Source: https://www.trans-lex.org/109000/_/van-hof-jacomijn-j-commentary-on-the-uncitral-arbitration-rules-the-hague-1991/
Timestamp: 2019-04-21 00:59:19+00:00

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Document-Id: 109000, Please cite as: "https://www.trans-lex.org/109000"
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The rationale for creating this special category is the distinction between awards where the Tribunal applies, international law without any reference to national law and awards where the possibility of applying national law has been referred to but is expressly rejected. Transnational contracts, especially those involving state parties, may well be decided under international law - particularly if parties agree to this. This type of awards therefore does not cause as many Problems as those cases242 where the parties probably intended national law to apply, but although the Tribunal seems to have recognized this wish, perhaps discussed private international law rules, and even selected a national law, it subsequently rejected this law. In these cases, the Tribunal, somewhat like a deus ex machina, sometimes applies a international law/general principles of law.
In Gould Marketing v. Ministry of Defence187 , the Tribunal discussed the case of termination of a contract as a result of frustration due to the force majeure conditions in Iran. The contract provided for the application of California law. The Tribunal stated however, that "under American law, as under English law since 1943 the general principle applied to equitably allocate such consequences of frustration of contract is that amounts due under the contract are to be proportioned to the extent the contract was performed". Although the Tribunal did not use the term "reject" in this case, it clearly acknowledged the presence of a choice of law provision but decided the case on the basis of general principles.
The same thought occurs when reading Alan Craig v. Ministry of Energy.190 This case concerned an alleged nonpayment due under an engineering contract which that appeared to be governed by Iranian law. The Tribunal determined the contract was valid "even" under Iranian law and then had to decide if Art. 740 of the Code of Civil Procedure of Iran, a one-year statute of limitation, would apply. It decided that municipal Statutes of limitation are not binding on international tribunals, although such periods may be taken into account when determining the effect of an unreasonable delay in pursuing a claim.191 Bellet argues that this holding clearly rejects national law.192 Bellet, as a continental lawyer, however, based his opinion on the presumption that the issue of limitation is properly characterized as an issue of substantive law (which, for example, is the opinion expressed in the European Convention on Obligations).193 However, in the Anglo-Saxon tradition, one characterizes the issue as procedural, as Westberg appears to do.194 Consequently, the holding of the Tribunal may be seen as a mere244 application of the rule that a tribunal applies its own procedural rules - in this case the CSD and the Tribunal Rules.
In other cases, the Tribunal did not overrule the applicable law by referring to general principles, but rather by referring to the provisions of the contract, or by merely referring to what it considered reasonable or fair. For instance, in Bendix Corp. v. Iran204 , the Claimant argued that New York law applied, under which it245 was entitled to request assurance of performance when reasonable grounds for insecurity arise. Although the Tribunal referred to the UCC, which forma a part of New York law, and might thus be considered as applying New Yak law to some extent, the Tribunal stated that "it need not reach the question of the applicability of New York law" and dismissed the claim for lack of proof (of the reasonable grounds for insecurity).
In Iran National Airlines Co. v. United States, Case B12205 , the parties were divided on the issue of the applicable law. It is interesting to note that, even though this might be considered a claim which should be determined under international law, neither of the parties so argued, nor did the Tribunal consider international law when it determined the law applicable to the merits.206 The Claimant sought recovery of unpaid invoices for airline tickets issued to U.S. Navy Officials. The Respondent argued that U.S. law applied because the tickets were based on a "Government Travel Request", which created a contract between the relevant U.S. Agency and the carrier subject to U.S. law. The Claimant on the other hand denied that this Request created a contract and argued instead that the airline tickets consulted the contract. In support, it referred to the IATA Regulations and Conventions such as the Warsaw Convention and argued that Iranian law governed the contract. Unfortunately, the Tribunal held that there was no need to refer to any applicable law; instead, the practice of the parties and the relevant provisions of the contract "formed by the GTR and the passenger ticket" (emphasis added), including the terms and conditions contained in both, were sufficient. Only if those terms were inconsistent or incomplete, which it did not find, wild it have considered a question of the applicable law.
180 Award No. 99-245-2, 4 Iran-U.S. C.T.R. at 267-268.
183 Bellet, Foreword at 674. It is noteworthy that Bellet was the Chairman of the Chamber that decided this case.
184 Jones, Private Rights at 52.
185 Stewart, Developments 1983-1984 at 712-713.
186 Hanessian, General Principles of Law at 329-330.
187 Award No. 136-49/50-2, 6 Iran-U.S. C.T.R. at 274-275.
188 Award No. 176-255-3, 8 Iran-U.S. C.T.R at 160-162.
189 The reference in this case to Iranian law only seems to complicate the reasoning. If the issue of permissible evidence is not governed by the lex causae, what is the use in determining it? It would make more sense to characterize the matter first and then to determine which law applies. On the other hand, it is not unusual to give an alternative reasoning as additional support for a conclusion.
