Public sitting held on Monday 17 September 1996, at 9.30 a.m., at the Peace Palace, President Bedjaoui presiding

Document Number
090-19960917-ORA-01-00-BI
Document Type
Incidental Proceedings
Number (Press Release, Order, etc)
1996/13
Date of the Document
Bilingual Document File
Bilingual Content

Non- Corrigé

Uncorrected

CR 96/13

International Court Cour internationale
of Justice de Justice

THE HAGUE LA BAYE

YEAR 1996

Public sitting

beld on Tuesday 17 September 1996, at 9.30 a.m., at tbe Peace Palace,

President Bedjaoui presiding

in tbe case concer.ning Oil Platfor.ms

(Islamic Republic of Iran v. United States of America)

Preliminary Objection

VERBATJ:M RECORD

ANNEE 1996

Audience publique

tenue le mardi 17 septembre 1996, à 9 b 30, au Palais de la Paix,

sous la présidence de M. Bedjaoui, Président

en l'affaire des Plates-formes pétrolières

(République islamique d'Iran c. Etats-Unis d'Amérique)

Exception préliminaire

COMPTE RENDU - 2

Present: President Bedjaoui
Vice-President Schwebel
Judges Oda
Guillaume
Shahabuddeen

Weeramantry
Ranjeva
Herczegh
Shi

Fleischhauer
Karoma
Vereshchetin
Ferrari Bravo
Higgins

Parra-Aranguren
Judge ad hoc Rigaux

Registrar Valencia-Ospina - 3 -

Présents M. Bedjaouil Président
M. Schwebel 1 Vice-Président

MM. Oda
Guillaume
Shahabuddeen

Weeramantry
Ranjeva
Herczegh

Shi
Fleischhauer
Karoma

Vereshchetin
Ferrari Bravo
Mme Higgins 1

M. Parra-Arangurenl juges
M. Rigaux 1 juge ad hoc

M. Valencia-Ospina 1 Greffier - 4 -

T.he Government of the Islamic Republic of Iran is represented by:

Mr. M. H. Zahedin-Labbaf, Agent of the Islamic Republic of Iran to the
Iran-U.S. Claims Tribunal,

as Agent;

Mr. s. M. Zeinoddin, Head of Legal Affairs, National Iranian Oil Company,

Mr. James R. Crawford, Whewell Professer of International Law, University of
Cambridge, Member of the International Law Commission,

Mr. Luigi Condorelli, Professer of International Law, University of Geneva,

Mr. Rodman R. Bundy, Avocat à la Cour de Paris, Member of the New York Bar,
Frere Cholmeley, Paris,

as Counsel and Advocates;

Mr. Derek W. Bowett, C.B.E., Q.C., F.B.A., Whewell Professer of

International Law, Emeritus, University of Cambridge,

Dr. N. Mansourian, Legal Advisor, Bureau of International Legal Services of
the Islamic Republic of Iran,

Dr. M. A. Movahed, Senior Legal Advisor, National Iranian Oil Company,

Dr. H. Omid, Legal Advisor, National Iranian Oil Company,

Dr. A. A. Mahrokhzad, Legal Advisor, National Iranian Oil Company,

Mr. David S. Sellers, Solicitor, Frere Cholmeley, Paris,

Ms Loretta Malintoppi, Avocat à la Cour, Frere Cholmeley, Paris

as Counsel.

The Government of the United States of America is represented by:

Mr. Michael J. Matheson, Acting Legal Adviser, u.s. Department of State,

as Agent;

Dr. John H. McNeill, Senior Deputy General Counsel, U.S. Department of

Defense,

Professer Andreas F. Lowenfeld, Rubin Professer of International Law, New

York University School of Law, - 5 -

Le Gouvernement de la République islamique d'Iran est représenté par :

M. M. H. Zahedin-Labbaf, agent de la République islamique d'Iran auprès du

Tribunal des réclamations Etats-Unis/Iran,

comme agent;

M. S. M. Zeinoddin, chef du service juridique, National Iranian Oil Company,

M. James R. Crawford, professeur de droit international, titulaire de la
chaire Whewell à l'Université de Cambridge,

M. Luigi Condorelli, professeur de droit international à l'Université de
Genève,

M. Rodman R. Bundy, avocat à la Cour, Paris, membre du barreau de New York,
cabinet Frere Cholmeley, Paris,

comme conseils et avocats;

M. Derek W. Bowett, C.E.E., Q.C., F.B.A., professeur émérite de droit

international, ancien titulaire de la chaire Whewell à l'Université de
Cambridge,

M. N. Mansourian, conseiller juridique, bureau du service juridique
international de la République islamique d'Iran,

M. M. A. Movahed, conseiller juridique principal, National Iranian Oil
Company,

M. H. Omid, conseiller juridique, National Iranian Oil Company,

M. A. A. Mahrokhzad, conseiller juridique, National Iranian Oil Company,

M. David S. Sellers, solicitor, cabinet Frere Cholmeley, Paris,

Mme Loretta Malintoppi, avocat à la Cour, cabinet Frere Cholmeley, Paris,

comme conseils.

Le Gouvernement des Etats-Unis d'Amérique est représenté par :

M. Michael J. Matheson, conseiller juridique en exercice du département

d'Etat des Etats-Unis,

comme agent;

M. John H. McNeill, conseiller juridique principal adjoint du département de
la défense des Etats-Unis,

M. Andreas F. Lowenfeld, professeur de droit international, titulaire de la
chaire Rubin à la faculté de droit de l'Université de New York, - 6 -

Mr. John R. Crook, Assistant Legal Adviser for United Nations Affairs,
U.S. Department of State,

Dr. Sean Murphy, Counselor for Legal Affairs, United States Embassy, The
Hague,

Mr. Jack Chorowsky, Special Assistant to the Legal Adviser, United States

Department of State

Commander Ronald D. Neubauer, JAGC, United States Navy,

as Counsel and Advocates;

Mr. Allen Weiner, Attache (Office of the Legal Counselor), United States
Embassy, The Hague

as Counsel. - 7 -

M. John R. Crook, conseiller juridique adjoint pour les questions concernant
l'Organisation des Nations Unies au département d'Etat des Etats-Unis,

M. Sean Murphy, conseiller pour les affaires juridiques à l'ambassade des
Etats-Unis aux Pays-Bas,

M. Jack Chorowsky, assistant spécial du conseiller juridique du département
d'Etat des Etats-Unis,

Le capitaine de frégate Ronald D. Neubauer, Judge Advocate General's Corps,
de la Marine des Etats-Unis,

comme conseils et avocats;

M. Allen Weiner, bureau du conseiller juridique, attaché à l'ambassade des
Etats-Unis aux Pays-Bas,

comme conseils. - 8 -

The PRESIDENT: Today the Court will resume its public hearings on

the preliminary objection of the United States of America in the case

concerning Oil Platfor.ms (Islamic Republic of Iran v. United States of

America). I now give the floor to Mr. John Crook to continue the

pleadings for the United States of America.

Mr. CROOK: Thank you, Mr. President. Mr. President, Members of the

Court, it is a great honour for me to appear before you today on behalf

of the United States.

Professer Lowenfeld yesterday showed how the 1955 Treaty simply does

not regulate the events that the Islamic Republic of Iran has placed at

issue here. This morning, I shall supplement Professer Lowenfeld's

presentation by examining sorne of the history of the treaty, its

structure, and the three specifie provisions invoked by Iran. All of

these will show that the 1955 Treaty does not regulate the issues of use

of force between the parties placed in question here.

I. THE 1955 Treaty'S HISTORY SHOWSITS LIMITED CHARACTER

As Professer Lowenfeld noted yesterday, this treaty was one of about

twenty substantively similar treaties concluded by the United States with

other countries in the years following the Second World War to promote

trade and investment within the territory of each party by the others'

nationals. A list of these and ether similar treaties is to be found in

International Legal Materials, Volume 20, at page 565 (1981). This

particular treaty was signed in 1955, and entered into force in 1957.

Its history indicates that there was nothing particularly remarkable

aboutit, nor did it mark any drastic shift in the Parties' relations.

Rather, this is one in a century-long succession of commercial and

CR 96/13 - 9 -

consular treaties between the United States and Persia and then Iran. In

substance, it was much like ether post-war treaties. In form, it was a

shortened and simplified version of the text generally used. Its history

does not support the view that this treaty was the foundation of sorne

grand alliance.

All of this is reflected in the United States Senate hearings on the

treaty cited by the Islamic Republic of Iran as Exhibit 98 to its

Memorial. These materials give a good explanation of the nature and

scope of the treaty. They show that it was one of three treaties

considered by the Senate at the same time; the ether two being with The

Netherlands and Nicaragua. The Department of State witness, whose views

are also cited by the Islamic Republic of Iran, described these treaties

to the Senate Foreign Relations Committee as being:

"similar to ethers considered by the Committee during the past
several years. They deal with the customary subjects, such as
the right to carry on business, protection of persans and

property, nondiscriminatory treatment of trade and shipping
and, in the case of the Iran treaty, consular rights and
privileges." (Commercial Treaties With Iran, Nicaragua and The

Netherlands: Hearings before the Benate Committee on Foreign
Relations, 84th Congress, 2nd Session 1 (1956), Exhibit 98 to
the Memorial of the Islamic Republic of Iran.)

The State Department witness continued: "The three treaties now

under consideration are of the traditional type, based upon existing

precedents: they contain no innovations raising problems of

reconciliation with domestic law." (Id. at 2.) The principal innovation

reflected in the Iran treaty was perhaps its shortened and simplified

form. The State Department witness described the treaty as: "an

abridged and simplified version of the treaty type, but [it]

incorporates, nevertheless, the substance of most of the protective

CR 96/13 - 10 -

provisions of the longer treaties" (id.). This material, as I noted, is in

Iran•s Exhibit 98 tc the Memorial.

This background illustrates the 1955 Treaty's practical, commercial

character. There is nothing here of high politics or strategy. This was

not a grand political alliance. Rather, it was one of a century-long

succession of commercial and consular treaties between the Parties. And

this appears from Secretary Dulles' report explaining the treaty tc the

Senate. He said:

"This treaty places economie relations between the United
States and Iran on a bilateral basis similar tc that which
existed under the treaty of friendship and commerce between the
United States and Persia signed at Constantinople on
December 13, 1856 (11 Stat. 709), and terminated May 10, 1928.

It replaces the provisional agreement relating tc commercial
and ether relations, concluded at Tehran May 14, 1928 (47 Stat.
2644) [and had an associate provisional agreement which he
describes] and thus establishes the relations of the parties on
11
a more modern and adequate basis than has heretofore existed.
(Message from the President of the United States, transmitting
a treaty of amity, economie relations and consular rights
between the United States of America and Iran, signed at Tehran
on August 15, 1955. 84th Congress, 2nd Session, Executive E,

at 2.)

Thus, the 1955 Treaty was not an innovation. Instead, it was part

of an evolving series of commercial and consular agreements between the

Parties. The first, that was signed at Constantinople in 1856, remained

in force for 71 years, until 1928 (Treaty of Friendship and Commerce, 11

Stat. 709; TS 273; 8 Bevans 1254).

Article 1 of the 1856 Treaty declares that between the two

governments and their citizens or subjects "There shall be hereafter a

sincere and constant good understanding", a statement of aspiration that

has regrettably not always been attained. The 1856 Treaty otherwise

addresses practical matters: the exchange of diplomatie representatives,

protection of travellers and merchants, the rights tc import and sell

CR 96/13 - 11 -

rnerchandise, and the roles of consuls. Its essence is commerce and

consuls.

