to terminate all legal proceedings in United States courts involving claims of United States persons and institutions against Iran and its state enterprises, to nullify all attachments and judgments obtained therein, to prohibit all further litigation based on such claims, and to bring about the termination of such claims through binding arbitration.2
Section 1. All claims which may be presented to the Iran-United States Claims Tribunal under the terms of Article II of [the Claims Settlement Declaration] and all claims for equitable or other judicial relief in connection with such claims, are hereby suspended, except as they may be presented to the Tribunal. During the period of this suspension, all such claims shall have no legal effect in any action now pending in any court of the United States, including the courts of any state or any locality thereof, the District of Columbia and Puerto Rico, or in any action commenced in any such court after the effective date of this Order. Nothing in this action precludes the commencement of an action after the effective date of this Order for the purpose of tolling the period of limitations for commencement of such action.
[...]
Section 3. Suspension under this Order of a claim or a portion thereof submitted to the Iran-United States Claims Tribunal for adjudication shall terminate upon a determination by the Tribunal that it does not have jurisdiction over such claim or such portion thereof.
Section 4. A determination by the Iran-United States Claims Tribunal on the merits that a claimant is not entitled to recover on a claim shall operate as a final resolution and discharge of the claim for all purposes. A determination by the Tribunal that a claimant shall have recovery on a claim in a specified amount shall operate as a final resolution and discharge of the claim for all purposes upon payment to the claimant of the full amount of the award, including any interest awarded by the Tribunal.
[...]
Section 6. Nothing in this Order shall prohibit the assertion of a counterclaim or set-off by a United States national in any judicial proceeding pending or hereafter commenced by the Government of Iran, any political subdivision of Iran, or any agency, instrumentality, or entity controlled by the Government of Iran or any political subdivision thereof.
It is the purpose of both parties, within the framework of and pursuant to the provisions of the two Declarations of the Government of the Democratic and Popular Republic of Algeria, to terminate all litigation as between the government of each party and the nationals of the other, and to bring about the settlement and termination of all such claims through binding arbitration. Through the procedures provided in the Declaration relating to the Claims Settlement Agreement, the United States agrees to terminate all legal proceedings in United States courts involving claims of United States persons and institutions against Iran and its state enterprises, to nullify all attachments and judgments obtained therein, to prohibit all further litigation based on such claims, and to bring about the termination of such claims through binding arbitration.14
a. On Claim A:
(1) General Principle B obliges the United States to terminate only claims by United States nationals against Iran in United States courts that fall within the Tribunal's jurisdiction. This termination obligation accrues once the Tribunal has decided a claim on the merits.
(2) The Algiers Declarations oblige the United States to terminate all legal proceedings initiated by United States nationals against Iran in United States courts involving claims that arguably fall within the Tribunal's jurisdiction. The United States obligation to terminate legal proceedings arose on 19 July 1981, six months after the signing of the Algiers Declarations; that obligation ceases with regard to legal proceedings involving claims that have been dismissed by the Tribunal for lack of jurisdiction. Claims that the Tribunal has decided are within its jurisdiction can never be revived in domestic courts.
(3) The suspension mechanism provided for in Executive Order 12294 satisfies the United States termination obligations under the Algiers Declarations only if, in effect, the mechanism resulted in a termination of litigation as required by those Declarations. The Tribunal will examine the facts bearing on this issue in the second phase of these proceedings. If, as a result of such examination, the Tribunal concludes that Iran was reasonably compelled in the prudent defense of its interests to make appearances or file documents in United States courts subsequent to 19 July 1981 in any litigation in respect of claims described in Article II, paragraph 1, of the Claims Settlement Declaration or in respect of claims filed with the Tribunal until such time as those claims are dismissed by the Tribunal for lack of jurisdiction, then the Tribunal will find that the United States has not complied with its obligations under General Principle B of the General Declaration and Article I and Article VII, paragraph 2, of the Claims Settlement Declaration. In that event, the United States will be required to compensate Iran for any expenses that Iran was caused to incur as a result of making appearances or filing documents in United States courts after 19 July 1981 in any litigation in respect of claims described hereabove.
