Alleged violations of the 1955 Treaty of Amity, Economic Relations, and Consular Rights (Islamic Republic of Iran v. United States of America)

On 16 July 2018, the Islamic Republic of Iran (hereinafter "Iran") filed in the Registry of the Court an Application instituting proceedings against the United States of America (hereinafter the "United States") with regard to alleged violations of the Treaty of Amity, Economic Relations, and Consular Rights, which was signed by the two States in Tehran on 15 August 1955 and entered into force on 16 June 1957 (hereinafter the "Treaty of Amity" or the "1955 Treaty").

In its Application, Iran seeks to found the Court's jurisdiction on Article 36, paragraph 1, of the Statute of the Court and on Article XXI, paragraph 2, of the 1955 Treaty.

On 16 July 2018, Iran also submitted a Request for the indication of provisional measures, referring to Article 41 of the Statute and to Articles 73, 74 and 75 of the Rules of Court.

The Registrar immediately communicated to the Government of the United States the Application, in accordance with Article 40, paragraph 2, of the Statute of the Court, and the Request for the indication of provisional measures, in accordance with Article 73, paragraph 2, of the Rules of Court. He also notified the Secretary-General of the United Nations of the filing of the Application and the Request for the indication of provisional measures by Iran.

Pursuant to Article 40, paragraph 3, of the Statute, the Registrar notified the Member States of the United Nations, through the Secretary-General, and any other State which is entitled to appear before the Court, of the filing of the Application, by transmission of the printed bilingual text of that document.

On 18 July 2018, the Registrar informed both Parties that the Member of the Court of the nationality of the United States, pursuant to Article 24, paragraph 1, of the Statute, had notified the President of the Court of her intention not to participate in the decision of the case. In accordance with Article 31 of the Statute and Article 37, paragraph 1, of the Rules of Court, the United States chose Mr. Charles Brower to sit as judge ad hoc in the case.

Since the Court included upon the Bench no judge of Iranian nationality, Iran proceeded to exercise the right conferred upon it by Article 31 of the Statute to choose a judge ad hoc to sit in the case; it chose Mr. Djamchid Momtaz.

By an Order of 3 October 2018, the Court, having heard the Parties, indicated the following provisional measures:

"(1) The United States of America, in accordance with its obligations under the 1955 Treaty of Amity, Economic Relations, and Consular Rights, shall remove, by means of its choosing, any impediments arising from the measures announced on 8 May 2018 to the free exportation to the territory of the Islamic Republic of Iran of

(i) medicines and medical devices;

(ii) foodstuffs and agricultural commodities; and

(iii) spare parts, equipment and associated services (including warranty, maintenance, repair services and inspections) necessary for the safety of civil aviation;

(2) The United States of America shall ensure that licences and necessary authorizations are granted and that payments and other transfers of funds are not subject to any restriction in so far as they relate to the goods and services referred to in point (1);

(3) Both Parties shall refrain from any action which might aggravate or extend the dispute before the Court or make it more difficult to resolve." (I.C.J. Reports 2018 (II), p. 652, para. 102.)

For the United States: Mr. Marik A. String,

Sir Daniel Bethlehem,

Ms Lisa J. Grosh,

Ms Kimberly A. Gahan,

Ms Laurence Boisson de Chazournes.

For Iran: Mr. Hamidreza Oloumiyazdi,

Mr. Vaughan Lowe,

Mr. Samuel Wordsworth,

Mr. Jean-Marc Thouvenin,

Mr. Alain Pellet.

In the Application, the following claims were made by Iran:

"Iran requests the Court to adjudge, order and declare that:

(a) The USA, through the 8 May and announced further sanctions referred to in the present Application, with respect to Iran, Iranian nationals and companies, has breached its obligations to Iran under Articles IV (1), VII (1), VIII (1), VIII (2), IX (2) and X (1) of the Treaty of Amity;

(b) The USA shall, by means of its own choosing, terminate the 8 May sanctions without delay;

(c) The USA shall immediately terminate its threats with respect to the announced further sanctions referred to in the present Application;

(d) The USA shall ensure that no steps shall be taken to circumvent the decision to be given by the Court in the present case and will give a guarantee of non-repetition of its violations of the Treaty of Amity;

(e) The USA shall fully compensate Iran for the violation of its international legal obligations in an amount to be determined by the Court at a subsequent stage of the proceedings. Iran reserves the right to submit and present to the Court in due course a precise evaluation of the compensation owed by the USA."