The 1856 Treaty was followed in 1928 by a more modern agreement on

trade and commercial relations. It too was of a highly practical

character (Agreement on Commercial Relations, effected by exchange of

notes, May 14, 1928, 47 Stat. 2644; EAS 19; 8 Bevans 1263). It addressed

the treatment of diplomats and consuls, protection of nationals, and

reciprocal most-favoured-nation tariff treatment. Again, it was

utilitarian to the core.

II. THE TREATY'S STRUCTURECONFIRMSITS LIMITED CHARACTER

Beth of these earlier agreements show how the parties sought to

promote friendly relations and commerce between them, through concrete

and specifie measures. The 1955 Treaty is the lineal descendent of these

earlier texts.

The treaty contains 23 articles; Iran rests the substance of its

case on three. However, the Court should consider the total structure of

the 1955 Treaty, since it illuminates beth the obligations contained in

particular articles and those articles' limited territorial application.

Each of the three provisions invoked by Iran must be exarnined in this

total context. Each can be correctly understood only if read in harmony

with the treaty•s overall structure and with all of its ether provisions.

Given the importance of this structure to understanding its specifie

provisions, I will take a little time to review that structure. I

believe this may also help to illustrate how little Iran•s claims here

have to do with the actual substance of this treaty. The Islamic

Republic of Iran places heavy reliance upon Article I, which introduces

CR 96/13 - ~2 -

the treaty and, together with the short preamble, is a precursor to the

detailed provisions that follow.

Article II governs entry into the territory of a party to carry on

trade and the rights of nationals of each country in the territory of the

other.

Article III deals with recognition and rights of companies in the

territory of a party.

Article IV (~) is the second provision relied upon by the Islamic

Republic of Iran. It is a general obligation regarding fair and

equitable treatment of nationals and companies of the other party. The

rest of Article IV contains detailed rules protecting the property of

nationals and companies of each party in the territory of the other.

Article V deals with acquisition and disposai of property and patent

and trademark protection in the territory of a party.

Article VI regulates taxation there.

Article VII regulates exchange controls.

Articles VIII and IX lay down rules governing trade, including

tariffs, and other measures affecting imports into the territory of a

party.

Iran invokes Article X (~), a general provision regarding freedom of

navigation and commerce. The rest of Article X prescribes specifie rules

regulating maritime navigation.

Article XI deals with State-owned enterprises and monopolies within

the territory of a party.

Articles XII through XIX regulate consular questions.

Article XX contains certain exceptions, while Articles XXI through

XXIII deal with settlement of disputes, entry into force and the like.

CR 96/~3 - 13 -

These provisions are inter-connected, each is part of a detailed and

integrated structure for promoting and regulating commerce, investment

and consular relations within each party's territory. Nothing in this

structure, or in any specifie provision, suggests any intent by the

parties to replace or incorporate the rules of international law

otherwise regulating any outbreaks of armed conflict between them.

Mr. President, Members of Court, in the next part of my argument I

shall show how the specifie Articles cited by Iran do not apply to the

circumstances here.

III. THE SPECIFIC ARTICLES CITED BY IRAN DO NOT APPLY

In light of the history and structure I have described, let us

examine the three brief treaty Articles on which this claim entirely

depends.

A. Article I. The Islamic Republic of Iran first invokes Article I,

a short provision stating that "there shall be firm and enduring peace

and sincere friendship between the United States of America and Iran".

The expansive arguments that Iran rests on this short article are

typical of all of its claims here. This whole case rests upon bits of

treaty text isolated from context. These bits of text are then stretched

to incorporate many other rules of international law, including the

Charter and the law of armed conflict. Thus, Article I is asked to carry

all of Iran's claims regarding the events of 1987 and 1988, including the

many inter-linked factual and legal disputes we have described. With

respect, this cannot be.

CR 96/13 - u -

When we examine the specifie wording of Article I several things

appear.

First, this is not the sort of clear language used by States and

careful international lawyers wishing to create specifie international

legal obligations. There are no specifie rules nor standards. There are

no specifie calls for action. Instead, Article I uses language of

aspiration. It describes circumstances the parties hoped would mark

their future relations: they sought "firm and enduring peace and sincere

friendship" .

Such language is hardly unique to this treaty. Such texts are to be

found in many treaties involving countries in all regions of the world.

For example, Article I of the 2950 Treaty of Friendship between Italy and

Turkey states that: "There shall be everlasting peace and friendship

between Turkey and Italy." (Treaty of Friendship, Conciliation and

Judicial Settlement between the Turkish Republic and the Italian

Republic, signed at Rome on 24 March 2950, 96 u.NTS 209 (2951) .) Article

I of the 1957 Treaty of Friendship between Japan and Ethiopia requires

that: "There shall be perpetual peace and friendship between Japan and

Ethiopia and between the nationals of the two countries." (Treaty of

Friendship between Japan and Ethiopia, signed at Addis Ababa on 19

December 1957, 325 u.NTS 99 (1959) .) Article I of the 2948 Treaty between

Hungary and Czechoslovakia bound the parties to "join forces in a policy

of lasting friendship" (Treaty of Friendship, Co-operation and Mutual

Assistance between the Hungarian Republic and the Czechoslovak Republic,

signed at Budapest, 16 April 1949, 477 u.NTS 190 (1963)). Article I of

the 1953 Treaty between the United Kingdom and Libya provided that:

"There shall be peace and friendship and a close alliance between the

CR 96/13 - 15 -

High Contracting Parties."
(Treaty of Friendship and Alliance between

the United Kingdom and Libya, signed at Benghazi, 29 July 1953, 186 UNTS

190 (1954) .) There are many such treaties, sorne providing for referral

of disputes to this Court. Nevertheless, no disputes regarding such

clauses have previously come here.

Whether found in preambles or introductory articles, such texts are

understood to set out goals sought by the parties. They are part of the

context within which other provisions must be construed and applied.

However, such language standing alone is not a sufficient basis for

concrete claims giving rise to the jurisdiction of this Court.

Article I contains no standard. This is because the general,

aspirational language of Article I does not contain standards by which a

party's actions can be measured. We agree in this respect with Iran's

Memorial (at p. 76, para. 3.24) which notes that "Article I does not give

specifie details asto exactly what conduct is prescribed or forbidden."

However, we do not agree that this lack of precision in Article I can be

overcome by reading into the Article other large bodies of law over which

this Court lacks jurisdiction.

Rather, we agree with this Court's analysis in 1980 of this very

treaty. It is this treaty's specifie articles that create standards by

which compliance with it can be measured. It is these specifie articles

that give enforceable legal content to goals such as "friendship". As

this Court said in its Judgment in the case of the United States

Diplomatie and Consular Staff in Tehran, the very purpose of such a

treaty

"is to promote friendly relations between the two counties

concerned and between their two peoples, more especially by
mutual undertakings to ensure the protection and security of

CR 96/1.3 - 1.6 -

their nationals in each others territory" (United States
Diplomatie and Consular Staff in Tehran, Judgment, I.C.J.
Reports 1980, p. 28, para.·S4; emphasis added)).

This Court employed comparable reasoning regarding the FCN treaty

between the United States and Nicaragua. Nicaragua v. United States of

America has been noted by Professer Lowenfeld and will be considered

further this morning by Dr. Murphy. For our purposes now, it is enough

to recall that the matters then before the Court included Nicaragua's

claim that the United States had acted contrary to the abject and purpose

of the US-Nicaragua FCN Treaty. Now Iran contends that it is not making

such an abject and purpose claim here, presumably because it knows the

claim was rejected by the Court in the Nicaragua case. It is in fact

effectively making such an argument in a different guise but in any case

in determining the "abject and purpose" of the treaty, the Court said

that it lay in "the effective implementation of friendship in the

specifie fields provided for in the Treaty, not friendship in a vague,

general sense" (Military and Paramilitary Activities in and against

Nicaragua (Nicaragua v. United States of America), Merits, Judg.ment,

I.C.J. Reports 1986, p. 1.37; emphasis added). The same approach should

again be applied in construing this provision. Its content is to be

found in the specifie undertakings contained in the treaty, not in bread

notions external to it.

Thus, as this Court has recognized, treaties like this - indeed this

very treaty - promote friendly relations through specifie commitments

safeguarding foreign nationals and their property and not through vague

expressions of hopes for the future. It is through compliance with such

specifie provisions that compliance with Article I must be determined.

CR 96/1.3 - 17 -

The role of Article I. We do not suggest that Article I has no role

or that the Court must disregard it. Clearly, it has a role. It is part

of the overall framework of the treaty. It sets goals which should

illurninate the construction and application of ether detailed provisions.

However, the Article does not entail a legally binding requirement,

judicially enforceable by this Court, and ultirnately enforceable through

recourse to the Security Council under the Charter, that there shall be

"peace and sincere friendship" between the United States and Iran. As

Professer Lowenfeld indicated, such an interpretation would vastly expand

this treaty, and the scope of potential disputes thereunder, in ways the

Parties did not intend.

This view of the character of Article I is reinforced by the

practice of the parties under the treaty, and by the general practice of

States.

The practice of the Parties. Certainly, the practice and relations

of the United States and the Islamic Republic of Iran in the years since

1979 do not reveal any mutual understanding that Article I creates

legally binding rules directing their relationship. It is an unfortunate

but compelling truth that relations between these Parties since 1979 have

been rnarked by many periods of tension and even hostility. However, it

was not until the Islamic Republic of Iran decided to file this case that

it accused the United States of violating Article I. Iran did not invoke

Article I in its clairns against the United States in the case concerning

the Aerial Incident of 3 July 1988, Iran's discussion of its treaty

clairns in its Memorial in that case cites several provisions, but not

Article I (Aerial Incident of 3 July 1988, Memorial of the Islamic

Republic of Iran, Vol. I, 24 July 1990, pp. 137-138 and 179-184}. The

CR 96/13 - 18 -

United States, for its part, did not invoke Article I in its arguments in

the case concerning United States Diplomatie and Consular Staff in

Tehran, instead presenting claims based on ether articles of the Treaty

(United States Diplomatie and Consular Staff in Tehran, Memorial of the

Government of the United States of America, January 1980, p. 41). Thus,

in their practice, the Parties have not previously referred tc Article I

as a legal standard controlling their relationship.

State praetiee generally. The general practice of States also

reinforces the conclusion that provisions like Article I do not give rise

tc separately enforceable legal obligations. A few moments age, I

mentioned sorne of the many treaties that contain such provisions. The

Islamic Republic of Iran has cited no cases in which the Court, or

another international tribunal, has granted relief on the basis of such

provisions or indeed where such relief has been applied for. For our

part, we have unearthed no clear State practice suggesting that such

provisions are viewed by States as giving rise tc specifie legal

obligations enforceable by an international tribunal.

