Iran v USA at the ICJ – A Closer Look at International Law

Spearhead Analysis – 27.08.2018

By Fatima Ayub
Research Analyst, Spearhead Research

International LawIran has sued the United States at the International Court of Justice in a surprising counter to nullify the latter’s nuclear sanctions reimposed by President Trump’s regime.  Invoking a half-century old treaty signed by Iran and the United States, this nearly-forgotten contractual document known as the 1955 Treaty of Amity and Economic Relations now stands to challenge the ‘irreparable prejudice’ suffered by Tehran, as a wave of tough unilateral sanctions have been brought into effect in August, bringing back into effect harsh penalties that had been lifted under a landmark 2015 agreement between two estranged states.

The International Court of Justice, the principal judicial organ of the United Nations  is based in The Hague and is also known as the World Court, is the United Nations tribunal for resolving international disputes. Iran’s filing asks the ICJ to order the United States to provisionally lift its sanctions put in place on May 8th, ahead of more detailed arguments.

Iran initiated legal proceedings against the United States before the ICJ on July 16 over the expected reinstatement and escalation of nuclear sanctions.

Tehran says the action violates international obligations, including the 1955 US-Iran Treaty of Amity — an agreement signed well before Iran’s 1979 revolution, but which is still invoked in ongoing legal battles.

Iran and the US have not had diplomatic relations since 1980, when American embassy officials were held hostage in Tehran.

The case at the International Court of Justice then prompts an interesting question: whether, under international law, a treaty can be abrogated because too much has changed in the relationship between the parties. In other words, can a treaty become inapplicable because it is simply irrelevant?

It is imperative to point out at the outset that the United States, no longer bound to the rulings of the ICJ, withdrew itself from compulsory International Court of Justice jurisdiction in 1986.

However, Iran has been able to successfully cite the 1955 bilateral Treaty of Amity between itself and the United States as the basis for establishing the court’s jurisdiction in the dispute. 

Further, Iran claims that the mere announcement that sanctions will be reimposed has created uncertainty and chilled or derailed economic cooperation, costing Iran billions in contracts and investments.

Mr. Trump, a staunch, vocal opponent to the Iran nuclear deal (formally the Joint Comprehensive Plan of Action, or JCPOA) has been a powerful critic of both his predecessor Obama and Bush administrations for allowing the agreement to be put in place and more vehemently, of the leniency extended towards Iran, famously declaring the agreement “the worst deal” in allowing Iran to develop and use its nuclear power under strictly monitored control.

The other parties to the JCPOA—Germany, the United Kingdom, France, Russia, China and the EU—have made clear that they remain committed to the agreement despite the U.S. withdrawal. It is important to note that Iran has not been quite as explicit about its commitment to JCPOA after US withdrawal but notably has demanded compensation from the other parties for the losses it expects to incur due to the U.S. withdrawal and reimposed sanctions.

This fresh round of trade and economic sanctions against Iran consist of statutory sanctions and sanctions imposed pursuant to executive orders under the International Emergency Economic Powers Act, as well as individual designations of natural and legal persons. Doing business with designated individuals can then trigger secondary sanctions, which effectively cut off the access of third parties or state that do business with designated persons and entities to the U.S. market.

Even in May, President Trump had stated in his executive order that the sanctions would turn up the financial pressure on Tehran to come to a “comprehensive and lasting solution” regarding activities that the international community regarded as “malign” such as Iran’s “ballistic missile programme and its support for “terrorism.” The new US sanctions are specifically aimed at Iran’s booming oil export industry, which is also the bulk and lifeline of Iran’s economy. Immediate results have seen a rapid fall in Iranian currency and a building up of palpable tension and pressure domestically that economic hardships for the state are soon to worsen in coming months.

True to his word, the strain on Iran’s financial and trading sector has started to glaringly show. International multinationals, including France’s Total, Peugeot and Renault, and Germany’s Siemens and Daimler — have suspended operations in Iran in the wake of the May 8 announcements.