190 Award No. 71-346-3, 3 Iran-U.S. C.T.R. at 287.
191 Ibid. See also Harnischfeger Corp. v. Ministry of Energy, Award No. P 144-180-3, 7 Iran-U.S. C.T.R. at 116.
192 Bellet, Foreword at 674. See also Iran National Airlines Co. v. United States, Case B12, Award No. 336-B12-2, In Iran-U.S. C.T.R. at 231 (holding municipal statutes of limitation are not necessarily binding before international tribunals; however, such periods may be taken into account when determining the effects of an unreasonable delay in pursuing a claim before such a tribunal); Harnischfeger Corp. v. MORT, Award No. P 144-180-3, 8 Iran-U.S. C.T.R. at 116 (holding that "[a]lthough it is not bound by local statutes of limitations, this Tribunal has the discretion to determine whether or not there has been an unreasonable delay in presenting a claim to a competent forum").
193 Art. 7 Convention on the Law Applicable to Contractual Obligations, OJ EC No. L 266/1 (Oct. 9, 1980).
194 Westberg, The Applicable Law Issue in International Business Transactions with Government Parties - Rulings of the Iran-United States Claims Tribunal, ICSID REV., 2 FOREIGN INVESTM. L.J. 473, 481 (1987).
195 Award 333-138-2, 17 Iran-U.S. C.T.R at 189-190.
196 See also Iran National Airlines Co. v. United Stares, Case B12. Award No. 336-B12-2, 17 Iran-U.S. C.T.R. at 231-233.
197 Award No. ITL 60-B1-FT, 10 Iran-U.S. C.T.R, at 216. See also Carolina Brass, Inc. v. Aryan Shipping Lines, Award No. 252-10035-2, 12 Iran-U.S. C.T.R. at 143-145; Iran National Airlines Co. v. United States, Case B9, Award No. 335-B9-2, 17 Iran-U.S. C.T.R. at 216-217. See also infra para. 4.3.4.2 (regarding the Tribunal's interpretation of the general principle of pacta sunt servanda).
198 Crook. Applicable law at 288-292.
199 Award No. 55-165-1, 3 Iran-U.S. C.T.R. at 54; id at 58 (Holtzmann, concurring).
200 Award No. ITL 41-48-3, 6 Iran-U.S. C.T.R. at 90.
201 6 Iran-U.S. C.T.R. at 97-100 (Mosk, concurring and dissenting).
202 Award No. 275-12783-3, 13 Iran-U.S. C.T.R at 268-269.
203 See also infra para. 4.3.4.2.
204 Award No. 369-208-2, 18 Iran-U.S. C.T.R at 361 n.10.
205 Award No. 336-B12-2, 17 Iran-U.S. C.T.R. at 230-231.
206 But see Iran v. United States, Case B1, Award No. ITL 60-B1-FT, 10 Iran-U.S. C.T.R. at 216-217. In this case, Iran had argued that the sales contract should be considered as an international agreement subject to international law, and the U.S., on the other hand, had argued that U.S. law applied because the case concerned a commercial contract. Unfortunately, the Tribunal did not decide this issue, which it considered unnecessary at the Interlocutary award stage.
207 Award No. 298-317-1, 14 Iran-U.S. C.T.R at 228-230.
208 See supra para 4.3.4.1 a. (regarding the law applicable to the transfer of shares, namely the law of the place where the shams where issued). Mostafavi in his dissenting opinion also referred to the principle of law applicable to shares (which the Tribunal indeed applied subsequently in Sedco), but he, too, failed to distinguish between substantive and procedural aspects, as he argued Art. 1287 Iranian CC had not been complied with. See 14 Iran-U.S. C.T.R. at 244-150.
209 This rule, known as that of locus regit actum, is well established. See, e.g., Art. 9,1 of the European Convention on the Law Applicable to Contractual Obligations, OJ EC L. 266/1 (Oct. 9, 1980).
210 Award No. 201-174-1, 9 Iran-U.S. C.T.R. at 326-333.
213 Brower, in his dissenting opinion to International Systems & Contracts Corp. v. Iran, Award No. 256-439-2, 12 Iran-U.S. C.T.R. at 273, states that the Award correctly implies that in determining the Tribunals jurisdiction in light of the question of the ownership of the claim, both sources of law, international as well as municipal, should be taken into account. This case should be distinguished from Housing and Urban Services, however, because in International Systems the question of the boundaries of the general jurisdiction of the Tribunal was considered to be governed by international law (understandable because of its basis in the CSD), and the question of ownership rights in the particular case was considered to be governed entirely by municipal law. In Housing and Urban Services, the Tribunal determined that with respect the issue of locus standi in the particular case, municipal law was only the relevant consideration, and consequently, it considered international law.
214 See also, Crook, Applicable Law at 298 (stating that "the Tribunal has treated numerous doctrines as general principles, usually without detailed explanation of their underpinnings. Most are simple and familiar to international commerce and to many legal systems. Nevertheless, the Tribunals jurisprudence also shows the temptations general principles can offer to arbitrators facing difficult and sensible issues").

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