(4) The Tribunal expects Iran to show in the second phase of these proceedings what expenses it incurred with respect to each specific case and what was the particular justification for the specific sums it spent. Iran will be expected to produce factual evidence of the losses it suffered as a result of its making appearances or filing documents in United States courts subsequent to 19 July 1981 in the prudent defense of its interests with respect to the claims described in subparagraph (3) hereabove. The Tribunal also expects Iran to produce factual evidence of the losses it suffered as a result of the monitoring of the suspended claims and invites both parties to address the question of whether Iran should be compensated for those losses.
(5) The Tribunal will not award any damages related to, or arising from, Iran's participation in United States court litigation during the six-month period following the signing of the Algiers Declarations. Nor will it award any damages related to, or arising from, Iran's participation in cases regarding the validity and constitutionality of the Algiers Declarations under United States law.
b. On Claim A:
(1) By allowing, in Section 6 of Executive Order 12294, the assertion of counterclaims and claims for set-off by United States nationals against Iran in United States court proceedings, even if those counterclaims and claims are included within the Tribunal's jurisdiction, the United States failed to comply with its obligations under General Principle B and Article I of the Claims Settlement Declaration.
(2) In the second phase of these proceedings, the Tribunal shall determine the nature and the amount of the damages incurred by Iran, if any, in defending against counterclaims and claims for setoff asserted in United States court proceedings in violation of the Algiers Declarations.16
Article VII, paragraph 2, by requiring that all filed claims be considered excluded from the jurisdiction of courts after they are referred to the Tribunal, implicitly recognizes that such claims may also be pending in other courts while it explicitly obligates the parties to deem them not subject to the jurisdiction of such other courts by ensuring that the claims not proceed unless and until the Tribunal determines that they are outside its jurisdiction. Consequently, until the Tribunal determines its jurisdiction with respect to a filed claim, Article VII, paragraph 2, of the Claims Settlement Declaration places on the United States an obligation to halt proceedings in its courts with respect to that claim.18
(1) By allowing, in Section 1 of Executive Order 12294, the filing of suits after the date of the Algiers Declarations, even for the limited purpose of tolling the applicable statutes of limitation, the United States did not act consistently with its obligations under General Principle B.
(2) The Tribunal shall determine in the second phase of these proceedings the nature and the extent of the damages, if any, incurred by Iran as a result of the United States authorizing the filing of tolling suits. Iran will be expected to produce factual evidence of the losses it suffered as a result of its making appearances or filing documents in United States courts subsequent to 19 January 1981 in the prudent defense of its interests with respect to tolling suits filed after 19 January 1981 asserting claims described in Article II, paragraph 1, of the Claims Settlement Declaration or asserting claims filed with the Tribunal until such time as those claims are dismissed by the Tribunal for lack of jurisdiction. The Tribunal also expects Iran to produce factual evidence of the losses it suffered as a result of monitoring the tolling suits and invites both parties to address the question of whether Iran should be compensated for those losses.19
(1) Iran's claim that the United States has failed to take a sufficiently active role in nullifying attachments obtained by United States nationals on Iranian assets in the United States after 14 November 1979 is dismissed.
(2) If any post-14 November 1979 attachments were still in effect and actually restrained Iranian assets in the United States after 19 July 1981, thereby limiting the free disposition of those assets by Iran, then this would constitute a violation of the United States obligation to nullify post-14 November 1979 attachments in a timely fashion. The Tribunal shall determine in the second phase of these proceedings whether any such attachments were still in effect at that date and, if so, the nature and the amount of damages, if any, Iran suffered as a result of those attachments.20
(1) The United States is obliged to nullify only those United States court judgments obtained by United States nationals against Iran that are based on claims that are within the Tribunal's jurisdiction. This obligation accrued on 19 July 1981.
