Issues of nationality have a direct relationship with one's private life. Gaining knowledge of Claimant's private life is not always easy for the Respondent.... If the Respondent fails to present evidence in rebuttal of Claimant's dominant and effective U.S. nationality, it does not [necessarily] mean that Claimant's claim is established, and it must not be considered that the Respondent has conceded to Claimant's claim.
Sometime in April or May 1979, Teheran newspapers published a Decree of the Islamic Republic of Iran. Although [a] copy of the Decree is not now available to the claimant, the substance of the Decree follows.
The Islamic Republic of Iran decreed that members of certain families, including the claimant and his family, could no longer own real estate or personal property of any kind from that time forward and could not lawfully transfer or otherwise sell real estate or personal property theretofore owned by them. The claimant was, therefore, deprived of all his right, title and interest in and to the real property described herein below.
The real property... was, to the best of the claimant's knowledge, seized by local governmental officials who have transferred the real property to third parties.
Thus Claimant's contention that Order No. 291 mentioned under item 50 of the list in question [the entry for "Aryeh"] relates to him has no basis in fact. The truth of the matter is that on 14 May 1979 the item numbers of the Orders issued by the revolutionary courts had not reached No. 291. Mention of No. 291 in the revolutionary court orders registration book on the date of 14 May 1979 is a mere slip of the pen. The person who prepared this list, who was a petty administrative employee, did not exercise sufficient care and diligence in preparing it.
At the Hearing, the Respondent reiterated that the entry was a "mistake" due to the "carelessness" of a clerk.
At the Hearing, the Claimant invoked both legal and equitable considerations in contesting the Respondent's interpretation of the caveat. He pointed out that in the Protiva Award11 the Tribunal had held that in evaluating whether particular rights were reserved by Iranian law to sole Iranian nationals, the controlling statute was Article 961 of the Iranian Civil Code. This Article provides that foreigners are entitled to the same civil rights in Iran as Iranians, except where the right is explicitly reserved by law to Iranian nationals or explicitly denied to foreign nationals.12 The Claimant concluded that as there was no explicit provision reserving to sole Iranian nationals the right to own real property in Iran, the Claimant's ownership was not illegal.
Edgar Protiva, et al. and The Government of the Islamic Republic of Iran, Award No. 566-316-2 (14 July 1995), reprinted in --- Iran-U.S.C.T.R
Article 961 of the Iranian Civil Code reads:
Foreign nationals are also entitled to the enjoyment of civil rights except in the following cases:
1) In respect of the rights which the law has expressly recognized for the Iranian nationals only, or has expressly denied... to foreign nationals.
2) In respect of the rights concerning personal status where these are not accepted by the law of the government of the foreign national.
3) In respect of the special rights that have been created solely from the point of view of the Iranian society (emphasis added).
An appropriate starting point for a discussion of the caveat in Case No. A18 is the Tribunal's decision in the Saghi case, which held that
[t]he caveat is evidently intended to apply to claims by dual nationals for benefits limited by relevant and applicable Iranian law to persons who were nationals solely of Iran. However,... the equitable principle expressed by this rule can, in principle, have a broader application. Even when a dual national's claim relates to benefits not limited by law to Iranian nationals, the Tribunal may still apply the caveat when the evidence compels the conclusion that the dual national has abused his dual nationality in such a way that he should not be allowed to recover on his claim.13
After having renounced his Iranian nationality at the age of 18, one of the claimants in that case re-applied for Iranian nationality solely in order to own shares that he believed could only be owned by Iranian nationals. Applying the caveat to the facts of that case, the Tribunal held that to permit him to recover for the expropriation of the shares by using his American nationality would be to permit an abuse of right.14 The Tribunal therefore dismissed those parts of his claim "where the equitable considerations giving rise to the application of the caveat are present."15
Of direct relevance in this regard is the Karubian Award,16 as the facts regarding the caveat in that case were substantially similar to those in the present Case. Karubian involved a dual Iran-United States national living in the United States who purchased property after he had acquired American nationality--that is, after he had become a dual national. Chamber Two of the Tribunal unanimously held that under Iranian law the right to purchase real estate, apart from certain limited exceptions, is a benefit reserved for sole Iranian nationals. It noted that the claimant had purchased all the properties at issue in his capacity as an Iranian national after acquiring United States nationality. The Tribunal therefore held that if it were to allow him to recover against the Respondent in those circumstances, it would be permitting an abuse of right. Consequently, it decided that the A18 caveat barred the claimant's recovery.
Article 988 of the Iranian Civil Code sets out the conditions under which Iranian nationals may renounce their nationality (in order, presumably, to acquire a new one). Most relevant for present purposes is subparagraph 3, which provides that a person seeking to renounce his or her Iranian nationality must undertake to transfer to Iranian nationals, by one means or another and within one year from the date of their renunciation of [Iranian] nationality, their rights to immovable properties in Iran which they possess or which they may acquire through inheritance, even if Iranian law permits foreign nationals to own them.17
English translations of Iranian legislation have been provided by the Tribunal's Language Services Division or the 1995 M.A.R. Taleghany translation of the Iranian Civil Code.
