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Home EJIL Analysis The Iranian Suit against the US Sanctions and the 1955 Treaty of Amity: Brilliant Plan or Aberration?

The Iranian Suit against the US Sanctions and the 1955 Treaty of Amity: Brilliant Plan or Aberration?

Published on September 7, 2018        Author: 
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The Iranian economy is already feeling the effects of the United States economic sanctions that are successively being reinstated following the US withdrawal from the Joint Comprehensive Plan of Action (JCPOA) on 8 May 2018. In an attempt to save what can be saved, Iran seized the International Court of Justice in July requesting the latter to order and declare that the 8 May and subsequent sanctions are unlawful; that the United States shall stop its threats with respect to the further announced sanctions and that it shall compensate Iran. The claim is accompanied by a request for provisional measures by which Iran seeks to obtain, in particular, the immediate suspension of the sanctions and the non-implementation of the sanctions announced. Last week, both parties met in court for the hearings on the provisional measures request.

Iran has not claimed a violation of the JCPOA but alleges breaches of the Treaty of Amity, Economic Relations, and Consular Rights signed by Iran and the United States in 1955. The reason is simple: neither Iran nor the United States accepts the compulsory jurisdiction of the ICJ, both states having withdrawn their optional clause declarations. A compromis not being in sight, Iran can only ground the ICJ’s jurisdiction on a compromissory clause. While the JCPOA does not contain such a clause, the Treaty of Amity stipulates in its Article XXI (2) that “[a]ny dispute between the High Contracting Parties as to the interpretation or application of the present Treaty, not satisfactorily adjusted by diplomacy, shall be submitted to the International Court of Justice, unless the High Contracting Parties agree to settlement by some other pacific means.”

The case, and the provisional measures request, raises many interesting questions, including  for example, whether the mainly economic damages alleged by Iran are irreparable as is required for the indication of such measures, and whether the request could possibly pre-empt the decision on the merits. However, this post is uniquely concerned with whether the idea to rely on the Treaty of Amity helps overcome the hurdle of jurisdiction. While the existence of jurisdiction need only be proved prima facie in the provisional measures phase, the Court will at a later stage have to take a definite decision (assuming the case is not dismissed for manifest lack of jurisdiction at the provisional measures stage). One of the most problematic issues is whether the dispute is about the interpretation or application of the Treaty of Amity despite the existence of the JCPOA. If this is the case, invoking the Treaty of Amity was a smart move by Iran.

The Iranian idea can potentially be attacked in two places: the actual scope of the application and the request, as well as the potential inapplicability of the Treaty of Amity.

Is the case in reality a dispute on the JCPOA?

Professor Pellet, representative of Iran, spent a lot of time in his pleading on the provisional measures request explaining that Iran neither asks the Court to adjudicate on the US withdrawal of the JCPOA, nor that it invokes violations of the JCPOA itself, but that it only refers to the reintroduction of sanctions and breaches of the Treaty of Amity. According to him, if the JCPOA is of some relevance to the case, it only forms the “context” in which the contested sanctions were adopted (Verbatim Record, 2018/16, p. 30). The counter-argument of the United States is two-fold: First, the Iranian application and request do refer to the JCPOA by seeking the termination of “the 8 May sanctions that the USA previously decided to lift in connection with the Joint Comprehensive Plan of Action” (Application, para. 2). Second, the Iranian claim would eventually come down to enforcing the JCPOA through the ICJ jurisdiction: “This is in fact a dispute about the JCPOA”, the Treaty of Amity being “simply a device in Iran’s search for a jurisdictional basis” (Verbatim Record, 2018/17, S. 13 f, 25).

The US arguments are not necessarily persuasive. As regards the first part, both parties agree that the Court itself determines the true object of the dispute (see ICJ, Nuclear Tests, New Zealand v. France (Judgment), para. 31). While giving particular attention to the formulation chosen by the applicant, the Court does not confine itself to that formulation (ICJ, Fisheries Jurisdiction, Canada v. Spain (Judgment), para. 30). It is true that the 8 May sanctions are, in terms of fact, closely linked to the US withdrawal from the JCPOA. However, it is not clear why this should make the case a dispute about the obligations stemming from that agreement as long as only breaches of the Treaty of Amity are invoked. A finding that Iran is in fact requesting the Court to declare breaches of the JCPOA would amount to changing the object of the application rather than specifying it. The second branch of the US argument – the case’s outcome would amount to enforcing the JCPOA – appears no less difficult to accept. If, before the conclusion of the JCPOA, Iran had claimed that the US sanctions violate the Treaty of Amity, no-one would have doubted the dispute being about the application of this treaty. However, a dispute that as such relates to a certain treaty does not become the exclusive matter of a different agreement by the sole fact that the applicant’s request, if successful, would eventually arrive at the same result as if the latter agreement were put into effect. The US argument ignores that there can be different legal norms that, when applied, reach the same result and that in principle, the applicant may choose between them.