(2) If Iran reasonably incurred legal expenses in relation to any such judgments that remained in existence after 19 July 1981, then the United States breached its obligations under the Algiers Declarations concerning nullification of judgments against Iran. The Tribunal shall determine in the second phase of these proceedings whether any such judgments were still in effect at that date and, if so, the nature and the amount of damages, if any, Iran suffered as a result of those judgments.21
(1) By not acting to have the Foremost/OPIC lawsuit in the District Court for the District of Columbia dismissed from the District Court's docket within a reasonable time after 11 April 1986, the date the Tribunal issued its award in Foremost, the United States violated its obligation under the Algiers Declarations to terminate litigation in United States courts related to claims resolved by the Tribunal on the merits.
(2) As a result of the United States omission, Iran is entitled to damages to the extent it was reasonably compelled in the prudent defense of its interests to make appearances or file documents with respect to the Foremost/OPIC lawsuit from 11 April 1986 until 1 April 1988, to the extent those expenses are not already sought by Iran in Case No. A15 (IV). The Tribunal shall determine in the second phase of these proceedings the nature and the amount of Iran's damages, if any.
(3) Iran's Claim in this Case, to the extent it relates to the Foremost/OPIC lawsuit as pursued from 1 April 1988 onward, is dismissed.23
Article VII, paragraph 2, by requiring that all filed claims be considered excluded from the jurisdiction of courts after they are referred to the Tribunal, implicitly recognizes that such claims may also be pending in other courts while it explicitly obligates the parties to deem them not subject to the jurisdiction of such other courts by ensuring that the claims not proceed unless and until the Tribunal determines that they are outside its jurisdiction. Consequently, until the Tribunal determines its jurisdiction with respect to a filed claim, Article VII, paragraph 2, of the Claims Settlement Declaration places on the United States an obligation to halt proceedings in its courts with respect to that claim.28
(a) the breakdown in diplomatic ties between Iran and the United States and the fact that relations between the two countries generally were strained;
(b) the presence of a degree of anti-Iranian and anti-American sentiment;
(c) the fact that Executive Order 12294, which implemented the suspension mechanism, departed from the language of the Algiers Declarations;
(d) the United States' choice of the suspension mechanism, which may not have been easily comprehensible or assessable with any certainty;
(e) Iran's lack of familiarity with United States constitutional and legal systems and litigation in United States courts;
(f) insufficiency of United States diplomatic communications that failed to provide Iran with positive assurances that it would not have to participate in United States court litigation to defend its interests;
(g) the fact that the United States Department of Justice at times relied on information provided by Iran's United States attorneys in order to identify lawsuits pending; and
(h) the fact that Executive Order 12294 permitted the filing of new suits.
(a) a settlement agreement of 15 May 1992 entered into by Mr. Thomas Shack and Shack & Kimball, on the one hand, and Iran, the Ministry of Economic Affairs and Finance of the Islamic Republic of Iran and the Organization for Investment and Economic and Technical Assistance of Iran (a branch of the aforementioned Ministry), on the other ("Settlement Agreement"), pertaining to litigation which Iran had instituted against Shack & Kimball "for breach of contract and fiduciary duties and an accounting and return of certain legal fees paid in connection with the conduct of certain litigations." It appears that owing to non-payment of fees, Mr. Shack had retained part of a damages award in litigation where Shack & Kimball was representing Iran, and litigation against Mr. Shack followed. An Annex to the Settlement Agreement, designated "Exhibit C," includes (i) a list of "fees and expenses that were due from [Iran] for legal services provided [by Shack & Kimball and Mr. Shack] to the Government and its agencies during the period from June 1982 to March 1983" and that were withheld from the amount recovered in the above-mentioned litigation, and (ii) individual statements that Shack & Kimball and Mr. Shack agreed to provide pursuant to Section 3 of the Settlement Agreement;
(b) a letter from Mr. Shack of 18 August 2000 listing Shack & Kimball billings from July 1981 to May 1982, accompanied by a statement that these amounts (which total U.S.$1,039,945.43) had been paid in full;
(c) a letter from Mr. Shack of 20 February 2001, stating that, "of the total amount of $1,039,945.40, 70%, i.e. $727,961.80, was related to matters involved in the 'suspended litigation'";
(d) a letter from Mr. Shack of 10 December 2003 listing Shack & Kimball billings from July 1981 to May 1982 and asserted receipts of the amounts billed in the amount of U.S.$1,039,945.43; and
(e) an affidavit of 2 April 2004 ("2004 Shack Affidavit"), wherein Mr. Shack states, inter alia
It is my opinion that Iran's total charges for the period of July 1981 to May 1982 and as reduced by 30% would continue as a valid estimate at $727,962 for the cases subject to claims A, D, G, and H. In this calculation I have excluded the legal fees and costs relating to cases subject of the claims dismissed by the Tribunal in Partial Award or settled by the parties.