Indeed, the practice of States, and of these very Parties shows

little consistency regarding the inclusion of such provisions. This

suggests tc us that such provisions may be included in particular

treaties, or not included, for reasons having tc do more with style or

with national practice than with law. Thus, Article I of Iran•s 1968

Treaty with Malaysia provides that "there shall be perpetuai peace and

everlasting amity between the two peoples" (Treaty of Friendship between

Iran and Malaysia, signed at Kuala Lumpur on 15 January 1968, 787 u.NTS

172 (1971)). By contrast, Iran's treaty with France- a relationship that

is surely of no less importance tc the parties - contains no such

CR 96/13 - 19 -

language (Convention on establishment and navigation, signed at Tehran on

24 June 1964, 747 UNTS 179 (1970)).

As the Islamic Republic of Iran rightly points out in its Memorial

(p. 77, paras. 3.27 et seq.), there is no particular pattern regarding

such clauses in US practice. The goal of friendly and peaceful relations

is regularly mentioned in the preambles of post-World War II US FCN

treaties. However, as Iran's Memorial rightly notes, it is cited in the

initial article of only four such treaties - this one and the US treaties

with China, Nicaragua, Muscat and Oman. Thus, the goal appears in the

first article in a handful of treaties, but remains in the preambles of

far more. These include treaties with countries with which the United

States has extensive and amicable relations - France, Italy, Japan,

Gerrnany, to name a few. This suggests that the negotiators of these

texts did not see the difference in the location of this wording as

materially affecting the overall character of obligations under the

Treaty. Certainly this view is reflected in the comments of the US State

Department officer who explained the treaty to the Senate Foreign

Relations Committee, as contained in Iran's Exhibit 98.

Our written preliminary objection explains further how US officials

at the time this treaty was ratified did not believe that Article I made

any substantive change from normal US FCN treaty texts. This discussion

is to be found in the US preliminary objection at page 44. The Islamic

Republic of Iran disputes the relevance of the domestic US materials

cited. It is for the Court to decide whether such materials assist it,

as indications of the Parties' practice under the Treaty or otherwise.

However, I think the value of such materials is clearly indicated by the

fact that bath Parties here have relied upon them. In this regard, I

CR 96/13 - 20 -

refer the Court to such materials as Exhibit 98 to Iran's Memorial and to

Exhibit 10 to Iran's Observations and Submissions.

Article I does not sweep in the law of friendly relations. In light

of the considerations I have advanced, the Court should reject the

contention of the Islamic Republic of Iran that Article I should be

construed in a sweeping way to make it into a sort of universal

obligation. In its Observations and Submissions (pp. 46-47), Iran makes

the remarkable suggestion that Article I incorporates into the treaty,

and thus brings into its dispute settlement clause, "the principles of

general international law concerning peaceful and friendly relations

between States".

This Treaty did no such thing. Its words cannet be read in this

expanded or artificial way. Neither the words used nor any accepted

guide to interpretation suggests that the Parties agreed to have

virtually all disputes between them subject to this Court's jurisdiction.

Had the Parties intended this remarkable result, they surely would have

said so explicitly. They did not. The Court should not construe such

language in a way that will discourage States from concluding future

agreements that express the noble aspiration for peaceful relations.

Article 31 (3) of the Vienna Convention. I am nearing the end of my

discussion of Article I. I appreciate the Court's continued indulgence.

However, I must here add a brief word about Article 31 (3) of the Vienna

Convention on the Law of Treaties, because the Islamic Republic of Iran

has made much of it.

Article 31 (3) does not support the wish to read Article I and the

other articles of the 1955 Treaty in the expansive ways urged by Iran.

As it applies her, Article 31 (3) is a limiting principle, not a license

CR 96/13 - 21 -

to expand the text of a given treaty. As the Court well knows, Article

31 provides that in interpreting treaties, "there shall be taken into

account, together with the context ... any relevant rules of

international law applicable in the relations between the parties"

(emphasis added) .

The effect of this is far narrower than Iran contends. The word

"relevant" is key here. This word performs several functions in the

text, so sorne commentary on it concentrates on its application in

intertemporal situations (Sir Ian Sinclair, The Vienna Convention on the

Law of Treaties, Second ed. 1984, pp. 138 et seq.). However, the term

also makes clear that there must be a sufficient connection between the

treaty being construed and other treaties which are being looked at to

aid in interpretation. As one commentator described it, "relevant" means

that "the rules must . concern the subject matter in question"

(Mark Villiger, Customary International Law and Treaties, 1985, at 268).

The subject-matter of the 1955 Treaty is investment and similar matters,

not the use of force or "friendship" in sorne broad sense.

In the interest of timing, Mr. President, I will omit part of my

argument but move on to what seems to me the fundamental point with

respect to Article 31 (3), and that is this: the Court here lacks

jurisdiction over the rules of international law that do apply to these

incidents. Namely the law governing armed conflict on the use of force.

Article 31 (3) of the Vienna Convention is an interpretative principle,

not a jurisdiction conferring one. Article 31 (3) does not give a

licence to transplant into general phrases of this treaty whole bodies of

unrelated international law. It does not create legal obligations that

are fundamentally different from those contained in the treaty being

CR 96/13 - 22 -

construed. It does not give rise to jurisdiction that has not been

agreed by the Parties.

Mr. President, Members of the Court, this concludes my discussion of

Article I. I have dealt with it at sorne length because the Islamic

Republic of Iran's approach to this Article is characteristic of all its

treaty claims. Article I has been treated as though it is made of rubber

which can be stretched to cover and confer jurisdiction over a wide

universe of claims. This simply does not work. Article I and the

jurisdiction of this Court cannet be stretched in this way.

B. Article IV (l)

~- Introduction. The Islamic Republic of Iran next seeks to rely on

Article IV (1) of the Treaty. This provision was not referred to in

Iran's Application but was added in the Memorial.

In invoking Article IV {1) Iran takes an article carefully phrased

to limit certain kinds of actions by one party essentially affecting

businesses and investments of the ether party's nationals and again seeks

to stretch and reshape it to cover totally different circumstances. As

with Article I the attempt does not work.

Article IV (1) contains several detailed obligations. It requires

that each party:

"accord fair and equitable treatment to nationals and companies
of the ether High Contracting Party, and to their property and
enterprises; shall refrain from applying unreasonable
discriminatory measures that would impair their legally

acquired rights and interests; and shall assure that their
lawful contractual rights are afforded effective means of
enforcement, in conformity with applicable laws".

Article IV is at the heart of this Treaty's complex system to

protect investments by one party's nationals and the jurisdiction of the

CR 96/13 - 23 -

other. It contains several of the most important provisions protecting

such investments. Article IV (2) regarding full compensation for its

expropriation has been important in the Iran-US Claims Tribunal.

However, the Islamic Republic of Iran does not rely on Article IV (2) or

on any of Article IV's other powerful rules.

Why is only Article I cited? We do not know. We can speculate that

the other parts of Article I are not mentioned because the geographie

field of application of each is expressly limited to actions by a party

within its territory and clearly the actions of the United States that

Iran complains of here did not take place within the territory of the

United States.

Thus, Iran is left with only Article IV (1), apparently believing

that it has global application. For the reasons I shall show, this

interpretation does not stand. This provision does not operate

independently of the rest of the Treaty nor does it regulate the conduct

of the two Governments every place in the world. Moreover, it cannet

sensibly be applied to the matters involving the use of force placed at

issue here by the Islamic Republic of Iran.

2. Article IV (l) regulates activities of an inter.nal

administrative, regulatory and legal character, not use of force

The first notable feature of Article IV (1) is the specifie and

limited nature of the Government activity that it affects. This Article

does not address every form of activity by a party wherever it occurs.

Instead the Article deals with activities taken by parties internally in

the context of their domestic legal administrative or regulatory systems.

The Article deals with internal regulatory measures or similar government

action all taken in the context of a national legal system.

CR 96/13 - 24 -

Now, several features of the text underscore this point. For

example, the Article points to certain "measures" that impair the

lawfully implied interests of foreign investors and businesses. The term

used is "measures". This word does not describe every form of government

activity. Rather it is used to describe action taken by a State in a

domestic legal administrative or regulatory context.

Article IV (1) also requires that foreign investors have the right

to enforce their contracts. Again, this relates to aspects of the

domestic legal system. The Article also requires "fair and equitable

treatment". This requirement operates coherently only in the context of

the domestic, administrative or regulatory measures of a party.

All of the ether provisions of Article IV, with which Article IV (1)

must be read in harmony are similar. Article IV (2) speaks of "constant

protection and security" for investments. Article IV (3) protects

foreign businesses' premises from improper inspection or disturbance.

Article IV (4) is a general guarantee of foreign investors' rights to

establish and carry on their businesses.

Each of these parts of Article IV clearly operates only in the

context of domestic legal administrative or regulatory activities of a

party within the framework of its internal legal system.

Thus, Article IV (1) does not affect every form of government

activity. It deals only with those activities that a party carries on

within its internal legal administrative regulatory régimes. This

article does not address ether kinds of government action. it does not

regulate actions taken internationally by a party in conducting its

foreign relations. It certainly has no relevance to actions involving

CR 96/13 - 25 -

the use of force. Article IV (l) does not apply to the events complained

of by the Islamic Republic of Iran.

3. Article IV (1) cannot be applied to ar.med conrlict

There is a second fundamental problem with the Islamic Republic of

Iran's attempt to apply Article IV to the circumstances of this case.

The obligations it imposes cannat coherently be applied to situations

involving armed conflict like those complained of here. Iran's claim

apparently involves two legal concepts in the Article: "fair and

equitable treatment" and "unreasonable and discriminatory measures".

These concepts cannat be applied in an intelligible way to these disputes

regarding the legality of the use of force.

If uses of force in particular situations are consistent with the

Charter and with the rules of armed conflict - as we would show should

this matter proceed to the merits - it is meaningless to claim that use

of force must also be "fair and equitable". And what can it possibly

mean that the lawful use of force must not be "discriminatory" in the

sense of this Treaty? These concepts were clearly intended to affect

government regulation of personal and property rights, and not to

regulate the use of force in armed conflict. They cannat sensibly be

applied to the events that are at the heart of Iran's claims here.

4. Article IV (1) is an additional sareguard for business and
investments otberwise covered by the Treaty

Third, the Islamic Republic of Iran's efforts to apply this article

in this case must fail because the article does not apply to the

particular events - actions by the United States affecting Iranian

CR 96/13 - 26 -

installations presumably located on Iran's continental shelf- involved

in this case.

Article IV (l) applies only to those businesses or investments that

otherwise fall within the scope of the treaty. These events, involving

Iran's platforms located "at home" on the continental shelf of Iran,

simply do not fit within the bilateral structure to protect international

business and investment created by the l955 Treaty.

As I have noted, Article IV (l) is just one part of an integrated

structure for the protection of business and investment in the territory

of one party by the nationals and companies of the other. Article IV

(l), as part of this inter-connected structure, is not free-standing, it

does not operate independently of the rest of the treaty, it cannet be

construed without reference to the treaty's other provisions.

The Articles of the Treaty that lie on either side of Article IV

show how this whole system revolves around the protection of businesses

and investments of one party's nationals and companies in the territory

of the other party. Article II allows nationals of one party to come to

the territory of the other to carry on trade. Article III gives those

nationals the right to go to local courts in the ether country to enforce

their rights. Article V allows them to lease real estate and to acquire

and use other kinds of property there. Article VI bars discriminatory

taxation of those foreign nationals and companies in the other

jurisdiction. Other articles round out this structure of the rights of

nationals and companies of one party to do business in the territory of

the ether.