This is not to say that the Court can decide on the alleged violations of the Treaty of Amity without touching on certain questions relating to the JCPOA – an issue I will come back to. At this stage, however, there is much to suggest that the case as such is about the Treaty of Amity, not about the JCPOA.

Is the JCPOA a lex posterior or specialis to the Treaty of Amity?

Things would be different, however, if it should turn out that the JCPOA precludes the applicability of the Treaty of Amity to all issues that are governed by the 2015 agreement. Were this to be the case, the fact that Iran only invokes breaches of the Treaty of Amity would not change the fact that the dispute would not be about the interpretation or application of the latter Treaty, since that treaty would be inapplicable. However, the United States has not, at least not explicitly, framed its argument that way.

There are two rules that could potentially be used to argue that the JCPOA takes precedence over the Treaty of Amity: the lex posterior and the lex specialis rule. Let us assume for a moment that the JCPOA (since the adoption of Security Council Resolution 2231) contains legally binding obligations. In that case it would seem persuasive to argue that the JCPOA, signed by Iran and the United States in 2015, is firstly a subsequent agreement to the Treaty of Amity, with the former precluding the applicability of the latter when the obligations under the two agreements conflict with each other. Accordingly, Iran would not, in this scenario, be able to claim a violation of the Treaty of Amity by the United States for not lifting unilateral sanctions earlier than required by the JCPOA. Similarly, the JCPOA might be considered as an agreement by which the parties established a more specific regime on the lifting and the possible reintroduction of sanctions compared to the more general rights and obligations arising from the Treaty of Amity. If that were so, Iran would not be entitled to invoke a breach of the Treaty of Amity with regard to measures permitted by the JCPOA.

However, the United States, by reintroducing those sanctions, has not acted in accordance with the JCPOA. (This is true irrespective of the binding nature of the agreement as it did not provide for unilateral exit. If one regards the agreement as non-binding, the withdrawal is simply not a breach of a legal obligation). The relevant question is therefore whether the JCPOA precludes the applicability of the Treaty of Amity also with regard to behaviour that does not comply with the former. This seems doubtful. As the United States itself has emphasised during the hearing, the dispute resolution mechanism provided by the JCPOA is limited to political channels. It is unlikely that Iran, by signing the JCPOA, intended to waive its rights stemming from an earlier treaty that, contrary to the JCPOA, provided for a legal enforcement mechanism in the event that the United States does not feel bound by the obligations arising from the JCPOA.

In any case, in order to potentially take precedence over the Treaty of Amity, the JCPOA must be legally binding. A non-binding agreement cannot create an exclusive regime precluding a party from invoking an earlier international treaty with binding effect. This might be the reason why the United States which continues to contest the binding nature of the JCPOA has so far not explicitly opted for the lex specialis or lex posterior avenue. Interestingly, if the Court decides to consider the possible preclusion of the Treaty of Amity by the JCPOA, it may incidentally need to take a position on the very disputed nature of the JCPOA (for the conflicting views see here and here). This, however, raises the interesting question to which extent the Court has the competence to incidentally treat matters that do not fall within its jurisdiction – an issue that cannot be  dealt with here in any detail (but on which see Proelß, Hitotsubashi J. L. & Pol. 46 (2018), p. 47 (50-56) with respect to UNCLOS tribunals).

Conclusion

Iran’s idea of invoking the Treaty of Amity, however curious it may sound, should hold water. The case is not in reality a dispute about the JCPOA, nor does the latter exclude the application of the Treaty of Amity. Apart from these issues, the Court will have to address other arguments the United States has advanced to contest jurisdiction. These include the question of whether the national security exception in Art. XX (1) (d) of the Treaty of Amity potentially precludes the applicability of the treaty (and not only its substantive obligations) and whether Iran has made sufficient diplomatic efforts to meet the requirements of the compromissory clause. The Court’s order on the Iranian request for provisional measures may be an indication of whether it will accept jurisdiction for the main claim. Iran is hoping for a decision before the next wave of US sanctions is implemented on November, 4. The following weeks will therefore prove important for David’s battle against Goliath.

 

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9 Responses

  1. Hannes Jöbstl

    Thank your for this excellent post Paula!

