ICJ and the Alleged Violations of Treaty of Amity: Anything Unexpected in the Judgement on Jurisdiction?

[Katayoun Hosseinnejad is a visiting lecturer of international law at Allameh Tabataba’i University and senior researcher at Bulan Institute for Peace Innovations (@katayoonhnejad).]

[Pouria Askary is an associate professor of international law at Allameh Tabataba’i University (@askarypouria).]

On 3 February 2021, the ICJ for the third and the last time reviewed the 1955 Treaty of Amity, Economic Relations and Consular Rights between Iran and the US (the “Treaty of Amity”) to find its jurisdiction  in the case concerning the Alleged Violations of the 1955 Treaty of Amity. The US withdrew from the Treaty of Amity on 3 October 2018 following the Court Order on the provisional measures in this case. Interestingly, a treaty which was adopted to regulate the economic and consular affairs between the two countries, had enriched other fields of international law: use of force, immunity of state’s companies, and now unilateral sanctions.  

The case concerning Alleged Violations of the Treaty of Amity initiated by Iran after the US withdrawal from the Joint Comprehensive Plan of Action (JCPOA) and its subsequent reimposition of a comprehensive set of the so-called “sanctions” and restrictive measures targeting, directly or indirectly, Iran (and Iranian companies/nationals). The JCPOA was concluded on 14 July 2015 by China, France, Germany, the Russian Federation, the United Kingdom, the US, the High Representative of the European Union (the E3/EU+3) and Iran with two purposes: to ensure the exclusively peaceful nature of Iran’s nuclear program, on the one hand, and to produce “the comprehensive lifting of all UN Security Council sanctions as well as multilateral and national sanctions related to Iran’s nuclear program”, on the other hand. On 20 July 2015, the Security Council adopted resolution 2231 (2015), whereby it endorsed the JCPOA and urged its “full implementation on the timetable established [therein]” (for further discussion on the US withdrawal from this instrument, see here).  

In Iran’s view, the US withdrawal from the JCPOA and the reimposition of the sanctions against Iran violate the deal, the Security Council Resolution 2231, the UN Charter and other international norms and treaties including the 1955 Treaty of Amity (see here). It is in regard to the violation of the latter that Iran, like the previous cases between the two states, invoked the compromissory clause of the Treaty (Article XXI, paragraph 2) 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.”

In response to Iran’s referral to the Treaty of Amity in this case, the US raised preliminary objections to the jurisdiction of the Court, the admissibility of the case, as well as, a third category of what the US considered as objections having exclusively preliminary character.

The US first objection to the jurisdiction referred to the language and scope of Article XXI (2) of the Treaty of Amity, and that the true subject matter of this case is a dispute as to the application of the JCPOA. The Court, unanimously, rejected this objection by, inter alia, using the same wordings as its Order on provisional measures dealing with prima facia jurisdiction, stating that “certain acts may fall within the ambit of more than one instrument and a dispute relating to those acts may relate to the “interpretation or application” of more than one treaty or other instrument”. (see para. 38 of the Order and para. 56 of the Judgment) (for a review of the Order of the Court in this case, see here, here and here)

In objecting to the admissibility of the case, the US alleged that “Iran’s endeavor to bring to the Court this JCPOA dispute under the compromissory clause of the Treaty also amounts to an abuse of process in this case.” As was expected, in line with its jurisprudence, the Court stated that in the case of the existence of a valid title of jurisdiction only exceptional circumstances may justify the rejection of claim on the basis of abuse of process. Hence, the Court rejected this objection as well. (see paras. 93-94 of the Judgment) 

Two other objections of the US related to Article XX (1) of the Treaty of Amity. In the US view, the “two separate exceptions in that article stand as a complete bar to the relief that Iran seeks and that these objections possess an ‘exclusively preliminary’ character in the circumstances of this case.” These exceptions, according to the US, are “measures … relating to fissionable materials” (Article XX(1)(b)), and “measures … necessary to protect [U.S.] essential security interests” (Article XX(1)(d)). The Court, in both the Oil Platforms and Certain Iranian Assets judgments on the jurisdiction, interpreting the same treaty, has already held that such an exception does not go to the Court’s jurisdiction, rather provides a substantive defense on the merits. (for comments on the Court’s decision on the latter case, see here). The US, nevertheless, decided to raise the same objection again but this time with a change in the classification of these objections as something not falling neither under jurisdiction nor admissibility but directly derived from Article 79 bis of the Rules of the Court. (US memorial 4.17) It contended that contrary to other cases, these exceptions now possess exclusively preliminary character because the “Court would have no need to construe the provisions of the Treaty invoked by Iran as the basis for the alleged breach, because the claims would be defeated without resolving those interpretive questions.” (US memorial 6.10) The Court’s reasoning in rejecting this objection is relatively brief. The Court did not comment on whether a third category of preliminary objections can be said to exist based on Article 79 bis of the Rules of the Court (for discussion on the implication of Article 79 after the new amendment see here). Rather, the Judgment reiterated the Court’s finding in the previous two cases adding that their implications do not have a preliminary character and thus has to be examined as part of the merits.