Article IV (l) is simply an additional safeguard designed to

supplement this system of specifie protections for foreign investments

CR 96/l3 - 27 -

and overseas businesses. A study of the standard form FCN treaty,

prepared by Mr. Charles Sullivan, the State Department negotiator of many

of these treaties, explains that this language was conceived as an

additional layer of protection for businesses and investments otherwise

covered by the Treaty. Mr. Sullivan explained that the general

requirement that each party accord "equitable treatment" provides a basis

for making representations against actions detrimental to United States

interests that may not be covered by any specifie rule in the treaty, as

for example "a measure that is superficially non discriminatory but is so

framed asto harm only United States' interests" (Charles Sullivan,

Department of State, Treaty of Friendship, Commerce and Navigation,

Standard Draft (Analysis and Background), p. 67).

Thus, in our view, Article IV (1) only addresses businesses or

investments that otherwise fall within the system of protection created

by the 1955 Treaty. These events involving Iran's platforms on Iran's

continental shelf do not fall within the protection of this system.

5. The language of Article IV (1) confirms its limited territorial

application

I will conclude this discussion by noting sorne features of the text

of Article IV (1) that I think under-score its limited territorial

application.

Thus, its first clause requires each party to accord "fair and

equitable treatment" to nationals and enterprises of the other party.

This general obligation seems most logical in a territorial sense.

Iran's contrary suggestion notwithstanding, the parties surely did not

intend that they would treat the enterprises of the other party

"equitably" in relation to actions outside their borders. They could not

CR 96/13 - 28 -

have agreed tc include the nationals and companies of the ether country

in measures they take tc promote trade with third countries. Similarly,

they surely are not required tc protect the other's nationals and

companies in bilateral investment treaties with third countries.

The second clause of Article IV (1) is similar. It requires that

the parties avoid "unreasonable or discriminatory measures" that might

impair foreign investors' property rights. This obligation toc operates

in a limited territory field; the Encyclopedia of Public International

Law describes the typical clause of this kind as one which "forbids

either party tc take any unreasonable or discriminatory measures that

would impair the legally acquired rights or interests within its

territory or nationals and companies of the ether party" (D. Blumenwitz,

Treaties of Friendship, Commerce and Navigation, 7 Encyclopedia of Public

International Law (R. Bernhart ed.), 480, 486; emphasis added).

The limited territorial scope or Article IV (l) is perhaps most

apparent in the Article's final clause. It requires the parties to

ensure that foreign investors' lawful contractual rights "are afforded

effective means of enforcement, in conformity with applicable laws".

This can only be understood tc govern the conduct of a party within its

own territory. Neither party could ensure the enforcement of contractual

rights within the territories of ether countries. Neither party could

assure the world-wide availability of means for the other's nationals tc

enforce their contracts. This obligation can only be read in a

territorial sense. Each party agreed tc provide for enforcement of the

other's nationals contract rights within its territory- not every place

in the world.

CR 96/13 - 29 -

Thus, the specifie obligations contained in Article IV (l) can

sensibly operate only within the territory of the party affected by the

article. Article IV (1) is a carefully worded text that promotes and

protects investments and businesses conducted by nationals and companies

of one party in the territory of the ether, not every place in the world.

For all these reasons, Article IV (l) provides no basis for the

Court's jurisdiction here.

C. Article X (1)

Finally, in scouring the FCN Treaty seeking possible bases for its

claims, the Islamic Republic of Iran identifies Article X (l) . This is a

seventeen word paragraph introducing ether paragraphs regulating maritime

matters. It reads: "Between the territories of the two High Contracting

Parties there shall be freedom of commerce and navigation."

As with the other two articles invoked by Iran, Article X (1)

provides no logical basis to bring Iran's claims within the jurisdiction

of this Court. This article addresses maritime commerce between the two

parties. It lends no plausible support to Iran's very different claims

involving the legality of the use of force. Indeed, it seems to us quite

remarkable that, in the circumstances here, Iran attempts to base its

claim on a provision intended to promote the freedom and safety of

maritime commerce. Article X (l) must be read in light of the ether

provisions of Article X. Read in this way, it is apparent that it lays

dawn a general goal of peaceful and efficient maritime commerce between

the parties, to be implemented through ether detailed provisions in the

Article.

CR 96/13 - 30 -

Writers on these treaties make clear that this provision and similar

provisions in ether treaties like it, refer especially to maritime

matters. In his study of the Standard Draft of the Treaty of Friendship,

Commerce and Navigation, Charles Sullivan, who was one of the negotiators

of these treaties, writes that the counterpart to Article X (1) in the

standard draft is "considered as having special relevance to seaborne

traffic" (Charles Sullivan, Department of State, Treaty of Friendship,

Commerce and Navigation. Standard Draft (Analysis and Background),

pp. 286-87).

Other commentators agree that the purpose of the navigation article

in such treaties is to regulate shipping, not matters of commerce

generally. Treaty negotiator Herman Walker, described the standard

article on these matters as "a navigation article" that:

"reaffirms a liberal regime of treatment to be applied to
international shipping. The rules set forth reflect the
practices which have historically been developed by leading

maritime nations ... " (Herman Walker, The Post-War Commercial
Treaty program of United States, LXXIX Political Science
Quarterly 57, 73.)

Piper's study of the navigation provisions in US commercial

treaties is similar. His analysis of the standard shipping provisions in

post-war FCN treaties, like this one, shows that the purpose of articles

like Article X, is to regulate shipping, not commerce generally (Don c.

Piper, "Navigation Provisions in United States Commercial Treaties", 11

American Journal of Comparative Law 184 (1962)).

In Article X {1) , the parties did not agree to protect commerce in

the abstract sense of all economie activity. Rather through the totality

of Article X, they agreed to take specified practical steps in operating

their ports and in regulating navigation. These are spelled out in the

CR 96/13 - 31 -

five specifie paragraphs, in Article X, which give concrete meaning to

the general goal set by Article X (1) . None of these specifie paragraphs

has anything to do with Iran's claims here.

Moreover, as with the other articles Iran invokes, this introductory

language has an important territorial limitation. It does not apply

every place in the world. Rather, each element of Article X deals with

actions taken by each party within its jurisdiction to promote or

facilitate maritime commerce between them.

Now, the Islamic Republic of Iran seeks (Observations and

Submissions, pp. 50-51) to stretch Article X (1) into a blanket guarantee

of free commerce "independent of navigation". As with the similar

efforts to stretch Articles I and IV (1), this cannat be correct.

Article I promotes and regulates maritime commerce in specifie ways,

through specifie and carefully worded undertakings. Article X (1) 's

brief reference to freedom of commerce and navigation cannat reasonably

be stretched to become a guarantee of unimpeded commerce in every

respect. It certainly cannat be stretched to encompass facilities for

the exploitation of natural resources simply on the assumption that those

resources might someday become part of commerce between the parties.

The Court should not accept Iran's novel interpretation of the

article, which, to our knowledge, has not previously been asserted

between the Parties. Certainly, the practice of the Parties since 1979

shows that they have not construed the Treaty in this way. The Court

should not give credence to this opportunistic new reading.

Now, in this regard, it is perhaps worth noting that the Islamic

Republic of Iran did not find it necessary to refer at all to this

Article in its Memorial when it sought to defend the legality of Iran's

CR 96/D - 32 -

military actions impairing the freedom of navigation in the Gulf.

Instead, Iran•s Memorial (Memorial p. 25, para. 1.54) argued that "in the

circumstances the actions of its naval forces in the Persian Gulf were

fully justified by the laws of neutrality". This statement correctly

identifies, part at least, of the body of international law that must be

applied in assessing Iran's military actions - and the military responses

of the United States. These matters are regulated by the law of

neutrality and by the law of armed conflict, and not by this or any ether

article of the 1955 Treaty. They are not within the jurisdiction of this

Court.

I will conclude this part of my argument with a final point that

follows closely from what I have just said. As with the previous

article, Article X (1) simply cannet intelligibly be applied in

situations regulated by the law of armed conflict. The essence of

Article X is the regulation of peaceful maritime commerce between the

parties. It does not replace the law of armed conflict where that law

applies.

D. Article XX (l)(d)

Mr. President, Members of the Court, I have imposed upon the Court

for a long time, and I am grateful for your continued attention. I will

conclude with a brief comment regarding the Islamic Republic of Iran•s

detailed arguments (Observations and Submissions at 51-59) about Article

XX (1) (d), which excludes certain matters from the operation of the

Treaty. New here, confusion seems to have arisen in the exchange of

written pleadings as to the issues now actually before the Court for

decision. Today, the core question is the Court's jurisdiction. In this

CR 96/13 - 33 -

connection, the interpretation and application of Article XX (1) (d) are

not now at issue.

Article XX (1) (d) requires that the 1955 Treaty

"shall not preclude the application of measures necessary
to fulfil 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".

Our preliminary objection suggested that, as a jurisdictional

matter, this,provision helped to show that Articles I, IV and X, those

invoked by Iran, were not designed or intended to govern Iran's claims

regarding the use of force. This is because Article XX (1) (d) manifested

the parties' intent to keep such matters outside the scope of the Treaty.

We believe that jurisdictional point remains valid. However, the Islamic

Republic of Iran's Observations and Submissions responded to it with

several pages of animated arguments essentially addressing how Article XX

(1) (d) should be interpreted and applied to the merits of this dispute.

With respect, I think this is not the point on which to join issue

on these particular arguments. We do not now, where the issue is the

Court's lack of jurisdiction, raise Article XX (1) (d) as a defence

against the merits of Iran's claims. Now, the significance of Article XX

(1) (d) is not at the heart of our position concerning this Court's lack

of jurisdiction. It should not be allowed to cloud the issues that are

before the Court. Thus, I suggest that it is not necessary for the Court

to address the specifie arguments regarding the construction and

application of Article XX (1) (d), unless there should be a future merits

phase.

Mr. President, I am at the end. I am grateful for the Court's close

attention as I have reviewed the history and structure of this treaty to

CR 96/13 - 34 -

show that it does not regulate the matters placed at issue by the Islamic

Republic of Iran. I have also addressed each of the three specifie

articles relied upon by Iran. In each case I have shawn that the cited

provision cannat reasonably be interpreted to sustain the claims

submitted. Article I's affirmation that there shall be peace and

friendship between the parties cannat be stretched to bring into the

treaty, and into the jurisdiction of this Court, all of the law of war

and peace. Article IV (1) has no relevance to the use of force, nor does

it caver actions and installations that are not otherwise within the

scheme of the 1955 Treaty and finally, Article X (1) 's undertakings

regarding maritime commerce are likewise not relevant to Iran's actual

claims. None of these claims has any reasonable connection to the treaty

provisions on which they are supposedly based. This Court therefore

lacks jurisdiction over them.

This concludes my presentation. Now, or after the Court's morning

recess, I would invite the Court to hear my colleague, Dr. Sean Murphy,

Counsellor for Legal Affairs of the United States Embassy at The Hague.

I thank the Court.

The PRESIDENT: Thank you very much, Mr. Crook. I now give the floor

to Dr. Sean Murphy.

Mr. MURPHY: Mr. President, Members of the Court, it is a great

privilege to appear once again before this Court.

As Professer Lowenfeld stated yesterday, the United States does not

believe that the case concerning Military and Paramilitary Activities in

and against Nicaragua (Nicaragua v. United States of America), I.C.J.