In the written proceedings on the merits, the following submissions were presented on behalf of the Government of Iran in its Memorial:

"Iran respectfully requests the Court to adjudge, order and declare that:

(a) The United States, through the measures that were implemented pursuant to or in connection with the U.S. Presidential Memorandum of 8 May 2018 and announced further measures, with respect to Iran, Iranian nationals and companies, has breached its obligations to Iran under Articles IV (1), IV (2), V (1), VII (1), VIII (1), VIII (2), IX (2), IX (3) and X (1) of the Treaty of Amity;

(b) The United States shall, by means of its own choosing, terminate the measures that were implemented pursuant to or in connection with the U.S. Presidential Memorandum of 8 May 2018 and announced further measures without delay;

(c) The United States shall immediately terminate its threats with respect to announced further sanctions;

(d) The United States shall ensure that no steps shall be taken to circumvent the decision to be given by the Court in the present case and will give a guarantee of non-repetition of its violations of the Treaty of Amity;

(e) The United States shall fully compensate Iran for the violation of its international legal obligations in an amount to be determined by the Court at a subsequent stage of the proceedings. Iran reserves the right to submit and present to the Court in due course a precise evaluation of the compensation owed by the United States."

"[T]he United States requests that the Court:

(a) Dismiss Iran's claims in their entirety as outside the Court's jurisdiction.

(b) Dismiss Iran's claims in their entirety as inadmissible.

(c) Dismiss Iran's claims in their entirety as precluded by Article XX, paragraph 1 (b) of the Treaty of Amity.

(d) Dismiss Iran's claims in their entirety as precluded by Article XX, paragraph 1 (d) of the Treaty of Amity.

(e) Dismiss as outside the Court's jurisdiction all claims, brought under any provision of the Treaty of Amity, that are predicated on third country measures."

"Iran respectfully requests that the Court:

(a) reject and dismiss the Preliminary Objections of the United States of America; and

(b) adjudge and declare:

(i) that the Court has jurisdiction over the entirety of the claims presented by Iran; and

(ii) that Iran's claims are admissible."

On behalf of the Government of the United States,

at the hearing of 18 September 2020:

"For the reasons explained during these hearings and any other reasons the Court might deem appropriate, the United States of America requests that the Court uphold the U.S. preliminary objections set forth in its written submission and at this hearing and decline to entertain the case. Specifically, the United States of America requests that the Court:

(a) Dismiss Iran's claims in their entirety as outside the Court's jurisdiction.

(b) Dismiss Iran's claims in their entirety as inadmissible.

(c) Dismiss Iran's claims in their entirety as precluded by Article XX, paragraph 1 (b) of the Treaty of Amity.

(d) Dismiss Iran's claims in their entirety as precluded by Article XX, paragraph 1 (d) of the Treaty of Amity.

(e) Dismiss as outside the Court's jurisdiction all claims, brought under any provision of the Treaty of Amity, that are predicated on third country measures."

On behalf of the Government of Iran,

at the hearing of 21 September 2020:

"The Islamic Republic of Iran respectfully requests that the Court:

(a) reject and dismiss the Preliminary Objections of the United States of America; and

(b) adjudge and declare:

(i) that the Court has jurisdiction over the entirety of the claims presented by Iran; and

(ii) that Iran's claims are admissible."

In the present proceedings, Iran alleges violations by the United States of the Treaty of Amity, which was signed by the Parties on 15 August 1955 and entered into force on 16 June 1957 (see paragraph 1 above). It is not disputed by the Parties that on the date of the filing of the Application, namely, on 16 July 2018, the Treaty of Amity was in force. In accordance with Article XXIII, paragraph 3, of the Treaty of Amity, "[e]ither High Contracting Party may, by giving one year's written notice to the other High Contracting Party, terminate the present Treaty at the end of the initial ten-year period or at any time thereafter". By a diplomatic Note dated 3 October 2018 addressed by the United States Department of State to the Ministry of Foreign Affairs of Iran, the United States, in accordance with Article XXIII, paragraph 3, of the Treaty of Amity, gave "notice of the termination of the Treaty".

"Iran's many failures and breaches of its obligations to comply with its NPT Safeguards Agreement and the absence of confidence that Iran's nuclear programme is exclusively for peaceful purposes resulting from the history of concealment of Iran's nuclear activities, the nature of those activities and other issues arising from the Agency's verification of declarations made by Iran since September 2002"

and requested the Director General to report the matter to the Security Council of the United Nations.