The preliminary objection concerning the so-called “third country measures” was the most complicated part of the US objection to the jurisdiction ratione materiae. Although the Court was unanimous in rejecting this objection, Judge Tomka, in his declaration, questioned the approach of the Court for being inconsistent with its previous rulings between the same parties concerning the same treaty. (see para. 13 of Judge Tomka’s Declaration). In his view, the Court should have determined whether the Treaty of Amity provides Iran (and its nationals or companies) with a right not to have its trade, commercial or financial relations with third States (and their nationals or companies) interfered with by the United States’ measures (see para. 10 of Judge Tomka’s Declaration).

The US has divided its measures against Iran into four categories:

“(i) the reimposition of certain sanctions provisions under United States  statutes  that  had  been  waived  pursuant  to  the  JCPOA;  (ii) the  reinstatement,  through  issuance  of  Executive  Order 13846,  of  certain  sanctions  authorities  that  were  previously  terminated;  (iii) the  relisting  of  certain  persons  on  the  Department  of  the  Treasury’s  Specially Designated Nationals  and  Blocked  Persons  List  or  SDN  List  (which  identifies  natural  or  legal  persons from specially designated countries or subject to a block on assets); and (iv) the revocation of certain licensing actions related to carpets, foodstuffs, commercial passenger aircraft  and  parts,  and activities of foreign entities owned or controlled by United States natural or legal persons.” (see para. 63 of the Judgment)

The “third country measures” refer to categories i to iii above, i.e., those measures which principally target trade or transactions between Iran and other countries except the US (or between their nationals and companies).  The US maintained that these types of measures or the so-called secondary sanctions

“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”. (para. 67)

In contrast, Iran declared that any action taken by the US that, infringes the rights of Iran and Iranian nationals and companies under the Treaty, is a violation of the Treaty, no matter where that action or elements of a linked series of actions might occur (see Iran observations and submissions, pp. 17-61).

The US did not include category iv in this list and therefore the Court’s finding on this objection started by a logical deduction: since this objection does not concern all of Iran’s claim, even if it is upheld by the Court, the proceedings would not be terminated (see para. 77 of the Judgment). Yet, the judgment does not stop here. The Court commented on this objection in general terms by stating that

“the fact that some of the measures challenged — whether or not they are ‘the vast majority’, as the United States maintains — directly target third States or the nationals or companies of third States does not suffice for them to be automatically excluded from the ambit of the Treaty of Amity [emphasis added].” (see para. 81 of the Judgment) The Court refrained from providing any further analysis of this argument and in para. 82 of the Judgment announced that: “if the case were to proceed to the merits, such matters would be decided by the Court at that stage, on the basis of the arguments advanced by the Parties”.

It seems that two considerations made the Court to take this approach in this case. First, determining the reverberating and actual effects of the secondary sanctions in categories i to iii on the rights invoked by Iran necessarily requires a complex analysis of factual issues which goes beyond legal matters. Second, and more importantly, there was no doubt for the Court (see para. 80 of the Judgment) that the objective of the sanctions imposed on third parties is to ultimately harm Iran’s economy. It was in light of these considerations that the Court held that it is a question of merits to determine whether the provisions of the Treaty of Amity also provide a safeguard against the overall effects of the sanctions.

The provisions invoked by Iran under the Treaty of Amity, inter alia, contain different standards of treatment. In light of this, apart from the unclear situation surrounding the revival of the JCPOA by President Biden, the Court, by rejecting the US objections, will have a great opportunity to examine the legality of the unilateral coercive measures on the basis of the minimum standards of treatment with aliens and other norms of protection as enshrined in the customary international law.