Reports 1986, p. 4 (27 June) provides the appropriate guidance for the

CR 96/13 - 35 -

disposition of the case before the Court today. However, in view of

Iran's repeated references to the Nicaragua case in its effort to

establish jurisdiction of the Court in this case (Iran Observations and

Submissions on the US preliminary objection, 1 July, 1994, paras. 2.22

note 66, 2.23 note 68, 2.24 note 70, 3.05, 3.18-20, 3.39, 3.49-51, 3.55,

3.57, 3.60-64, 4.03, 4.24, 4.28), it is important to address squarely the

relevance of the Nicaragua case to the case before you today.

In reading the pleadings of the Nicaragua case, it is readily

apparent that Nicaragua's claim under the bilateral FCN Treaty was

something of an afterthought. Indeed, when Nicaragua filed its

Application, it did not even allege that the United States had violated

the FCN Treaty, nor did it raise such a claim throughout the interim

measures phase during which questions of jurisdiction were strenuously

argued. Rather, Nicaragua invoked exclusively the Court's jurisdiction

under Article 36 (2) , claiming that the United States had violated

certain treaties, notably the charters of the United Nations and of the

Organization of American States, and further had violated customary rules

of international law.

Only in its Memorial on jurisdiction did Nicaragua first allege

violations of the FCN Treaty, even then devoting just a few pages to the

issue. Similarly, the United States only briefly responded to those

allegations in its lengthy Counter-Memorial. The lack of attention to

the FCN Treaty during the jurisdiction phase was particularly apparent

during the oral proceedings. Nicaragua did not refute any of the

arguments made by the United States in its Counter-Memorial concerning

the FCN Treaty. In fact, Nicaragua•s only mention of the FCN Treaty

during the oral proceedings occurred during the closing statement of the

CR 96/13 - 36 -

Nicaraguan Agent, who simply stated that the FCN Treaty constituted a

subsidiary basis for the Court's jurisdiction (Nicaragua v. United States

of America, oral proceedings on jurisdiction, 10 October 1984, CR 84/15

at 74). Given Nicaragua's lack of attention to the FCN Treaty, the

United States, in turn, did not mention the FCN Treaty at all in its oral

argument, nor did the Court ask any questions of the parties regarding

the FCN Treaty.

So, I think it fair to say that the issues posed by the FCN Treaty

were not fully addressed by the parties at the jurisdictional phase due

to their attention to other issues. Only a few pages of the Court's

decision on jurisdiction address the FCN Treaty (I.C.J. Reports 1984,

paras. 77-83) and those few pages do not address certain key issues.

Sorne of these issues were addressed by the Court in its decision on the

merits, but at that phase the Court only had the benefit of Nicaragua's

views when reaching its decision.

What were the acts of the United States which Nicaragua claimed

violated the FCN Treaty? While Nicaragua allege that all the US actions

complained of in its Application violated the FCN Treaty, including the

alleged mining of Nicaraguan ports in early 1984 and certain attacks on

Nicaraguan ports and port installations in late 1983 and 1984. Of

particular relevance to this case were Nicaragua's allegations that the

United States twice attacked an underwater oil pipeline and two oil

storage facilities associated with its ports (I.C.J. Report 1986, paras.

75, 81 and 85).

The Court passed judgment on three of Nicaragua's claims involving

the treaty - the claim that these acts violated the object and purpose of

the FCN Treaty and claims that they violated two specifie provisions of

CR 96/13 - 37 -

the FCN Treaty - Article I (concerning equitable treatment of nationals)

and Article XIX (concerning freedom of commerce and navigation) .

It is our contention that the Court's disposition of Nicaragua's

claims does not support The Islamic Republic of Iran's position in this

case. To the contrary, as I will show, the Court's disposition supports

the United States position. My presentation will proceed as follows.

First, I will explain why the Nicaragua case does not support a finding

of jurisdiction over the individual articles of the 1955 Treaty relied

upon by Iran in this case. Second, I will explain why the Court's

overall reasoning in the Nicaragua case supports the thrust of the United

States' presentation in this case and finally I will explain why the

Nicaragua case does not support the notion that these issues should be

held over to the merits.

I. THE ARTICLES OF THE 1955 Treaty INVOKEDBY THE
ISLAMIC REPUBLIC OF IRAN ARE NOT SUPPORTEDBY THE

NICARAGUACOURT'S REASONINGWITH RESPECT
TO THEIR COUNTERPARTS

So, let me begin by briefly explaining why the Nicaragua decision

provides no support for a finding of jurisdiction concerning the

individual articles of the 1955 Treaty pled by Iran in this case.

Friendly Relations

The first article of the 1955 Treaty that Iran claims the United

States violated is Article I, which, as Mr. Crook bas discussed, exhorts

the parties to maintain friendly relations. The Nicaraguan case does

not provide any support for a finding of jurisdiction in this case with

respect to an argument based on "friendly relations".

CR 96/13 - 38 -

In the Nicaragua case, the Court decided that it did not have

jurisdiction under the FCN Treaty to address a general claim that the

United States was acting in an unfriendly manner - a bread claim that

seems, in many respects, similar to Iran's sweeping claim in this case.

In its memorial on jurisdiction, Nicaragua claimed that the United

States' actions were contrary to "the entire spirit of the Treaty"

(Nicaragua Memorial on jurisdiction, 30 June 1984, para. 175). At the

merits phase, Nicaragua recast this general claim as a claim that the

United States had defeated the abject and purpose of the Treaty

(Nicaragua Memorial on merits, 30 April 1985, paras. 410-413). The Court

was quite clear, however, that its jurisdiction to address that claim did

not arise under the FCN Treaty. Rather, the Court reasoned that a

State's obligation not to deprive a treaty of its abject and purpose was

an obligation arising under customary international law, separate of the

treaty (I.C.J. Reports 1986, paras. 270-71).

While the Islamic Republic of Iran concedes that Nicaragua's

generalized claim was outside the jurisdictional clause of the FCN

Treaty, it tries to argue that the presence of Article I in the 1955

Treaty makes this a different case than the Nicaragua case (Iran

Observations and Submissions on the United States preliminary objection,

1 July 1994, para. 3.20). As Mr. Crook has shawn, however, Article I

cannat be regarded as setting forth a discrete legal obligation upon

which a claim may be brought. In the context of the Nicaragua case, two

further points may be made. First, Article I in the 1955 Treaty cannat

be equated with an obligation arising under customary international law

not to defeat the "abject and purpose" of the 1955 Treaty. Article I of

the 1955 Treaty is quite different than any such obligation, as the

CR 96/13 - 39 -

Islamic Republic of Iran itself appears to concede (Iran Memorial, 8 June

~993, para. 3.09). Article I speaks to the desire of general friendship

between Iran and the United States, whereas an obligation not to defeat

the "abject and purpose" of a treaty, as the Court stated in Nicaragua,

speaks to "the effective implementation of friendship in the specifie

fields provided for in the Treaty, not friendship in the vague general

sense" (I.C.J. Reports 1986, para. 273). Second, in the Nicaragua case,

the Court speculated that two parties might write a sweeping treaty

provision by which each party "binds itself, for so long as the Treaty is

in force, to abstain from any act toward the ether party which could be

classified as an unfriendly act, even if such act is not in itself the

breach of an international obligation" (I.C.J. Reports 1986, para. 274).

That language is not the type of language present in Article I of the

~955 Treaty, nor is there any evidence in the travaux préparatoires or in

the subsequent conduct of the Parties that supports such a reading of

Article I. In short, Article I of the ~955 Treaty fits neither the

Nicaragua Court's conception of an article designed to create a legal

obligation to refrain from all actions of any kind, even if unlawful, nor

the Court's conception of abject and purpose. So, in our view the

Nicaragua case provides no support for Iran's claim based on Article I of

the ~955 Treaty.

Equitable Treatment

The next article of the ~955 Treaty that Iran claims the United

States has violated is Article IV (~), which among ether matters

addresses equitable treatment by one party of the nationals and companies

of the ether party. The equitable treatment provision of Article IV (~)

CR 96/13 - 40 -

had a counterpart in the Nicaragua case - Article I of the FCN Treaty -

but, again, it is clear that the Court's disposition of Nicaragua's claim

provides no support for Iran in this case.

In its pleadings, Nicaragua claimed that a wide array of actions

violated Article I of the FCN Treaty, including certain attacks on oil

installations that were servicing Nicaraguan ports (Memorial of Nicaragua

on questions of jurisdiction, June 30 1984, para. 174; Nicaragua v.

United States of America oral proceedings on the merits, 20 September

1985, CR 85/27, pp. 6-8). In the course of its decision, the Court

found that sorne of those actions, including the attacks on the oil

installations, were in fact attributable to the United States. The

Court, however, did not find that those actions fell within the scope of

Article Ion "equitable treatment". The Court analyzed the "equitable

treatment" provision only with respect to a narrower category of acts

specifically directed against Nicaraguan citizens, such as kidnapping

(I.C.J. Reports ~986, para. 277). Evidently the Court did not believe

that the reguirement of "equitable treatment" had anything to do with

naval attacks on ports and oil installations at those ports. By the same

token, the requirement of equitable treatment has nothing to do with the

attacks at issue in this case.

Now, as I noted, the Court in the Nicaragua case did regard a narrow

class of acts specifically directed against Nicaraguan nationals as

potentially relevant under the treaty. The Court rejected Nicaragua's

claims in that respect because it found that this narrow class of acts

could not be imputed to the US Government. In doing so, the Court noted

that even if such actions could be imputed to the US Government, there

would be a further issue of whether a provision for "equitable treatrnent"

CR 96/13 - 41 -

can be read as addressing actions by the US Government against

Nicaraguans in Nicaragua. The Court did not need to address that issue,

but it suggested that, regardless of whether Nicaragua on the merits

could prove that the US Government committed such actions, there was a

threshold legal issue as to whether the "equitable treatment" provision

covered such actions at all. As Mr. Crook has shawn, Article I (1) does

not caver such actions, and therefore the Islamic Republic of Iran's

claims with respect to this article have no reasonable connection.

Freedom of Commerce and Navigation

The final article of the 1955 Treaty that Iran claims the United

States violated is Article X (1) concerning the freedom of commerce and

navigation. Iran has pointed out that, in the Nicaragua case, the Court

accepted Nicaragua's allegations that certain US actions, including

attacks on oil pipelines and oil storage installations, had violated the

analogous article of the FCN Treaty, Article XIX (I.C.J. Reports 1986,

para. 192 (7) and (11)). In the Nicaragua case, however, the facts

underlying the Court's decision regarding freedom of commerce and

navigation were quite different than the facts pled by the Islamic

Republic of Iran here. In determining that the United States had

violated Article XIX of the FCN treaty, the Nicaragua Court directed its

attention solely to actions by the United States that impeded maritime

commerce.

In finding that the mining of Nicaraguan ports violated the freedom

of navigation and commerce guaranteed by Article XIX, the Court stated

that

"where the vessels of one State enjoy a right of access to
ports of another State, if that right of access is hindered by
the laying of mines, this constitutes an infringement of the

CR 96/13 - 42 -

freedom of communications and of maritime commerce" (I.C.J.

Reports 1986, paras. 253 and 278).

Thus, the relevance to Article XIX of the laying of mines was the

impediment they posed to maritime commerce.

Second, the Court also found that the United States had attacked

Nicaragua's ports and port facilities associated with the off-loading of

goods from ships, such as fuel and weapons, and had prevented Nicaraguan

ships from calling at US ports (I.C.J. Reports 1986, para. 292 (7) and

(11)). The Islamic Republic of Iran is correct that these Nicaraguan

port installations included cil pipelines and storage tanks. Those

installations, unlike the Iranian platforms in this case, were not being

used to conduct military operations. Moreover, even on the facts as

stated by Iran in this case, it is clear that the Iranian platforms

should be distinguished from the oil installations in the Nicaragua case.