    “If, before the conclusion of the JCPOA, Iran had claimed that the US sanctions violate the Treaty of Amity, no-one would have doubted the dispute being about the application of this treaty. However, a dispute that as such relates to a certain treaty does not become the exclusive matter of a different agreement by the sole fact that the applicant’s request, if successful, would eventually arrive at the same result as if the latter agreement were put into effect. The US argument ignores that there can be different legal norms that, when applied, reach the same result and that in principle, the applicant may choose between them.”

    I had the exact same thought in mind when listening to the oral arguments. I wonder why Iran has not argued that she would have been able to invoke the Treaty of Amity also during the old, pre-JCPOA sanctions regime but decided to pursue negotiations instead (negotiations that concluded in the JCPOA).

    “Interestingly, if the Court decides to consider the possible preclusion of the Treaty of Amity by the JCPOA, it may incidentally need to take a position on the very disputed nature of the JCPOA (for the conflicting views see here and here). This, however, raises the interesting question to which extent the Court has the competence to incidentally treat matters that do not fall within its jurisdiction – an issue that cannot be dealt with here in any detail (but on which see Proelß, Hitotsubashi J. L. & Pol. 46 (2018), p. 47 (50-56) with respect to UNCLOS tribunals).”

    Interesting thought. Wouldn’t that be an opportunity to invoke the monetary gold principle? Because a finding on the legal nature of the JCPOA would also entail a finding on the resulting legal obligations for the other JCPOA signatories, which are not parties to these proceedings.

  2. Paula Fischer Paula Fischer

    Dear Hannes,

    Many thanks for your comment.

    Your idea of invoking the monetary gold principle is a very interesting thought. Certainly, the interests of the other JCPOA signatories would be affected by a finding on the nature of the pact. I’m just not sure whether they would “form the very subject-matter of the decision” (ICJ, Monetary Gold, p. 32). Also, otherwise the Court would never be in the position to determine the legal nature of a multilateral agreement in a dispute that arises between two parties without each of the other signatories intervening. I am not sure whether the monetary gold principle must be applied to that extent.

    One last thought that comes to my mind is that here, the situation is in any case special as the binding force of the JCPOA eventually depends on the interpretation of a Security Council resolution. Such an interpretation has always impacts on other states that are also addressed by the resolution. However, the ICJ has so far not been reluctant to interpret Security Council resolutions in a case between two states only.

  3. Carl N.

    Very interesting post, Paula!

    Three questions came to my mind regarding the possibility of the Treaty of Amity being disposed by the JCPOA as lex specialis/posterior.

    1. Would the Court decide on that on its own initiative? Or would the US have to raise that point as a formal objection?

    2. And if so – it seems such an argument would be quite detrimental to the US, given that it would need to, firstly, acknowledge the legal binding nature of the JCPOA, and secondly, also take a position regarding its withdrawal (i.e. what effect the US’s withdrawal has legally speaking).

    3. In any case, leaving aside monetary gold, would an argument from the US on these questions overcome the issue of jurisdiction to render a decision on these issues?

    Interested in hearing what you and other readers think on these points!

  4. Paula Fischer Paula Fischer

    Dear Carl,

    Thank you for your interesting questions. These would be my thoughts so far:

    To question 1) The US (even if on a slightly different ground) contests the jurisdiction of the Court. The question is therefore not whether the Court must positively establish jurisdiction when the party entitled to rely on a possible jurisdictional objection has chosen not to raise it. The relevant question is whether the Court must investigate a specific legal argument that has not been raised by this party. I would consider this as being covered by the iura novit curia rule that applies to ICJ proceedings. Accordingly, if you consider the facts for the claim that the JCPOA is a lex posterior/specialis as being sufficiently established (as they appear to me), this claim would have to be investigated by the Court proprio motu. A formal objection by the US would not be necessary.

    In addition on this point: some arguments the US made during the hearing on provisional measures can in fact be read as implying that the JCPOA is better suited to govern the relevant matters – which is the very idea of lex specialis (“indeed, the JCPOA’s dispute resolution mechanism contemplates exactly the kind of dispute which has now arisen, namely, that a participant has decided to cease implementing some or all of the commitments under that instrument”, Verbatim Record 2018/17 p. 26). The US did not, however, develop this idea further.

    To question 2) That is one of the interesting things about this case: the contradicting views of Iran and the US on the legal nature of the JCPOA do not fit their respective interests, if it should ever come to determining whether the JCPOA precludes the applicability of the Treaty of Amity. If the US had acknowledged that the JCPOA is binding, it might have had a point saying that this agreement is the only relevant law applicable to the case and that this agreement, however, does not contain a compromissory clause. You are right that the withdrawal from the JCPOA makes things more complicated. However, I would suggest that the argument (even if I eventually do not agree with it) still could have been an option to consider: if the JCPOA were binding and if there is no unilateral right to withdraw, the withdrawal would not end the JCPOA obligations. They would therefore still take precedence over the Treaty of Amity (assuming that there is such precedence in the first place). In any case, this is not what the US is arguing.