On 31 July 2006, the Security Council, acting under Article 40 of Chapter VII of the Charter of the United Nations, adopted resolution 1696 (2006), in which it noted, with serious concern, Iran's decision "to resume enrichment-related activities" and demanded "in this context, that Iran shall suspend all enrichment-related and reprocessing activities, including research and development, to be verified by the IAEA". The Security Council further expressed its intention, in the event of non-compliance by Iran, to adopt appropriate measures under Article 41 of Chapter VII of the Charter of the United Nations, "to persuade Iran to comply with [the] resolution and the requirements of the IAEA".

The United States has raised five preliminary objections. The first two relate to the jurisdiction of the Court ratione materiae to entertain the case on the basis of Article XXI, paragraph 2, of the Treaty of Amity. The third contests the admissibility of Iran's Application by reason of an alleged abuse of process and on grounds of judicial propriety. The last two are based on subparagraphs (b) and (d) of Article XX, paragraph 1, of the Treaty of Amity. Although, according to the Respondent, they relate neither to the jurisdiction of the Court nor to the admissibility of the Application, the Respondent requests a decision upon them before any further proceedings on the merits.

The Court will begin by considering issues related to its jurisdiction.

The United States contests the Court's jurisdiction to entertain the Application of Iran. It submits that the dispute before the Court falls outside the scope ratione materiae of Article XXI, paragraph 2, of the Treaty of Amity, the basis of jurisdiction invoked by Iran, which provides that:

"Any 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."

First, the United States contends that "the true subject matter of this case is a dispute as to the application of the JCPOA, an instrument entirely distinct from the Treaty of Amity, with no relationship thereto". Therefore, in the Respondent's view, the subject-matter of the dispute which Iran seeks to have settled by the Court is not "the interpretation or application of the... Treaty" within the meaning of the second paragraph of Article XXI, as cited above.

Secondly, the United States argues that the vast majority of the measures challenged by Iran fall outside the scope ratione materiae of the Treaty of Amity, because they principally concern trade and transactions between Iran and third countries, or their companies and nationals, and not between Iran and the United States, or their companies and nationals.

"[I]t is the Court's duty to isolate the real issue in the case and to identify the object of the claim. It has never been contested that the Court is entitled to interpret the submissions of the parties, and in fact is bound to do so; this is one of the attributes of its judicial functions." (Nuclear Tests (Australia v. France), Judgment, I.C.J. Reports 1974, p. 262, para. 29; Nuclear Tests (New Zealand v. France), Judgment, I.C.J. Reports 1974, p. 466, para. 30.)

The Court's determination of the subject-matter of the dispute is made "on an objective basis" (Obligation to Negotiate Access to the Pacific Ocean (Bolivia v. Chile), Preliminary Objection, Judgment, I.C.J. Reports 2015 (II), p. 602, para. 26), "while giving particular attention to the formulation of the dispute chosen by the Applicant" (Fisheries Jurisdiction (Spain v. Canada), Jurisdiction of the Court, Judgment, I.C.J. Reports 1998, p. 448, para. 30). To identify the subject-matter of the dispute, the Court bases itself on the application, as well as on the written and oral pleadings of the parties. In particular, it takes account of the facts that the applicant identifies as the basis for its claim (Obligation to Negotiate Access to the Pacific Ocean (Bolivia v. Chile), Preliminary Objection, Judgment, I.C.J. Reports 2015 (II), pp. 602-603, para. 26).

"[L]egal disputes between sovereign States by their very nature are likely to occur in political contexts, and often form only one element in a wider and longstanding political dispute between the States concerned. Yet never has the view been put forward before that, because a legal dispute submitted to the Court is only one aspect of a political dispute, the Court should decline to resolve for the parties the legal questions at issue between them." (United States Diplomatic and Consular Staff in Tehran (United States of America v. Iran), Judgment, I.C.J. Reports 1980, p. 20, para. 37.)

The Respondent contends that the measures in the first three categories are "third country measures" which do not fall within the scope of the Treaty of Amity. It states that its second objection to jurisdiction is not directed at Iran's claims relating to measures in the fourth category.

Having so characterized the measures challenged by Iran in these proceedings, the United States argues that such measures do not fall within the terms of any of the provisions of the Treaty of Amity, which contains no clause that might require the United States either to take or to refrain from taking any measures in respect of trade or transactions between Iran and a third country. In particular, according to the United States, such measures do not fall within the terms of any of the provisions of the Treaty of Amity which Iran claims to have been violated, namely Articles IV (paras. 1 and 2), V (para. 1), VII (para. 1), VIII (paras. 1 and 2), IX (paras. 2 and 3) and X (para. 1).

