Islamic Republic of Iran v. The United States of America

The Iran-United States Claims Tribunal was established by an international agreement, the Algiers Declarations, between Iran (plaintiff) and the United States (defendant) to decide claims between nationals of either Iran or the United States against each other. Under the Algiers Declarations, Iran and the United States were obligated to implement awards issued by the tribunal in such a way that the awards would be treated as valid and enforceable in each jurisdiction. In a prior proceeding before the tribunal, known as the Avco case, the tribunal issued an award in favor of an Iranian party against a United States party. Iran sought to enforce the tribunal’s award in United States courts. The United States Court of Appeals for the Second Circuit held that the award was unenforceable because it violated Article V of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), in that the United States party was deprived of an opportunity to present its case in a meaningful manner before the tribunal. In its decision, the Second Circuit adopted the reasoning of the dissenting tribunal member. Upon denial of enforcement of the Avco award, Iran filed a new claim in the Iran-United States Claims Tribunal, seeking to establish that the United States breached its obligation under the Algiers Declarations and to recover the amount of the Avco award, plus interest, from the United States. Iran also brought claims to recover the amount of 24 other awards, even though it had not yet sought enforcement of these awards, arguing that the United States was obligated to satisfy the awards on behalf of its nationals because it was likely that enforcement efforts for those awards would similarly fail.