The Decision of the International Court of Justice in Certain Iranian Assets
Tuesday, April 18, 2023

On 30 March 2023, the International Court of Justice (ICJ) issued its judgment in Islamic Republic of Iran v. United States of America (Certain Iranian Assets), a dispute arising from the United States’ imposition of various legislative and judicial measures against Iran that were alleged to have resulted in the breach of the United States’ obligations under the Treaty of Amity, Economic Relations, and Consular Rights (1955) (the Treaty of Amity). While Certain Iranian Assets has been heralded as a win by both Iran and the United States, its greater impact may be on the evolving landscape of investor-State arbitration claims resulting from the application of sanctions on persons or entities, including most notably in relation to the Russian invasion of Ukraine. Interested host states and foreign investors alike should be keenly aware that this decision is anticipated to have important implications for states that have imposed international sanctions on Russia (or are developing legal mechanisms to provide for the enforcement of foreign judgments or arbitral awards against Russian assets in their jurisdictions) as well as for related disputes. As discussed below, both host states and foreign investors should take proactive action to assess potential risks and protect available rights implicated by the quickly evolving landscape of international investment law amid the current climate of international sanctions against Russia.


As indicated in the Preamble of the Treaty of Amity, Iran and the United States signed this treaty, inter alia, to promote “friendly relations” and to encourage “mutually beneficial trade and investments and closer economic intercourse generally between their peoples” as well as to regulate consular relations.To this end, the Treaty of Amity featured certain substantive obligations for the state parties, including that Iran and the United States:

  1. “[S]hall at all times accord fair and equitable treatment to nationals and companies” of the other state party as well as “to their property and enterprises.”2

  2. "[S]hall refrain from applying unreasonable or discriminatory measures that would impair their legally acquired rights and interests.”3

  3. “[S]hall assure that their lawful contractual rights are afforded effective means of enforcement, in conformity with the applicable laws.”4

  4. Ensure that the property of nationals and companies from one state party in the territory of the other “shall receive the most constant protection and security” and “shall not be taken except for a public purpose, nor shall it be taken without the prompt payment of just compensation.”5

The Treaty of Amity entered into force on 16 June 1957 and remained in force when the United States and Iran cut diplomatic ties in 1980 following the 1979 Iranian Revolution that resulted in the seizure of the US Embassy in Tehran. The Treaty of Amity then continued in force during the following:

  1. The United States’ designation of Iran as a “State Sponsor of Terrorism” in 1984.6

  2. The amendment of the US Foreign Sovereign Immunities Act (FSIA) in 1996 to allow for civil liability for acts of state-sponsored terrorism (further amended and expanded in scope in 2008).7

  3. The enactment of the Terrorism Risk Insurance Act in 2002, allowing for certain enforcement measures for judgments entered under the FSIA amendment.8

  4. US President Barack Obama’s 2012 issuance of Executive Order 13599 blocking all assets of the government of Iran, including the assets of Bank Markazi and other Iranian financial institutions in US territory or “within the possession or control of any United States person, including any foreign branch.”9

  5. The 2012 adoption of the Iran Threat Reduction and Syria Human Rights Act that, inter alia, subjected the assets of Bank Markazi to execution in order to satisfy debts under default judgments against Iran.10

Many default judgments and significant damages judgments against Iran and Iranian state-owned entities followed these legislative and executive measures, and certain assets of Iran and Iranian entities (e.g., the assets of Bank Markazi) either are subject to enforcement proceedings or have been distributed to judgment creditors.11 Iran applied to institute ICJ proceedings on 14 June 2016 seeking,12 inter alia, declarations that the United States had breached the Treaty of Amity and that “Iran and Iranian State-owned companies are entitled to immunity from the jurisdiction of the US courts and in respect of enforcement proceedings” in the United States as well as orders for the United States to comply with its obligations under the Treaty of Amity and to pay reparations to Iran for past violation of the United States’ international legal obligations.13 The United States announced that it was withdrawing from the Treaty of Amity on 3 October 2018.14


One key holding from the ICJ’s March 2023 Judgment in Certain Iranian Assets is that, since Bank Markazi did not constitute a “company” as that term is defined for the purposes of protection under the Treaty of Amity, the ICJ did not have jurisdiction to consider Iran’s claim in relation to what is reportedly “over [US]$1.75bn in frozen assets from Iran’s central bank held in a Citibank account in New York, by far the largest amount claimed back by Tehran.”15 The ICJ did find, however, as follows:

  1. There was no merit in the United States’ defenses based on the “clean hands doctrine,”16 alleged abuse of rights by Iran,17 the argument that the United States’ action falls into an exception in relation to arms trafficking,18 or the argument that Executive Order 13599 was a measure necessary to protect its essential security interests (another exception to the substantive obligations allowed under the Treaty of Amity).19

  2. The United States breached its obligation under Article IV(1) of the Treaty of Amity to “refrain from applying unreasonable . . . measures” that would impair the “legally acquired rights and interests” of Iranian nationals and companies.20

  3. “[T]he United States has violated its obligation to recognize the juridical status of Iranian companies under Article III, paragraph 1” of the Treaty of Amity.21

  4. The United States breached its obligation under Article X(1) of the Treaty of Amity with respect to freedom of commerce and navigation.22

The ICJ concluded that “Iran is entitled to compensation for the injury caused by violations by the United States that have been ascertained by the Court” and that the ICJ will “determine the amount due on the basis of further written pleadings limited to this issue” absent agreement between the United States and Iran on the amount of compensation due within 24 months of the issuance of the judgment.23


Interestingly, Certain Iranian Assets has been hailed as a victory for both sides. The US Department of State highlights the case as a rejection of “the vast majority of Iran’s case under the now-terminated Treaty of Amity” in “a major victory for the United States and victims of Iran’s State-sponsored terrorism.”24 Iran’s Ministry of Foreign Affairs, on the other hand, cites the judgment as “another proof of the Islamic Republic of Iran’s righteousness and the violations by the US government.”25 What is clear for other interested states and foreign investors, however, is that international investment law can be a double-edged sword for states imposing sanctions that may be considered to be contrary to their preexisting obligations in public international law.