In that case, the cil pipelines were part of Nicaragua's port facilities

and were used by foreign oil tankers to off-load oil; similarly, the

storage tanks were used to store the off-loaded cil and were part of the

port facilities (see Nicaragua Memorial on the merits, 30 April 1985,

Annex F, pp. 92-93, 169-70 and Annex J, Att. 1, at 3; Nicaragua v. United

States of America, oral proceedings on the merits, 18 September 1985,

CR 85/24, p. 52). Thus, the attacks that served as the basis for the

Court's decision in the Nicaragua case were inextricably related to, and

were specifically directed at, maritime commerce, and not to Nicaragua's

internai exploitation or development of resources.

The Court also found that the US economie embargo violated

Article XIX. In that respect, the Court did not rest its decision on

paragraph 1 of the article, but felt it necessary to quote from paragraph

CR 96/13 - 43 -

3 of the article, which focuses in on an obligation that states that

vessels of one party have the right to bring their cargo to the ports of

the ether party. The Court then quoted a provision within the us

Executive Order establishing the embargo which denied Nicaraguan vessels

this right (I.C.J. Reports 1985, paras. 279). In ether words, the Court

did not accept the view advanced by Nicaragua that the economie embargo

as a whole violated Article XIX of the FCN Treaty (Nicaragua Memorial on

the merits, 30 April 1985, para. 425) but, rather, narrowed the scope of

its finding to actions by the United States that directly affected

maritime commerce.

The Court's emphasis on the issue of maritime commerce is consistent

with scholarly analyses of such provisions (see, e.g., D. Piper,

"Navigation Provisions in United States Commercial Treaties", 11 Am. J.

Comp. L. 184, 189-203 (1962); H. Walker, "The Post-War Commercial Treaty

Program of the United States", 73 Pol. Sei. Q. 57, 73). Further, the

Court's reasoning was no doubt dictated by the structure of Article XIX,

which parallels that of Article X of the 1955 Treaty. In both treaties,

the first paragraph asserts a general principle regarding the freedom of

commerce and navigation between the territories of the parties, but, as

Mr. Crook explained, the article as a whole addresses specifie benefits

to be accorded to maritime commerce.

Now the facts underlying Iran's claim before this Court under the

navigation article is very different in nature. The Islamic Republic of

Iran does not claim that the United States engaged in attacks on Iranian

ports or port facilities, or even Iranian vessels. Even if one accepts

the facts as stated by Iran, those facts involve only attacks on Iranian

platforms engaged in the interna! exploitation of petroleum resources;

CR 96/13 - 44 -

the cil purportedly exploited by these platforrns was pumped by sub-sea

lines to ether facilities in the Islamic Republic of Iran (Iran Memorial,

8 June 1993, paras. 1.11-1.19).

We submit that the Court's reasoning in Nicaragua is most properly

read for jurisdictional purposes as requiring a reasonable connection

between the allegedly unlawful conduct and sorne impediment to maritime

commerce between the territories of the two parties. In this case, Iran

has not shawn any such connection between the attacks on the three cil

platforrns and maritime commerce.

II. THE OVERALLTHRUST OF THE US PRESENTATION IS SUPPORTED

BY THE COURT'S REASONING IN THE NICARAGUACASE

Let me turn now to the second part of my presentation, which

involves relating the Nicaragua case to the overall thrust of the US

presentation in this case. While the Islamic Republic of Iran says its

claims fall within the 1955 Treaty, at their core those claims in fact

relate to the law on the use of arrned force. The claims are governed by

ether sources of law, such as the United Nations Charter, treaties on the

use of armed force, and customary and general rules of international law

relating to jus ad bellum and jus in bello.

In the Nicaragua case, the Court also faced a claim by Nicaragua

that was purportedly associated with the FCN Treaty, but which in fact

derived from customary and general rules of international law. As I

previously noted, Nicaragua initially claimed that various acts by the

United States were unfriendly, which it then recast as a claim that the

United States had underrnined the "abject and purpose" of the FCN Treaty.

Yet the Court found that it had no jurisdiction over this claim pursuant

to the FCN Treaty because such an obligation arase under customary

CR 96/13 - 45 -

international law, independent of the treaty (I.C.J. Reports 1986,

paras. 270-71). It is entirely consistent with the Court's holding in

the Nicaragua case to recognize that Iran's clairns here are for what they

are and to acknowledge that there is no jurisdiction over them under the

compromissory clause of the FCN Treaty. Iran may protest that it only

seeks to bring claims under specifie articles of the 1955 Treaty (Iran

Observations and Submissions on the US preliminary objection, 1 July

1994, para. 3.05), but this is no different than the Government of

Nicaragua asserting that its generalized claim regarding the FCN Treaty

fit within the four corners of that treaty (Nicaragua Memorial on

jurisdiction, 30 June 1984, paras. 164, 175-76). The fact is that in

both cases the claimant is trying to use a commercial treaty to get at

norms that arise elsewhere in international law, norms over which the

Court does not have jurisdiction under that treaty. In the Nicaragua

case, the Court declined to accept that approach; in the current case,

the Court should likewise find that it does not have jurisdiction under

Article 36 (1) .

There is another overall point in the Nicaragua Court's analysis

that is relevant here, although it did not deal specifically with the FCN

Treaty. In the Nicaragua case, the Court found that it had bread

jurisdiction under Article 36 (2) of its Statute deriving from the US

acceptance of compulsory jurisdiction. However, the Court also found

that the so-called "multilateral treaty reservation" to the

United States' acceptance of the Court's compulsory jurisdiction barred

Nicaragua's claims that were based on multilateral treaties. Yet, the

Court found it could nevertheless adjudicate Nicaragua's claims under

Article 36 (2) using the relevant rules of customary international law

CR 96/13 - 46 -

but only because those rules had an independent status and essentially

contained the same content as the relevant multilateral treaties. The

Court stated that the "essential consideration is that bath the

United Nations Charter and customary international law flow from a common

fundamental principle outlawing the use of force in international

relations" (I.C.J. Reports 1986, para. 181).

The relevance of that finding to this case is as follows. In this

case, the Court clearly has no general jurisdiction to adjudicate a claim

by Iran against the United States for violation of the UN Charter, other

treaties governing the use of force, or even customary rules outlawing

the use of force in international relations. The question then becomes

whether, in light of the lack of that general jurisdiction, the Court may

nevertheless exercise jurisdiction over such claims pursuant to a

bilateral treaty conferring specifie jurisdiction over commercial

disputes. In our view, the Nicaragua decision makes clear that such an

exercise of jurisdiction is inappropriate. The commercial treaty does

not flow from the same fundamental principles as the norms on the use of

force. The Islamic Republic of Iran's claims require this Court either

to interpret a body of law that does not contain the relevant principles

of law, or to go outside that body of law over which it has jurisdiction.

As Professer Lowenfeld and Mr. Crook made abundantly clear, the 1955

Treaty does not contain the relevant principles of law to address the

claims brought by Iran in this case. Therefore, the Court, consistent

with its approach in the Nicaragua case, should decline to adjudicate

this matter under the 1955 Treaty.

CR 96/13 - 47 -

III. THE NICARAGUADECISION DOES NOT SUGGEST THAT SUCH
MATTERSSHOULDBE ADDRESSEDAT THE MERITS STAGE

Now, at this stage, one might challenge my analysis by noting that,

even if I am correct, sorne of the points I am arguing from the Nicaragua

case were only decided at the merits phase, and therefore should not be

applied at the jurisdiction phase in this case (see Iran Observations and

Submissions on the US preliminary objection, 1 July 1994, para. 3.39).

I will briefly respond to that challenge. First, as I noted from

the outset, the parties' treatment of the FCN Treaty at the jurisdiction

phase in the Nicaragua case was cursory and no doubt influenced the

Court's decision to hold over certain matters so as to have a fuller

briefing. For instance, at the jurisdiction phase, it was not at all

clear that Nicaragua was alleging that the United States had violated the

FCN Treaty's abject and purpose. This only became clear at the merits

phase and, thus, it is no surprise that only at the merits phase did the

Court find that it had no jurisdiction under the FCN Treaty over that

claim. Moreover, the Court was no doubt also influenced at the

jurisdiction phase by its finding that it had jurisdiction under Article

36 (2) of its Statute over Nicaragua's claims concerning the use of force

as they arase under customary international law. There was little to be

gained by dismissing the FCN claims immediately.

Second, and this is perhaps a more substantive point, because the

Nicaragua Court at the jurisdiction phase found that it had jurisdiction

over Nicaragua's claims concerning the use of force as they arase in

customary international law, the Court was not forced at that phase to

consider the impact of a lack of such jurisdiction on its jurisdiction

under the FCN Treaty. In ether words, the Court was not obliged to

CR 96/13 - 48 -

address the implication of a lack of jurisdiction under Article 36 (2)

over its ability to proceed with the same claims under a much narrower

basis under Article 36 (1) . In this case, our view is that the Court is

obliged to consider the lack of such jurisdiction at this phase in the

proceedings.

IV. CONCLUSION

Allow me to conclude, Mr. President, by reiterating that the

majority opinion in the Nicaragua case contains certain elements that are

of relevance to the case now before the Court. It is our contention that

the overall reasoning of the Court, as well as its analysis of individual

articles in the FCN Treaty, inferentially support the United States'

position in this case. Moreover, in our view the manner in which the

Nicaragua case developed suggests that, after full argument by both sides

on the specifie provisions of a commercial treaty that are at issue, the

Court can and ought to determine at the jurisdiction phase whether -

accepting the facts as pled by the claimant - a claim has been stated

that fits those provisions.

That concludes my presentation, Mr. President. Mr. Chorowsky is the

next speaker who would appear on our behalf to discuss in sorne greater

detail why under the rules and jurisprudence of the Court make it

appropriate for the Court to dismiss Iran's claims at this stage. Thank

you.

The PRESIDENT: Thank you very much Dr. Murphy. The hearings are

suspended for a break of 15 minutes.

The Court adjourned from 11.05 to 11.20 a.m.

CR 96/13 - 49 -

The PRESIDENT: Please be seated. I now give the floor to Mr. Jack

Chorowsky.

Mr. CHOROWSKY: Thank you Mr. President. Mr. President, Members of

the Court, it is my honour and my privilege to appear before you. This

segment of the US presentation will address a number of issues relating

to the interpretation of Article 79 of the Rules of Court. I will

demonstrate in this discussion that the US objection possesses an

exclusively preliminary character and that the Court should therefore

rule in this preliminary phase on its substance.

I will also return briefly to a related point first raised by my

colleague, Professor Lowenfeld, regarding the standards which the Court

should employ to determine whether it is properly vested with

jurisdiction in this matter. In the view of the United States, the

Court's jurisdiction obtains only if Iran succeeds in establishing that

its claims are reasonably related to the provisions of the 1955 Treaty

which it has invoked.

I.

The Islamic Republic of Iran has asserted in its Written Submission

that the US objection does not possess an exclusively preliminary

character within the meaning of Article 79. It bases this assertion upon

a fundamental misinterpretation of that Article. Moreover, Iran fails to

identify with specificity those legal and factual components of the us

objection which purportedly render it not exclusively preliminary.