    To question 3) You mean that the Court could not even decide on these issues because it would lack jurisdiction to decide on matters related to the JCPOA in the first place? I touched on this aspect by saying that this case raises questions about the capacity of the Court to incidentally treat matters that as such do not fall within its jurisdiction ratione materiae. The particularity here lies in the fact that these issues are relevant not only for the merits, but already for the establishment of jurisdiction of the Court (does the compromissory clause apply or not?). For this phase, I believe these issues should be covered by the compétence de la compétence of the Court. As far as I can see, the Court does not need to decline jurisdiction because determining jurisdiction (!) necessitates a decision on a matter that as such is outside the jurisdiction. This of course does not preclude the possibility that the Court – as a result of its findings – declines jurisdiction.

    I would be very interested to know your opinion on these issues.

  5. Mark

    Thanks for this note. I’m interested in hearing a bit more on the characterization of the dispute. The dispute can be formulated to be within the treaty of amity. But if the ICJ follows the Chagos arbitration precedent, it will “evaluate where the relative weight of the dispute lies” [para 211]. If so the USA is surely right that the dispute is about the JCPOA and not the treaty and the ICJ won’t have jurisdiction.

  6. Paula Fischer Paula Fischer

    The order on the request for provisional measures is out: https://www.icj-cij.org/files/case-related/175/175-20181003-ORD-01-00-EN.pdf
    The Court finds that there is jurisdiction prima facie. Here are the two paragraphs that are relevant for the present context:

    “38. The Court considers that the fact that the dispute between the Parties arose in connection with and in the context of the decision of the United States to withdraw from the JCPOA does not in and of itself exclude the possibility that the dispute relates to the interpretation or application of the Treaty of Amity (cf. Oil Platforms (Islamic Republic of Iranv. United States of America), Preliminary Objection, Judgment, I.C.J. Reports 1996(II), pp.811-812, para.21). In general terms, certain acts may fall within the ambit of more than one legal instrument and a dispute relating to those acts may relate to the “interpretation or application” of more than one treaty or other instrument. To the extent that the measures adopted by the UnitedStates following its decision to withdraw from the JCPOA might constitute violations of certain obligations under the 1955 Treaty, such measures relate to the interpretation or application of that instrument.

    “39. The Court also observes that the JCPOA does not grant exclusive competence to the dispute settlement mechanism it establishes with respect to measures adopted in its context and which may fall under the jurisdiction of another dispute settlement mechanism. Therefore, the Court considers that the JCPOA and its dispute settlement mechanism do not remove the measures complained of from the material scope of the Treaty of Amity nor exclude the applicability of its compromissory clause.“

  7. Nicolas Boeglin

    Dear Paula

    Many thanks for the update and the valuable information provided.

    In a short note I published on public hearings,last August, I indicated what I called “Un pequeño detalle de forma”: Iran´s legal team took the floor during the hearings with a group of selected and experimented lawyers speaking in the two official languages of the Court, while USA was defended by a very limited team, in only one language.

    It is not a legal issue in itself, just a detail, showing (maybe) that the US didn´t consider necessary to paticipate to the hearings with a solid team of experimented legal experts.

    http://derechointernacionalcr.blogspot.com/2018/08/iran-contra-estados-unidos-audiencias.html

    Sincerely yours

    Nicolas Boeglin

    Sincerely yours

    Nicolas Boeglin

  8. Nicolas Boeglin

    Dear Paula

    Many thanks for the update and the valuable information provided.

    In a short note I published on public hearings,last August, I indicated what I called “Un pequeño detalle de forma”: Iran´s legal team took the floor during the hearings with a group of selected and experimented lawyers speaking in the two official languages of the Court, while USA was defended by a very limited team, in only one language.

    It is not a legal issue in itself, just a detail, showing (maybe) that the US didn´t consider necessary to paticipate to the hearings with a solid team of experimented legal experts.

    http://derechointernacionalcr.blogspot.com/2018/08/iran-contra-estados-unidos-audiencias.html

    Sincerely yours

    Nicolas Boeglin

  9. Paula Fischer Paula Fischer

    Dear Nicolas,

    Thank you for the reference to your interesting article. That is indeed a very interesting pequeño detalle de forma. It has surely had an impact on the performance of Iran and maybe on the outcome of the provisional measures proceeding (even though, of course, it is another thing to what extend Iran can be happy with today’s order that eventually accepted the request to quite a limited extend only.)