The recent legal conversation about Russia’s invasion of Ukraine is understandably centered on such aspects as the proposed creation of an international claims commission to adjudicate claims for compensation26 and the International Criminal Court’s recent issuance of arrest warrants for alleged war crimes against Russian President Vladimir Putin and Commissioner for Children’s Rights in the Office of the President of the Russian Federation Maria Lvova-Belova.27 In time, however, the legal focus will likely broaden to consider related disputes arising in international investment law, whether in the state-to-state or investor-state context. As explained in our alert published last year shortly after the Russian invasion of Ukraine, the targeted economic measures Russia has imposed on foreign investors are likely in the near future to give rise to a number of investor-state disputes against Russia as a host state for foreign investment.

As arbitral awards are issued in the coming years, greater attention will likely shift to the legal mechanisms for enforcement of such arbitral awards against Russia (including perhaps in relation to the assets of Russian state-owned entities). In reality, this conversation has already begun as the European Parliament has recently declared Russia a state sponsor of terrorism and called on “the EU and its member states to put in place the proper legal framework and consider adding Russia to such a list” of state sponsors of terrorism.28 Similarly, last summer, the US Senate introduced Senate Resolution 623, “[a] resolution calling on the Secretary of State to designate the Russian Federation as a state sponsor of terrorism” (although the Biden administration reportedly opposes taking such an action).29 

For states that have imposed international sanctions on Russia or are beginning to consider legal mechanisms to provide for the enforcement of foreign judgments or arbitral awards against Russian assets in their jurisdictions, the ICJ’s judgment in Certain Iranian Assets will serve as a reminder that state-to-state or investor-state disputes may be anticipated to arise where the imposition of sanctions regimes could be seen as breaching state obligations under public international law. Accordingly, host states considering amendments to their regimes for the enforcement of arbitral awards should engage proactively, beginning with a review of their current international investment agreements and applicable obligations in public international law. Such a review may identify critical issues to inform the crafting of appropriate domestic law in this space.

Similarly, foreign investors considering pursuing investor-State disputes arising from the imposition of sanctions in connection with the Russian invasion of Ukraine should evaluate both the current legal landscape and the evolving context for the enforcement of arbitral awards to inform their decision-making processes. Ultimately, the implications of Certain Iranian Sanctions require both host states and foreign investors alike to address potential risks and available rights implicated by the quickly evolving landscape of international investment law at this time of widespread international sanctions against Russia. 


1 Treaty of Amity, Preamble.

Treaty of Amity, Article IV(1).

3 Id.

4 Id.

Treaty of Amity, Article IV(2).


7 See Jurisdictional Immunities of Foreign States, 28 U.S.C. ch. 97,


9 Exec. Order No. 13599, 77 Fed. Reg. 6657 (Feb. 8, 2012),

10 Bank Markazi v Peterson, 578 U.S. 212 (2016).

11 Certain Iranian Assets, ICJ Judgment of 30 March 2023, [30].

12 Id., [1].

13 Certain Iranian Assets, ICJ Application Instituting Proceedings of 14 June 2016, [33].

14 Edward Wong & David E. Sanger, U.S. Withdraws From 1955 Treaty Normalizing Relations With Iran, N.Y. TIMES (Oct. 3, 2018), According to the specific terms of the Treaty, termination is effective only after one year’s prior notice. As a result, the formal United Stated termination date was one year after this announcement.

15 ICJ orders US to pay compensation for freezing Iranian assets, AL JAZEERA (Mar. 30, 2023),

16 Certain Iranian Assets, ICJ Judgment of 30 March 2023, [76] to [84].

17 Id., [85] to [93].

18 Id., [99] to [103]

19 Id., [104] to [109].

20 Treaty of Amity, Article IV(1). See also Certain Iranian Assets, ICJ Judgment of 30 March 2023, [159].

21 Certain Iranian Assets, ICJ Judgment of 30 March 2023, [159].

22 Id., [223].

23 Id., [231].

24 Press Release, U.S. Dep’t of State, Judgment in Certain Iranian Assets Case (Mar. 30, 2023),

25 Islamic Republic of Iran Ministry of Foreign Affs., Iranian Foreign Ministry’s statement about the ruling of the International Court of Justice (Mar. 30, 2023),

26 See, e.g., Chiara Giorgetti, Markiyan Kliuchkovsky & Patrick Pearsall, Launching an International Claims Commission for Ukraine, JUSTSECURITY.ORG (May 20, 2022),

27 Press Release, Int’l Crim. Ct., Situation in Ukraine: ICC judges issue arrest warrants against Vladimir Vladimirovich Putin and Maria Alekseyevna Lvova-Belova (March 17, 2023),

28 Press Release, Eur. Parliament, European Parliament declares Russia to be a state sponsor of terrorism, (Nov. 23, 2022),

29 Alexander Ward, Andrew Desiderio &Lawrence Ukenye, New Senate bill ramps up fight over Russia terrorism label, POLITICO.COM (Sept. 14, 2022),


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