The earliest piece of legislation relied on by the Respondent is the "Law of Nationality of Iran," which appears to be a decree issued by Naseruddin Shah Qajar in approximately 1896 and published in a booklet of laws dealing with nationality and passports in approximately 1908 (the "pre-1929 Decree").18 In addition to setting out the criteria under which an Iranian national may acquire a foreign nationality, the Decree contains, inter alia, the following provisions:
Section Nine: Change of Iranian nationality, in spite of compliance with the stipulated requirements, is still subject to the permission and decision of the King. If an Iranian national living abroad acquires foreign nationality without obtaining such permission, he or she shall be barred entry into Iran. If he or she owns real estate or other property in Iran, he or she shall be forced to give up such property.
Section Twelve: Iranian women who lose their Iranian nationality on account of their marriage with foreign nationals shall, like other foreign nationals, be prohibited from owning villages and real estate in Iran, and shall be deprived of the privileges of Iranian nationality, except those privileges allowed under treaties.
Section Fourteen: Those who came to Iran from foreign countries and during their residence in Iran concealed their nationality and were treated in all matters as Iranian nationals, or purchased real estate in Iran, which privilege is exclusively available to nationals of Iran, shall be treated as nationals of the State of Iran, and their claim to foreign nationality will not be accepted (emphasis added).
The Respondent does not state clearly when this Decree was issued. Its date was erroneously said to be 1906 in Karubian, Award No. 569-419-2, at para. 157, reprinted in --- Iran-U.S.C.T.R. at ----. Dr. Mohammad Mossadegh, a former Iranian Prime Minister, in his article "Nationality in Iran" (published in 1926-27) puts 1896 (1313 Islamic lunar year) as the date of the Decree. Two other sources date the Decree from 1894. See A.H. Oakes and W. Maycock, eds., British and Foreign State Papers. 1893-1894 180-82 (1899); and R.W. Flournoy, Jr. and M.O. Hudson, eds. A Collection of Nationality Laws of Various Countries as Contained in Constitutions, Statutes and Treaties 473 (1929).
Any Iranian national who acquires foreign nationality without observing the legal requirements referred to above will have his foreign nationality considered null and void and will be regarded as an Iranian national. But at the same time, all his immovable properties will be sold under the supervision of the local public prosecutor and the proceeds will be paid to him after the deduction of the expenses of sale.
Significantly, the references in Section 12 of the pre-1929 Decree to foreign nationals being "prohibited from owning villages and real estate" and in Section 14 to the "privilege" of purchasing real estate being "exclusively available to nationals of Iran" do not appear in the 1929 Law on Nationality. Instead, the language and provisions of the 1929 Act are substantially similar to Articles 988 and 989 of the Iranian Civil Code. The 1929 Act appears, indeed, to have been a forerunner of those provisions of the Civil Code, which date from 1935 and remained in force beyond 1979.
In case any Iranian subject acquired foreign nationality after the solar year 1280 (1901-1902) without the observance of the provisions of law, his foreign nationality will be considered null and void and he will be regarded as an Iranian subject. Nevertheless, all his landed properties will be sold under the supervision of the local Public Prosecutor and the proceeds will be paid to him after the deduction of the expenses of the sale....
[t]he standard of evaluation of Claimant's property... was as follows: If a similar transaction had taken place precisely or approximately concurrent with the relevant date (the date on which expropriation of property has been alleged), that price has constituted the basis of evaluation. If not, the price of the last transaction made on the relevant date, taking into account the events of the revolution affecting the property price, constituted the basis of evaluation.
In this regard, the Tribunal notes that "the Respondent could have remedied any deficiencies in its valuation evidence without difficulty. Documents within the control and access of the Respondent--such as government statistics, tax records and registration records of sales of comparable properties in 1979-- would have been relatively easy for the Respondent to procure." Mohtadi, Award No. 573-271-3, para. 100, reprinted in --- Iran-U.S.C.T.R ----.
THE TRIBUNAL AWARDS AS FOLLOWS:
(a) The Respondent, the Islamic Republic of Iran, is obligated to pay the Claimant, Moussa Aryeh, the amount of Five Hundred Nineteen Thousand Five Hundred Seventy-One United States Dollars and No Cents U.S.$519,571.00 plus simple interest at the rate of 8.1% per annum (365-day basis), calculated from 14 May 1979 up to and including the day on which the Escrow Agent instructs the Depositary Bank to effect payment to the Claimant out of the Security Account;
(b) The Respondent is obligated to pay the Claimant costs of arbitration in the amount of Fifteen Thousand United States Dollars and No Cents (U.S. $15,000.00.);
(c) The above-stated obligations shall be satisfied by payment out of the Security Account established pursuant to Paragraph 7 of the Declaration of the Government of the Democratic and Popular Republic of Algeria of 19 January 1981.
(d) This Award is hereby submitted to the President of the Tribunal for notification to the Escrow Agent.