(collectively, "Shack & Kimball Evidence").
(a) it is unsupported by primary documentation such as billing invoices or accounting records.155 The 2004 Shack affidavit indicates that he has relied upon "accounting records" but he has not produced these documents. Contemporaneous court dockets provided by Iran are no replacement for contemporaneous billing documents; and
(b) Mr. Shack's credibility is in question because of the dispute and litigation between Iran and Mr. Shack which preceded the Settlement Agreement.156
The Tribunal has no jurisdiction to determine the enforceability of forum selection clauses; that question is for national courts, not the Tribunal, to decide. Consequently the Tribunal is unable to hold that the failure of the United States to terminate litigation with respect to claims that the Tribunal dismissed because of the forum clause exclusion contained in Article II, paragraph 1, of the Claims Settlement Declaration violated any obligation imposed on the United States by the Algiers Declarations.162
Thus, the Tribunal's holding in Claim B made clear that the Algiers Declarations did not preclude a United States court from determining the enforceability of an Iranian forum selection clause once the Tribunal had dismissed the related claim due to the forum clause exclusion contained in Article II, paragraph 1.163
1. In full and final settlement of all disputes, differences, claims, counterclaims and matters directly or indirectly raised by or capable of arising out of, or related to... Case A/15 (IV:C)....
[...]
4. Upon the Tribunal's issuance of an Award on Agreed Terms, Iran shall not, directly or indirectly, at any time thereafter, take or pursue any legal action or initiate or pursue arbitral or court proceedings or otherwise make any claim or counterclaim whatsoever against the United States and its affiliates, subsidiaries, agents, agencies, instrumentalities, predecessors, successors and assigns, the Federal Reserve Bank of New York, the Governor and Company of the Bank of England, Banque Central[e] d'Alg[é]rie, the released banks or the released account parties with respect to, arising out of, in connection with or relating to the Tribunal Cases [including Claim C in Case No. A15 (IV)], Dollar Account No. 2, and the Technical Arrangement.
5. Upon the Tribunal's issuance of an Award on Agreed Terms, Iran and the United States shall waive any and all claims for costs, including attorneys' fees, arising out of or related in any way to the arbitration, prosecution or defense of any claim or counterclaim before any forum, including the Tribunal, with respect to, arising out of, in connection with or relating to the Tribunal Cases [including Claim C in Case No. A15 (IV)], Dollar Account No. 2, and the Technical Arrangement.177
any pending or future claim of the United States or a United States national arising out of events occurring before the date of this Declaration related to (A) the seizure of the 52 United States nationals on November 4, 1979, (B) their subsequent detention, (C) injury to the United States property or property of the United States nationals within the United States Embassy compound in Tehran after November 3, 1979, and (D) injury to the United States nationals or their property as a result of popular movements in the course of the Islamic Revolution in Iran which were not an act of the Government of Iran.182
(a) invoices and other documents issued by the United States law firms that Iran retained to represent it in the relevant United States court cases;
(b) documents evidencing payment, such as checks, letters transmitting checks, communications acknowledging receipt of payment, payment instructions to banks, and bank statements;
(c) individual statements prepared by Iran for the purposes of the present arbitration in relation to each of the specific United States court cases at issue (Case IDs);193
(d) portions of the 1992 settlement agreement between Iran and Shack & Kimball194 to prove litigation expenses in the amount of U.S.$128,071 for services allegedly provided by the law firm of Shack & Kimball in seven specific United States court cases between June 1982 and March 1983.