With regard to Article VIII, paragraphs 1 and 2, which set forth certain obligations relating to the exportation and importation of products, the United States considers that these provisions concern only products of Iran destined for import to the territory of the United States or products of the United States destined for export to Iran. For similar reasons, according to the United States, the measures concerning third States fall outside the scope of Article IX, paragraphs 2 and 3, which require each party to accord certain treatment to the companies and nationals of the other party in matters of importation and exportation, and in respect of the ability of companies to obtain marine insurance. Lastly, the United States points out that Article X, paragraph 1, which provides that "[b]etween the territories of the two High Contracting Parties there shall be freedom of commerce and navigation", contains an "important territorial limitation" and therefore does not apply to goods that are subject to intermediate transactions with third countries.

Reviewing the various provisions of the Treaty which it claims have been violated, Iran concludes that "the violations of the Treaty of 1955 pleaded by Iran... fall within the provisions of the Treaty and [that], as a consequence, the dispute is one which the Court has jurisdiction ratione materiae to entertain, pursuant to Article XXI, paragraph 2", thus echoing the terms of the well-known statement of the Court in the Oil Platforms case.

The Court notes, however, that, as regards this category, the United States has declared that it "reserves the right to argue that some or all of Iran's claims based on the revocation of particular licensing actions are outside the scope of the Treaty" at a later stage in the proceedings, should they continue.

However, it cannot be inferred from the above that all the measures at issue are capable of constituting breaches of the United States' obligations under the Treaty of Amity. What is decisive in this regard is whether each of the measures — or category of measures — under consideration is of such a nature as to impair the rights of Iran under the various provisions of the Treaty of Amity which the Applicant claims to have been violated.

In the view of the Court, there are no exceptional circumstances that would justify considering Iran's Application inadmissible on the ground of abuse of process. In particular, the fact that Iran only challenged the consistency with the Treaty of Amity of the measures that had been lifted in conjunction with the JCPOA and then reinstated in May 2018, without discussing other measures affecting Iran and its nationals or companies, may reflect a policy decision. However, as was noted in Border and Transborder Armed Actions (Nicaragua v. Honduras), the Court's judgment "cannot concern itself with the political motivation which may lead a State at a particular time, or in particular circumstances, to choose judicial settlement" (Jurisdiction and Admissibility, Judgment, I.C.J. Reports 1988, p. 91, para. 52). In any event, the fact that most of Iran's claims concern measures that had been lifted in conjunction with the JCPOA and were later reinstated does not indicate that the submission of these claims constitutes an abuse of process.

The United States submits that in the present case its objections based on Article XX, paragraph 1 (b) and (d) — which provide that the Treaty of Amity does not preclude the application of measures "relating to fissionable materials" or that are necessary to protect a State's "essential security interests" — fall into this third category of objections under Article 79 of the Rules of Court and are of an exclusively preliminary character. The Respondent argues that a determination on these objections can be made on the basis of the facts already before the Court, without deciding on the merits of the case and without prejudging Iran's claims. According to the United States, even though in its jurisprudence the Court has decided that objections based on Article XX, paragraph 1, of the Treaty of Amity were defences on the merits to be considered at a subsequent phase, in the present case the Court should examine them as a preliminary matter, in particular because they are "severable from the merits of Iran's claims". In the "interests of fairness, procedural economy, and the sound administration of justice", the United States maintains that the Court should render an early decision on these questions.

In the United States' view, all measures at issue in this case can be categorized as "nuclear-related"; therefore, they are all covered by Article XX, paragraph 1 (b), of the Treaty of Amity. The United States contends that, in light of the text and context of this provision, the phrase "relating to fissionable materials" gives a party a considerable degree of discretion for taking "a full range of measures developed and adopted to control and prevent proliferation of sensitive nuclear materials", and not only measures regulating direct trade in fissionable materials.

Additionally, the United States contends that the measures at issue fall within Article XX, paragraph 1 (d), of the Treaty of Amity. The Respondent argues that the notion of essential security interests referred to in this provision is broad; to reach the required threshold, measures do not need to be taken in relation to an armed attack, or with regard to matters considered by the Security Council as a threat to international peace and security. The United States contends that "wide discretion" and "substantial deference" must be granted to the State invoking subparagraph (d) in determining whether national security is at stake and what measures are necessary.

Iran contends that there is no reason for the Court to depart from its findings in the case concerning Certain Iranian Assets, in which it concluded that "subparagraphs (c) and (d) of Article XX, paragraph 1, do not restrict its jurisdiction but merely afford the Parties a defence on the merits". Moreover, the Applicant submits that an extensive factual analysis would be necessary to decide on the objections based on subparagraphs (b) and (d) of Article XX, paragraph 1, and that such an analysis can only be conducted at the merits stage; it is "unsuitable and improper" at the present stage. Indeed, the facts and arguments in support of these objections are substantially the same as the ones forming the basis of the case on the merits. The Applicant submits that if the Court were to pronounce at this stage on the defences of Article XX, paragraph 1, Iran's rights would form the very subject-matter of the decision. Moreover, in the Applicant's view, at this stage of the proceedings the Court does not have in its possession all the necessary factual elements to make a determination on the objections raised on the basis of Article XX, paragraph 1 (b) and (d).