In August, both Air France and British Airways announced that they were going to halt flights to Tehran later this year, claiming that while their decision was unrelated to the sanctions, they found that their operations with Iran were no longer commercially viable.

Despite this, Iran’s recourse to public international law has been hailed by political analysts as a move that has rightly caught the United States and its present regime by surprise. While Iran first filed the lawsuit filed in 2016 based on the same 1955 treaty, there was little hope then that it would be able to establish the ICJ’s jurisdiction in the dispute, given that Washington quickly disregarded Iran’s application to the UN body as “baseless.” Iran was not only successfully able to argue its case for the ICJ to preside over the dispute, but has also since then, then requested a provisional ruling to be given urgently by the ICJ in the span of the month, given that Iran’s national currency, the rial has already lost around half its value since the announcement of the sanctions in April 2018. A second round of measures is to come into effect in early November, targeting Iran’s valuable oil and energy sector.

In a footnote of its written submission to the ICJ, Iran has stated that while it believes all unilateral economic sanctions to be illegal under international law, Iran is not asking the court to declare that unilateral U.S. sanctions against it are unlawful in principle.

Instead, Iran argues only that the reintroduction of sanctions lifted in the framework of the JCPOA and additional sanctions the administration vowed to impose in the future violate the 1955 treaty. 

Analysts appear divided over the merits of the recourse to the notoriously slow and often historically impartial Court of Justice.

Critics of the May 8 sanctions say that the very fact that the US will appear at the ICJ, under the Trump administration, to contest a case brought by Iran says volumes about the continued influence of international law.

However, experts who specialize in treaty and sanction laws find that the legal merits of the Iranian lawsuit might fall weak in court, partly because of what they perceive to be Iran’s own transgressions of the 1955 treaty.

Farhad R. Alavi, a Washington-based legal analyst said that, “the move appears largely symbolic and for largely domestic consumption,”

 A ruling or declaration, even if made in favor of Iran is not only unlikely, but is also foreseen to have limited impact on the ground realities of the situation.

This is because one of the most significant caveats to the United Nations’ judicial body remains its ability to expound legally binding judgments, however lacking the power to enforce them, so that historically, countries – including the United States – have occasionally ignored them.

Following from this thread, the influence harbored by the United States to date at a global level cannot be underestimated. In reimposing the sanctions, the Trump administration has warned other countries with continuing economic relations with Iran, going forward to the extent of rejecting pleas for exceptions from the reimposed sanctions sought by major international companies. According to a recent New York Times investigative report, ‘multi billion-dollar deals’ envisioned with Western firms have been abandoned or delayed in light of US threats.

To even the most casual observer, the U.S.-Iran relationship is a far cry from what it was when the Treaty of Amity was signed in 1955. The recent exchange of threats between President Trump and Iran’s President, Hassan Rouhani, are a bleak reminder of the current state of the U.S.-Iran relationship. 

Earlier this month, Iran’s supreme leader Ayatollah Ali Khamenei appeared to rule out any immediate prospect of talks with the United States, saying “there will be neither war, nor negotiations,” with the US.

The ICJ is now expected to take a couple of months to decide whether to grant Tehran’s request for a provisional ruling, while a final decision in the case may actually still take years.

U.S. lawyers are expected to argue that the United Nations court should not have jurisdiction in the dispute, that the friendship treaty is no longer valid and that the sanctions Washington has levied against Tehran do not violate it anyway.

The oral hearings, essentially a request by Iran for a provisional ruling, will last for four days, with a decision to follow within a month.

To date, the ICJ has so far ruled that the 1955 treaty is still valid, even though it was signed long before the 1979 Islamic Revolution that triggered decades of hostile relations with Washington. The case itself has been hallowed out in international legal circles as a stark example of what might be called a case of treaty irrelevance. It would be unwise not to foresee that the US will not comply with any judgment in favor of Iran, whether provisional or future. It remains to be seen now whether the case will go down in history as an exception to the rule of might or it will expose yet another caveat in the crumbling façade of international law as the savior of the post-World War contemporary world order.