a. copies of the invoices issued by the United States law firms representing Iran;
b. evidence of payment of invoices, including copies of checks, bank documents, correspondence between Iran and its United States attorneys, Iranian internal communications, and payment receipts;
c. copies of docket sheets for the relevant United States court cases; United States court decisions; filings and correspondence with United States courts; correspondence with and between attorneys; and
d. copies of United States Government statements of interest filed with United States courts.
Review of Judgment No. 158 of the United Nations Administrative Tribunal :
[The statement of reasons] must indicate in a general way the reasoning upon which the judgment is based; but it need not enter meticulously into every claim and contention on either side. While a judicial organ is obliged to pass upon all the formal submissions made by a party, it is not obliged, in framing its judgment, to develop its reasoning in the form of a detailed examination of each of the various heads of claim submitted. Nor are there any obligatory forms or techniques for drawing up judgments: a tribunal may employ direct or indirect reasoning, and state specific or merely implied conclusions, provided that the reasons on which the judgment is based are apparent.264
once the[] conditions [in the agreements between Marriott and the Foundation] have been complied with by the beneficiary (Marriott), the latter then became fully entitled to delivery of the property deposited for its benefit.... in fact, title to the escrow funds passed to Marriott when the entire sum became payable. Although the money was in an escrow account..., title to the money was in Marriott subject to the above conditions which Marriott complied with.286
derive a rate of interest based approximately on the amount that the successful claimant would have been in a position to have earned if it had been paid in time and thus had the funds available to invest in a form of commercial investment in common use in its own country. Six-month certificates of deposit in the United States are such a form of investment for which average interest rates are available from an authoritative official source.312
Accordingly, in Sylvania, Chamber One went on to award the claimant the average rate of interest paid on six-month certificates of deposit in the United States from the time the debt arose to the time of payment of the Award ("Average Six-Month CD Rate").313
Discontinuance of CD rates (secondary market)
As of the release on December 16, 2013, the H.15 will cease publication of the 1-month, 3-month, and 6-month CD rates. Recent attrition has reduced both the number and types of institutions that provide quotes creating a challenge to construct statistically robust estimates of CD rates, and it is not feasible to resume publication. The historical rates will remain available through the Federal Reserve Board's Data Download Program (DDP).316
The Tribunal therefore would not be in a position to use the Average Six-Month CD Rate for all of the relevant period even if it accepted that it would be reasonable to apply it in these Cases.