"1. The present Treaty shall not preclude the application of measures:

...............................................................

(b) relating to fissionable materials, the radio-active by-products thereof, or the sources thereof;

...............................................................

(d) necessary to fulfill the obligations of a High Contracting Party for the maintenance or restoration of international peace and security, or necessary to protect its essential security interests."

The Court recalls that in the Oil Platforms case (Islamic Republic of Iran v. United States of America), it found that "Article XX, paragraph 1 (d), [of the Treaty of Amity] does not restrict its jurisdiction in the present case, but is confined to affording the Parties a possible defence on the merits" (Preliminary Objection, Judgment, I.C.J. Reports 1996 (II), p. 811, para. 20). A similar view was expressed in the case concerning Certain Iranian Assets (Islamic Republic of Iran v. United States of America) (Preliminary Objections, Judgment, I.C.J. Reports 2019 (I), p. 25, para. 45), where the Court noted that the interpretation given to Article XX, paragraph 1, with regard to subparagraph (d) also applies to subparagraph (c), which concerns measures "regulating the production of or traffic in arms, ammunition and implements of war". The Court observed that in this respect "there are no relevant grounds on which to distinguish [subparagraph (c)] from Article XX, paragraph 1, subparagraph (d)" (ibid., p. 25, para. 46). The Court finds that there are equally no relevant grounds for a distinction with regard to subparagraph (b), which may only afford a possible defence on the merits.

THE COURT,

(1) Unanimously,

Rejects the preliminary objection to its jurisdiction raised by the United States of America according to which the subject-matter of the dispute does not relate to the interpretation or application of the Treaty of Amity, Economic Relations, and Consular Rights of 1955;

(2) Unanimously,

Rejects the preliminary objection to its jurisdiction raised by the United States of America relating to the measures concerning trade or transactions between the Islamic Republic of Iran (or Iranian nationals and companies) and third countries (or their nationals and companies);

(3) By fifteen votes to one,

Rejects the preliminary objection to the admissibility of the Application raised by the United States of America;

IN FAVOUR: President Yusuf; Vice-President Xue; Judges Tomka, Abraham, Bennouna, Cançado Trindade, Gaja, Sebutinde, Bhandari, Robinson, Crawford, Gevorgian, Salam, Iwasawa; Judge ad hoc Momtaz;

AGAINST: Judge ad hoc Brower;

(4) By fifteen votes to one,

Rejects the preliminary objection raised by the United States of America on the basis of Article XX, paragraph 1 (b), of the Treaty of Amity, Economic Relations, and Consular Rights of 1955;

IN FAVOUR: President Yusuf; Vice-President Xue; Judges Tomka, Abraham, Bennouna, Cançado Trindade, Gaja, Sebutinde, Bhandari, Robinson, Crawford, Gevorgian, Salam, Iwasawa; Judge ad hoc Momtaz;

AGAINST: Judge ad hoc Brower;

(5) Unanimously,

Rejects the preliminary objection raised by the United States of America on the basis of Article XX, paragraph 1 (d), of the Treaty of Amity, Economic Relations, and Consular Rights of 1955;

(6) By fifteen votes to one,

Finds, consequently, that it has jurisdiction, on the basis of Article XXI, paragraph 2, of the Treaty of Amity, Economic Relations, and Consular Rights of 1955, to entertain the Application filed by the Islamic Republic of Iran on 16 July 2018, and that the said Application is admissible.

IN FAVOUR: President Yusuf; Vice-President Xue; Judges Tomka, Abraham, Bennouna, Cançado Trindade, Gaja, Sebutinde, Bhandari, Robinson, Crawford, Gevorgian, Salam, Iwasawa; Judge ad hoc Momtaz;

AGAINST: Judge ad hoc Brower.

Done in English and in French, the English text being authoritative, at the Peace Palace, The Hague, this third day of February, two thousand and twenty-one, in three copies, one of which will be placed in the archives of the Court and the others transmitted to the Government of the Islamic Republic of Iran and the Government of the United States of America, respectively.

Judge TOMKA appends a declaration to the Judgment of the Court; Judge ad hoc BROWER appends a separate, partly concurring and partly dissenting, opinion to the Judgment of the Court.