Before refuting Iran's assertions directly and in greater detail, I

would like to take a closer look at the relevant paragraphs of Article

CR 96/13 - 50 -

79, and the circumstances surrounding the original drafting of these

paragraphs which was accomplished, of course, in the 1972 amendments to

the Rules of Court. This is, ta be sure, ground well familiar to the

Court; nonetheless, with the Court's indulgence, I would like ta review

just a bit of this background very briefly to help frame

the US argument.

A.

Prier ta their revision in 1972, the Rules of Court provided that

jurisdictional objections could be sustained, rejected, or joined to the

merits. Paragraph 7 of what is now Article 79, originally enacted as

part of Article 67 in 1972, eliminated the express option of joining an

objection to the merits, providing instead that the Court could declare

that an objection did not possess an exclusively preliminary character.

This change followed criticism of the Court•s earlier practice of

joining objections ta the merits. In 1970, for example, the view was

expressed in the United Nations Sixth Committee that

"it would be useful for the Court ta decide expeditiously on

all questions relating to jurisdiction and ether preliminary
issues which might be raised by the parties. The practice of
reserving decisions on such questions pending consideration of
the merits of the case had many drawbacks and had been sharply

criticized in connection with the Soutb West Africa cases and
the Barcelona Traction case." (Report of the Sixth Committee,
UNGA (25th session, Dec. 1970), UN Doc. A/8238, p. 19.)

Likewise, in 1971, the Sixth Committee reported the view that "the Court

should be encouraged to take a decision on preliminary objections as

quickly as possible and to refrain from joining them to the merits unless

it was strictly essential" (Report of the Sixth Committee, UNGA (26th

session, Dec. 1971), UN Doc. A/8568, p. 21).

CR 96/13 - 51 -

Following these debates, the Rules of Court were revised in 1972.

In the aftermath of the revision, then President of the Court Jiménez de

Aréchaga authored an article discussing the changes that had been made,

and reiterating the views that had been expressed in the Sixth Committee.

He wrote that the increased possibility of the joinder of preliminary

objections "has been criticized in many quarters because by such an

action the Court merely postpones its decision on the matter and the same

question is pleaded twice over" (E. Jiménez de Aréchaga, "The Amendments

to the Rules of Procedure of the International Court of Justice",

American Journal of International Law, vol. 67, p. 14 (1973)). President

de Aréchaga noted that the need for the Court to reach a preliminary

decision on those objections that affect its jurisdiction was advocated

both by experts and States (id. at p. 12).

Paragraph 7, which eliminated the express option of joining a

jurisdictional objection to the merits, was not the only notable change

made to the Rules in 1972. Paragraph 2 established as a foundational

matter that "the preliminary objection shall set out the facts and the

law on which the objection is based, the submissions and a list of

documents in supporti it shall mention any evidence which the party may

desire to produce". And to enable the Court to give due consideration to

jurisdictional objections at a preliminary stage, paragraph 6 established

that the Court "whenever necessary, may request the parties to argue all

questions of law and fact, and to adduce all evidence, which bear on the

issue".

Thus, if one takes paragraphs 2, 6 and 7 together, it is clear that

the Rules contemplate objections of an exclusively preliminary character

that may indeed require the Court's consideration of certain issues of

CR 96/13 - 52 -

law and fact. As Professer Rosenne states in his treatise on Procedure,

the Rules of Court as revised in 1972 "emphasize the Court's desire to

dispose of [preliminary] objections at as early a stage as possible, even

if this involves sorne discussion of the merits" (Sh. Rosenne, Procedure

in the International Court (1983), p. 163). Similarly, President

de Aréchaga wrote in 1973 that paragraph 6 "announces the intention of

pronouncing upon the Court's jurisdiction at the preliminary stage of the

proceedings" (E. Jiménez de Aréchaga, supra, p. 12).

Examined plainly, the intent animating Article 79 is to dispose of

jurisdictional objections preliminarily whenever possible. To facilitate

doing so, the Court is empowered to adjudicate relevant, factual and

legal questions, so long, of course, as such adjudication does not

entangle the Court in the merits of a case.

B.

The crux of the US preliminary objection is that the Islamic

Republic of Iran's Application and Memorial do not present claims that

give rise to a dispute under the 1955 Treaty; as you have heard, it is

our view that the 1955 Treaty does not regulate - and was never intended

to govern the conduct of - military hostilities between the parties. If

the Treaty does not apply to such conduct, then the Court does not have

jurisdiction to hear Iran's claims.

Iran asserts that this objection requires the Court to examine the

conduct that is the subject of its claims. In doing so, Iran contends,

the Court would effectively be treating the merits of the Iranian

Application, and thus it is said that the US jurisdictional objection is

not of an exclusively preliminary character. Indeed, it is Iran's

CR 96/13 - 53 -

position that for a preliminary objection to be exclusively preliminary

in character, it must be "patently independent" of the ether issues in

the case (Islamic Republic of Iran, Observations and Submissions on the

US preliminary objection, p. 73, para. 4.30). Further, Iran has

contended that the question of whether a treaty applies to particular

conduct and therefore vests this Court with jurisdiction will "rarely if

ever" be an exclusively preliminary matter because such inquiries, it is

said, require the consideration of the relevant factual circumstances

(id., p. 71, para. 4.25 (c)).

Iran has failed in its written pleadings to invoke any support for

this narrow, novel, and entirely unjustified construction of Article 79.

Nor could it have marshalled any such authority. The suggestion that an

objection must be "patently independent" of all ether issues in arder to

be considered "exclusively preliminary" is fundamentally inconsistent

with the express terms of Article 79. Paragraph 6 provides that the

Court "whenever necessary, may request the parties to argue all questions

of law and fact, and to adduce all evidence, which bear on the issue".

Thus, Article 79 provides for consideration of various criteria which

bear on the preliminary objection; "patent independence" is not required.

Neither is it true, as Iran has suggested, that any objection which

requires the consideration of any facts bearing on the question of

jurisdiction cannet be considered exclusively preliminary. At a minimum,

those facts that are not disputed are perfectly suitable for

consideration by the Court in ruling on preliminary jurisdictional

objections. Indeed, as I have noted, Article 79 expressly contemplates

CR 96/13 - 54 -

that the Court may consider factual submissions, and adjudicate factual

questions in considering preliminary objections.

It is thus clear that Iran's interpretation of Article 79 is not

faithful to that provision's express terms. Iran's reading would

substantially constrain the Court's ability to dispose of preliminary

objections. It would limit the Court to considering only a narrow class

of the most abstract and most theoretical of objections at the

preliminary stage - a result contrary to both the text and design of

Article 79.

In the view of the United States, the only legitimate reason for the

Court not to rule on the US objection would be if doing so would prejudge

the merits of the case. In fact, consideration of the US jurisdictional

objection would not lead the Court to do so. Such consideration would

not require the Court to adjudicate questions of fact that are in dispute

or questions of law which are not necessary to the resolution of our

jurisdictional objection.

As my colleagues have noted, the US objection is based upon the

undisputed fact that the events in question were part of a series of

hostile engagements involving US and Iranian forces, which occurred

during the course of a major international armed conflict.

This cannat reasonably be disputed and has not been here. We have

not asked the Court to resolve any factual questions which are,

concededly, in dispute and which are at the heart of the merits - for

example, whether Iran was responsible for the attacks on the ships Sea

Isle City and USS Samuel B. Roberts. Iran has not pointed to any other

specifie factual questions which must be resolved to deal with the US

CR 96/13 - 55 -

objection, and none which cause the Court to prejudge the merits of the

case.

Nor does the US jurisdictional objection require the Court to

prejudge questions of law that should be addressed if - and only if -

this case reaches the merits phase. The legal element of our

jurisdictional claim is that the 1955 Treaty was not intended to regulate

the use of force and does not do so. The Court can rule on this issue

without difficulty, and without addressing any issues of law relating to

the merits of Iran's Application. Among those legal issues to be

considered at a merits phase would be the proper interpretation and

application of the 1955 Treaty's "essential security interests" clause

contained in Article XX (1), and other legal questions relating to the

law of armed conflict and the exercise of the right to self-defense. The

resolution of these issues is not implicated by the US objection.

The recent decision of the Court in the Genocide case provides a

madel for this proceeding (Application of the Convention on the

Prevention and Punishment of the Crime of Genocide (Bosnia-Herzegovina v.

Yugoslavia), Preliminary Objections, 11 July 1996, General List No. 91).

As in this case, there the claimant asserted that the Court had

jurisdiction by virtue of a treaty, and the responding State asserted

that the treaty was not applicable. Specifically, the respondent Federal

Republic of Yugoslavia argued, inter alia, that the allegations of

genocide contained in Bosnia's Application did not present a dispute

between the parties within the meaning of the Genocide Convention's

compromissory clause, because the acts in question occurred in the

context of an internai conflict, rather than an international conflict.

CR 96/13 - 56 -

The Court considered the Federal Republic of Yugoslavia's

jurisdictional objection appropriate for resolution at the preliminary

stage, just as the Court should do here. The Court cornpared the claims

made to the text of the treaty and found a reasonable connection between

them. When the Court engages in the same analysis in this case, it will

find that Iran's claims are not reasonably connected to the 1955 Treaty.

Similar precedent can be found in the case concerning Certain

Phosphate Lands in Nauru (Nauru v. Australia, Preliminary Objections,

Judgment, I.C.J. Reports ~992, p. 240). In that case, the Republic of

Nauru claimed that Australia was obligated to make reparations for having

depleted phosphate lands during Australia's administration of the Nauru

trusteeship prior toits termination in 1967. Australia, in turn,

submitted a number of preliminary objections, contending, inter alia,

that Nauru authorities waived all claims to the rehabilitation of the

phosphate lands by virtue of a 1967 Agreement, and that the termination

of the Trusteeship by the United Nations in 1967 precluded the Court sorne

25 years later from examining allegations that the Trusteeship had been

breached.

These objections raised a number of questions regarding the

interpretation of the Agreement which terminated the Trusteeship, the

content of discussions leading up to the conclusion of that Agreement,

and the content and meaning of related debates in the United Nations and

in the Trusteeship Council. In short, the resolution of Australia's

objections required the Court to delve into various facts and

circumstances and into the interpretation of an Agreement that would be

the subject of much debate and dispute during the merits phase of the

case. The Court did not respond to these Australian objections by ruling

CR 96/13 - 57 -

that they did not possess an exclusively preliminary character; it did

not defer the consideration of those objections to the merits phase.

Rather, it ruled on their substance. So toc should the Court do in this

case.

We believe the proper approach to resolving preliminary objections

1
was articulated by Judge Petren in his separate opinion in the Court s

1974 Nuclear Tests case. There Judge Petren stated that in exercising

its discretionary power to resolve objections at the preliminary phase

the Court should

1assess the degree of complexity of the preliminary question in
relation to the whole of the questions going to the merits. If

the preliminary question is relatively simple, whereas
consideration of the merits would give rise to lengthy and
complicated proceedings, the Court [he said] should settle the
preliminary question at once. 11 (Nuclear Tests (Australia v.

France), Judgment, I.C.J. Reports 1974, p. 489.)