The rate of interest shall be the average bank short-term lending rate to prime borrowers prevailing for the currency of payment at the place for payment, or where no such rate exists at that place, then the same rate in the State of the currency of payment. in the absence of such a rate at either place the rate of interest shall be the appropriate rate fixed by the law of the State of the currency of payment.317
Year of payment | Amount paid $ | Date of payment | Pre-judgm. Interest $ |
1981 | 2,167.01 | 11 October 1981 | 5,259.73 |
1982 | 1,254.69 | 1 July 1982 | 2,899.66 |
1983 | 28,659.16 | 1 July 1983 | 62,558.80 |
1984 | 55,858.32 | 1 July 1984 | 115,554.41 |
1985 | 5,527.37 | 1 July 1985 | 10,827.32 |
1986 | 7,579.85 | 1 July 1986 | 14,155.79 |
1987 | 620.13 | 1 July 1987 | 1,106.84 |
1988 | 804.20 | 1 July 1988 | 1,364.89 |
1989 | 1,714.56 | 1 July 1989 | 2,736.88 |
1991 | 22,377.37 | 1 July 1991 | 31,317.25 |
1992 | 5,228.04 | 1 July 1992 | 6,932.15 |
1993 | 1,576.35 | 1 July 1993 | 1,993.62 |
Total | 133,367.05 | 256,707.34 |
Amount paid $ | Date of payment | Prejudgment interest $ |
70,000 | 1 July 1982 | 161,773.88 |
7,338.12 | 1 July 1983 | 16,018.06 |
7,456.60 | 1 July 1983 | 16,276.68 |
Total 84,794.72 | 194,068.62 |
THE TRIBUNAL DETERMINES AS FOLLOWS:
(a) On Claim A, the Tribunal holds that Iran was reasonably compelled in the prudent defense of its interests to make appearances or file documents in United States courts subsequent to 19 July 1981 in respect of 84 cases involving claims arguably falling within the Tribunal's jurisdiction or involving claims that had been filed with the Tribunal. To that extent, the United States has not complied with its obligations under General Principle B of the General Declaration or Article VII, paragraph 2, of the Claims Settlement Declaration, as the case may be. The Tribunal further holds that, with respect to 44 of those cases, Iran has proven that it has incurred specific litigation expenses totaling U.S.$70,144.39. Consequently, the Tribunal awards this amount to Iran.
(b) On Claim D, the Tribunal holds that Iran has proven that it has incurred specific litigation expenses totaling U.S.$56,070.32 as a result of making appearances or filing documents in United States courts subsequent to 19 January 1981 in the prudent defense of its interests in nine lawsuits filed after 19 January 1981 involving claims arguably falling within the Tribunal's jurisdiction or involving claims that had been filed with the Tribunal. Consequently, the Tribunal awards U.S.$56,070.32 to Iran.
(c) On Claim G, the Tribunal holds that six post-14 November 1979 attachments remained in effect and actually restrained Iranian assets in the United States after 19 July 1981. By failing to nullify those attachments, the United States has not complied with its obligation under General Principle B of the General Declaration to nullify post-14 November 1979 attachments in a timely fashion. The expenses that Iran has incurred in litigation to lift those attachments are included in the specific litigation expenses that the Tribunal has awarded Iran on Claim A.
(d) On Claim H, the Tribunal holds that two United States court judgments against Iran that remained in existence after 19 July 1981 were subject to the United States' obligations under the Algiers Declarations concerning nullification of judgments against Iran and that Iran reasonably incurred legal expenses in relation thereto totaling U.S.$7,152.34. To that extent, the United States has not complied with its obligations under the Algiers Declarations. Consequently, the Tribunal awards U.S.$7,152.34 to Iran.
(e) The Tribunal holds that expenses that Iran has reasonably incurred in monitoring the suspended litigation against it in the United States are in principle compensable. The Tribunal therefore awards Iran (i) U.S.$70,000 for monitoring services performed by Shack & Kimball; (ii) U.S.$7,338.12 for monitoring services performed by seven other law firms; and (iii) U.S.$7,456.60 in further monitoring expenses.
(f) Finally, the Tribunal awards Iran U.S.$50,000 as "other losses" related to the Marriott lawsuit.
(g) The remaining claims by Iran are dismissed.
(h) The Tribunal further awards Iran pre-judgment interest in the aggregate amount of U.S.$574,306.37.
(i) Accordingly, under the present Award, the Respondent, the United States of America, is obligated to pay the Claimant, the Islamic Republic of Iran, the total sum of Eight Hundred Forty Two Thousand Four Hundred Sixty-Eight United States Dollars and Fourteen Cents (U.S.$842,468.14), plus simple interest at the successive prevailing prime bank lending rates in the United States for the period of non-payment of this Award.
(j) Each Party shall bear its own costs of the arbitration.
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