98.

²⁰⁰ Van den Berg, supra note 14, at 343 (emphasis in original).

²⁰¹ This provision was added to Article 1 of the UNCITRAL Rules as a part of the Tribunal’s modification of those Rules. See Tribunal Rules, supra note 143, 2 Iran-U.S. C.T.R. at 408.

²⁰² Georges Delaunie has argued that such a form of agreement would be sufficient for ICSID: “Consent may also result from the investor’s acceptance of a unilateral offer from the Contracting State involved, when that State has already consented to ICSID arbitration in relevant provisions … of a bilateral treaty with the Contracting State of which the investor is a national.” Delaume, ICSID Arbitration: Practical Considerations, 1 J. Int’l Arb. 101, 104 (1984). Similarly, although the recent UNCITRAL Model Law on International Commercial Arbitration requires a written agreement to arbitrate, a writing exists if there is “an exchange of statements of claim and defense in which the existence of an agreement is alleged by one party and not denied by another.” UNCITRAL Model Law, supra note 49, Art. 7(2). See also Furnish, Commercial Arbitration Agreements and the Uniform Commercial Code, 67 Cal. L. Rev. 317, 347 (1979) (“The arbitration agreement should be made amenable to autonomous creation through the same means recognized for the creation of a sales agreement …”).

²⁰³ Tribunal Rules, supra note 143, Art. 18(1)(a), 2 Iran-U.S. C.T.R. at 422.

²⁰⁴ Mark Dallal v. Bank Mellat, [1986] 1 All E.R. 239, 254.

²⁰⁵ Id.

²⁰⁶ Islamic Republic of Iran and United States (Jurisdiction Over Claims by a State Party Against Nationals of the Other State Party), Dec. 1-A2-FT (Lagergren, Holtzmann, Kashani (D), Bellet, Aldrich, Shafeiei (D), Mangård, Enayat (D) & Mosk, arbs., Jan. 26, 1982), 1 Iran-U.S. C.T.R. 101 (1981–82).

²⁰⁷ Lake & Dana, supra note 15, at 807.

²⁰⁸ Id. at 808–09.

²⁰⁹ The qualification “most, if not all,” is used in the text to reserve the potentially important question whether the sale of arms by a government, although contractual, is or is not a commercial matter.

²¹⁰ See Mavrommatis Palestine Concessions, 1924 PCIJ (ser. A) No. 2 (Judgment of Aug. 30). My use of the Mavrommatis case builds upon Professor Franck’s use of the proceeding to illustrate the costs of approaching private disputes as international matters. T. Franck, The Structure of Impartiality 213–14 (1968). “What had been a quarrel between businessmen and an administrator became a dispute pitting Britain against Greece, kingdom against khlgdom, national pride against national pride ….” Id. at 214.

²¹¹ Parry, Some Considerations upon the Protection of Individuals in International Law, 90 Recueil des Cours 653, 660 (1956 II). Nor is this piece of wisdom without apparent statistical support. A brief digest of all public international arbitral tribunals yields the following distribution of those tribunals over time: 1776–1800, 7; 1801–1825, 20; 1826–1850, 17; 1851–1875, 66; 1876–1900, 137; 1901–1925, 133; 1926–1950, 41; and 1951–1970, 20. A. M. Stuyt, Survey of International Arbitration 1794–1970 (1976). (Note that these numbers represent tribunals, not claims. Some tribunals heard only one claim; some after World War I heard 20,000.)

²¹² One cannot say that there was conscious interaction between the processes of private and public international arbitration during most of this century. Nor can the two processes be said to have been studied comparatively in detail. (A notable early exception in the form of a brief monograph is F. Kellor & M. Domke, Arbitration in International Controversy (1944).) Yet this should not be surprising. The joint existence of the two processes is a rather recent phenomenon, international commercial arbitration generally only having flourished since World War II. Sociologically, even today the two processes remain distinct, in part because, except for certain arbitrators, two very different groups deal with public and private international arbitration. (See supra note 28.) For a recent valuable interactive discussion of the two processes, see Vagts, Dispute-Resolution Mechanisms in International Business, 203 Recueil des Cours 9, 71–88 (1987 III).

In a practical sense, the lack of attention presented few problems until the Iran-United States Claims Tribunal. The Tribunal brought under one roof both public and private international arbitration and the two groups associated with such proceedings. Government officials found themselves pondering the significance of the nationality of the awards, while private counsel contemplated the effect of declarations of nullity. On procedural matters one can find many instances of citation by the Tribunal of public international arbitral awards as precedent for procedural decisions it took in what it apparently regarded as a private international arbitral matter. In this sense, the Tribunal is serving as a vehicle whereby the groups dealing with public and private international arbitration are getting to know each other and each other’s work.

²¹³ The institution of diplomatic protection must always have been somewhat suspect in the mind of the national involved. First, the national had to seek the consent of his or her government to raise the claim; second, the claim on the public plane could become politicized and thus subject to unknown influences; and third, the enforceability of any resulting award was uncertain. Moreover, the enforceability of awards based on diplomatic protection, uncertain as that was, became yet more uncertain after World War II, as the threat of using armed force (which, it has been argued, stood behind the claims commissions at the turn of the century) was, at least in theory, prohibited. See Shihata, Towards a Greater Depoliticization of Investment Disputes: The Roles of ICSID and M1GA, 1 Foreign Investment L. Rev. 1 (1986).

²¹⁴ See, e.g., Buxbaum, supra note 19. See also C. Lipson, Standing Guard: Protecting Foreign Capital in the Nineteenth and Twentieth Centuries (1985).

²¹⁵ The private, rather than governmental, hand in the design of the public law aspects of the private international arbitration system arguably is exemplified also by the recent rapid transformation of municipal arbitration statutes, which reduce court interference to a minimum while retaining the imprimatur of the state’s endorsement of the validity of the process. See supra note 64.

²¹⁶ See generally Delaume, supra note 38.

²¹⁷ Art. 6.2, Treaty on Fisheries, Apr. 2, 1987, 26 ILM 1048, 1062 (1987).

²¹⁸ Arbitration awards may be brought directly before the courts of 82 countries under the New York Convention. UNCITRAL, Status of Conventions, UN Doc. A/CN.9/325 (May 17, 1989). Moreover, although one cynically might speculate that a local judge in some instances would feel constrained to contact his or her foreign ministry for “guidance,” in time judges likely will fill the roles given. On the other hand, recognizing once again the evolutionary interplay of the various mechanisms, a counterbalancing consequence of globally elevating the international role of national judiciaries may be that as they are called upon to address more disputes with an international flavor, the more likely it will be that judicial doctrines will arise to assure deference to, and thereby enable courts to avoid embarrassment of, the executive.