The Iran–United States Claims Tribunal (IUSCT) is an international arbitral tribunal established under the Algiers Accords, an agreement between the United States and Iran mediated by Algeria and formalized through two declarations issued on January 19, 1981. The tribunal was created to address disputes between the two countries stemming from the 1979–1981 Iran hostage crisis and related incidents involving U.S. embassy staff in Tehran.[1][2]
Background
The tribunal's establishment is rooted in historical tensions between the United States and Iran. These tensions were exacerbated by the 1953 U.S.-backed coup that overthrew the democratically elected government of Mohammad Mossadegh, followed by Iran's demand for the return of assets taken by the Shah after the 1979 Iranian Revolution. The U.S. refusal to comply with these demands fueled anti-American sentiment in Iran.
On November 4, 1979, a group of Iranian university students stormed the U.S. embassy in Tehran, taking 52 American employees hostage for 444 days in an event known as the Iran hostage crisis.[3] The hostage-takers demanded the extradition of the Shah in exchange for the hostages' release. In response, the U.S. froze Iranian assets, imposed sanctions, and authorized the seizure of Iranian property within its jurisdiction.
To resolve the crisis, Algeria facilitated negotiations, leading to the Algiers Accords. This agreement mandated the release of the hostages and the establishment of an arbitral tribunal to resolve claims arising from the crisis.
Establishment and operations
The IUSCT, headquartered in The Hague, Netherlands, is composed of nine members: three appointed by Iran, three by the United States, and three neutral arbitrators selected by the parties' appointees. The tribunal began operations on July 1, 1981, and initially operated from the Peace Palace before moving to its permanent premises in The Hague.
The tribunal adjudicates claims in accordance with modified UNCITRAL Arbitration Rules. Its jurisdiction includes:
Claims by U.S. nationals against Iran and by Iranian nationals against the United States involving debts, contracts, and property rights.
Official claims between the two governments concerning the purchase and sale of goods and services.
Disputes over the interpretation or implementation of the Algiers Accords.
Jurisprudence and legacy
The tribunal closed to new private claims on January 19, 1982, after receiving over 4,700 submissions. It has ordered payments exceeding $3.5 billion, with approximately $2.5 billion awarded to U.S. nationals and over $1 billion to Iran.[4][5] As of 2014, all private claims had been resolved, though some intergovernmental disputes remain pending.[6][7]
The IUSCT has been described as “the most significant arbitral body in history”[8] due to its influence on international arbitration, particularly in the fields of investor-state arbitration and state responsibility. Its rulings are binding on both parties[9] and have served as a model for resolving disputes between nations.[10]
Constitutional validation
The tribunal's legitimacy was upheld by the U.S. Supreme Court in Dames & Moore v. Regan (1981), which affirmed the constitutionality of the Algiers Accords. U.S. President Ronald Reagan, who assumed office the day after the Accords were signed, also affirmed his administration’s commitment to the agreement.[11]