The case new before the Court is precisely the type of case to which

Judge Petren referred. The jurisdictional question before the Court is

narrow and discrete. By contrast, the merits phase of this case would,

if reached, prove extensive, elaborate, and enormously fact-intensive, in

view of the subject matter and the nature of Iran 1S allegations. Under

Judge Petren 1s analysis, the disproportionate burdens that would attend

the merits phase of this case - burdens on the Parties, and on the Court

- further militate in faveur of the resolution of the US jurisdictional

objection during the preliminary phase.

To summarize, the US objection presents a classic, threshold,

preliminary question: whether the treaty instrument upon which

jurisdiction is predicated governs the conduct in question. To be sure,

one can conceive of a hypothetical case in which this question could be

answered only by engaging in a detailed analysis of facts that lie at the

CR 96/13 - 58 -

heart of the merits of a claim. But this case is not such a case. The

relevant facts that support the US jurisdictional objection are of a

general, obvious character; they are not in dispute, and they would not

be at issue during the Court's consideration of the merits of Iran's

Application.

For these reasons, the US jurisdictional objection clearly manifests

an exclusively preliminary character and should be ruled upon by the

Court.

II.

In ruling upon the US objection, the Court will be required to

determine whether the Iranian Application presents claims that give rise

to a dispute under the l955 Treaty. My colleagues have already addressed

this question in considerable detail.

But one point merits brief emphasis, because it speaks to an

important legal standard not contained in Article 79 which properly

informs the Court's consideration of the US objection.

In considering this objection, the Court must decide as a threshold

matter what constitutes a dispute within the meaning of the l955 Treaty's

compromissory clause. In the view of the United States, a dispute under

the compromissory clause exists if - and only if - the claims submitted

by Iran manifest a reasonable connection to the l955 Treaty. This is the

same approach that was taken by the Court in the Ambatielos case, where

the Court emphasized that "[i]t is not enough for the claimant government

to establish a remote connection between the facts of the claim" and the

instrument upon which jurisdiction was founded (Ambatielos (Greece v.

United Kingdom), Merits, I.C.J. Reports 1953, p. l8).

CR 96/l3 - 59 -

Iran appears to take a very different view - a view which has

significant implications for this Court's jurisdiction and for the

interpretation of compromissory clauses in other contexts. Iran asserts

that a dispute exists under the 1955 Treaty giving rise to the Court's

jurisdiction whenever two parties disagree over the interpretation of its

provisions - no matter the nature of the claim in question, and no matter

how attenuated the claim may be from the Treaty's text. This is not

consistent with the Court's stated position in previous cases that a

reasonable connection must be demonstrated between the claims embodied in

an application to the Court, and the treaty instrument upon which such

claims are founded.

Indeed, to say that the Court's jurisdiction obtains whenever two

States disagree, regardless of the nature of the disagreement and the

content of the relevant treaty provision, would allow any individual

State party to a treaty to manufacture a dispute, and to manufacture

jurisdiction in this Court, by making a manifestly unreasonable claim

under the instrument in question. An unreasonable claim - one that is

patently unsound - would, in a literal sense, lead to a dispute between

the parties, and in turn, under Iran•s theory, to jurisdiction in this

Court. This approach to the interpretation of the 1955 Treaty's

compromissory clause would undermine the principle of consent that forms

the basis of, and imparts legitimacy to, this Court's exercise of

jurisdiction. It would prevent the Court from taking reasonable steps to

conserve its time and its resources, as well as to protect the interests

of other States with claims before the Court.

The interpretative approach advocated by the United States is by no

means novel. The Permanent Court took a similar view, for example, in

CR 96/13 - 60 -

the Mavrommatis Palestine Concessions case (Mavrommatis Palestine

Concessions, P.C.I.J., Series A; No. 2 (1924)). There the United Kingdom

objected to the Permanent Court's exercise of jurisdiction, asserting

that the claim submitted by Greece fell outside the category of disputes

covered by the compromissory clause of the Palestine Mandate. The

Permanent Court did not however resolve this jurisdictional question in

the manner that Iran has suggested - that is, by simply concluding that

the existence of a dispute concerning the interpretation of the Mandate

gave rise to jurisdiction. Rather, the Permanent Court explained in the

following passage that it could assume jurisdiction only if it was

established that the claim submitted indeed fell within the scope of the

relevant clauses of the Mandate:

"The Court, bearing in mind the fact that its

jurisdiction is limited, that it is invariably based on the
consent of the respondent, and only exists in so far as this
consent has been given, cannet content itself with the
provisional conclusion that the dispute falls or not within the
terms of the Mandate. The Court, before giving judgment on the

merits of the case, will satisfy itself that the suit before it
. . . falls to be decided by application of the clauses of the
Mandate. For the Mandatory has only accepted the Court's
jurisdiction for such disputes." (Id. at p. 16.)

In sum and in conclusion, a treaty reflects an understanding between

State parties. And the compromissory clause contained in a treaty

manifests an agreement to adjudicate disputes that relate reasonably to

this understanding. The Court should not endorse the notion that any

claim, no matter its nature, engenders a dispute that gives rise to

jurisdiction. Such a view would only encourage the filing of unjustified

claims; it would encourage the abuse of this Court's processes, and it

would campel respondent States to shoulder the burden of preparing a

defense on the merits to allegations that are not within the Court's

CR 96/13 - 6~ -

jurisdiction. Such a result would diminish the authority and the

credibility of the Court.

Mr. President, Members of the Court, this completes my presentation.

Thank you for your attention. I would ask that the Court invite the

Agent of the United States, Mr. Matheson, to conclude the US argument.

The PRESIDENT: Thank you very much Mr. Chorowsky for your

statement. I now give the floor to Mr. Matheson.

Mr. MATHESON: Mr. President and Members of the Court. You have now

heard the case for upholding the preliminary objection of the United

States. We contend that the issues raised in this preliminary objection

are of an exclusively preliminary character and can be decided by this

Court during this phase of the case. In this regard, the Court does not

have to decide the factual and legal questions that would be at the heart

of the merits phase of this case, if such a phase should be necessary.

First, we do not ask the Court to resolve any disputed questions of

fact. The factual assertions of both Parties confirm that the actions

which form the basis of the complaint of the Islamic Republic of Iran

were combat operations of the military forces of the United States, and

that these operations were part of a series of hostile engagements

between US and Iranian forces that occurred during the course of an

international armed conflict. This, in our view, is a sufficient factual

predicate to uphold the us preliminary objection.

Second, we do not ask the Court to determine which of the Parties

was at fault - in particular, whether the United States was acting in

legitimate self-defense in response to Iranian attacks, whether the

Iranian platforms were legitimate military targets, or whether the US

CR 96/~3 - 62 -

response was necessary and proportionate and consistent with the rules of

warfare. All this would be at issue in a merits phase but is not at

issue in the current phase of the proceedings.

Instead, we have asked the Court to decide, as a preliminary matter,

that Iran's claims have no reasonable connection to the 1955 Treaty. As

Mr. Chorowsky has shown, the lack of such a connection has been

recognized by the Court as a valid ground for preliminary objection. The

Court's jurisprudence clearly establishes that if there is no reasonable

connection between an applicant's claims and the treaty in question, then

the Court should sustain the preliminary objection.

If, as we maintain, there is in fact no reasonable connection in the

present case, then the Court should uphold the preliminary objection of

the United States. Rule 79 was drafted in order to conserve the Court's

resources by avoiding unnecessary merits proceedings. We believe the

present case is a perfect one for the use of Rule 79 to serve this

purpose.

Let me briefly recall our line of reasoning. Professer Lowenfeld

demonstrated that the United States could not be found to have consented,

through this treaty on commercial and consular matters, to the

jurisdiction of the Court over all aspects of friendly US-Iranian

relations, as the Islamic Republic of Iran argues.

In particular, as Professer Lowenfeld pointed out, there is quite

simply no reason at all to believe that the two Parties agreed to subject

controversies about armed conflict to adjudication in this Court pursuant

to the 1955 Treaty, which contains no standards by which to judge such a

controversy.

CR 96/13 - 63 -

Mr. Crook established that none of the specifie provisions of the

1955 Treaty has any reasonable connection with the combat operations of

military forces during the course of an international armed conflict. He

showed that the general, aspirational language of Article I does not

impose legal obligations on the parties, and certainly does not sweep the

law of armed conflict into this commercial treaty. Article IV deals with

the regulation by one party of investments by nationals of the ether

party, and plainly has nothing to do with military operations. Article X

deals with the particulars of maritime commerce between the two

countries, and also clearly does not address military operations.

Finally, Dr. Murphy rebutted the Iran reliance on the Court's

Nicaragua decision. He showed that this decision does not support the

arguments of the Islamic Republic of Iran in the present case. The Court

did not find that it had jurisdiction under the US-Nicaragua FCN Treaty

to deal with Nicaragua's general claim that the United States was acting

in an "unfriendly" manner. Rather, it regarded this as an aspect of a

duty under customary international law that lay outside the

jurisdictional clause of the Treaty. The Court did not accept the

Nicaraguan argument that the US attacks were a violation of the

"equitable treatment" provisions of the FCN Treaty. The Court's decision

on the shipping article of the Nicaragua treaty has no application to the

actions at issue here. Here we are dealing with platforms that have no

relationship to maritime commerce and were in fact being used for

military purposes.

But the clearest proof that Iran's claims have no reasonable

relationship to the 1955 Treaty lies in the fundamental nature of the

claims themselves. The Islamic Republic of Iran is not complaining that

CR 96/13 - 64 -

the United States had violated sorne rule for the protection of trade and

investment, such as one would naturally expect in a treaty of this

character.

The Iranian complaint is in fact that the United States has violated

the rules of the United Nations Charter and customary international law

on the use of force. Its attempt to attach these allegations to the 1955

Treaty are simply a matter of a need to find sorne basis - however

implausible- to bring them within the Court's jurisdiction.

The fundamental implausibility of this attempt was well described by

Professer Lowenfeld. Is it plausible that the United States, after

carefully defining and limiting its acceptance of the Court's

jurisdiction in its 1946 declaration under Article 36 (2) of the Statute

of the Court, would then agree to unconstrained jurisdiction over the

entirety of its friendly relations with just a few of its FCN partners?

Is it plausible that two governments negotiating a fairly standard treaty

on commercial and consular matters would, by implication, and with no

notice whatever to the Senate and the Majlis, radically expand the scope

of the treaty to encompass not only the conduct of armed hostilities but

also any ether aspect of their relationship that might be deemed to be a

feature of friendly relations?

With respect, we do not believe the governments had any such

intention. We do not believe that the 1955 Treaty produces any such

result. We believe there is no reasonable connection between that Treaty

and the claims brought before the Court in this case.

We therefore believe that the Court should uphold the preliminary

objection of the United States in this proceeding. Accordingly, we

CR 96/13 - 65 -

maintain the formal Submission set forth on page 54 of the US preliminary

objection.

Mr. President, this concludes the initial argument of the United

States. As always, we are very grateful for the attention and

consideration given by the Court to our presentations. We would of

course be happy to respond to any qUestions which any Member of the Court

might wish to pose to us. Thank you, Sir.

The PRESIDENT: Thank you very much Mr. Matheson for your statement.

That concludes the first round of the oral argument of the United States

of America. The Court will now adjourn and the hearing will resume on

Thursday morning at 10.00 a.m. when the Islamic Republic of Iran will

make its opening statements. Thank you.

The Court rose at ~2 p.m.

CR 96/13

Document Long Title

Public sitting held on Monday 17 September 1996, at 9.30 a.m., at the Peace Palace, President Bedjaoui presiding

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