Robert Briner was appointed to the Iran-United States Claims Tribunal in The Hague effective 1 June 1985, by agreement of the Iranian and American Members of the Tribunal. He replaced Willem Riphagen as Chairman of Chamber Two and, consequently, as I was the American Member of that Chamber, we became partners in a great arbitral enterprise from then until Robert resigned effective in February 1991. Those were among the busiest years the Tribunal has experienced and certainly were its most productive. During that time, Chamber Two rendered sixty-one arbitrated awards, fiftythree awards on agreed terms, six interlocutory awards and twelve decisions. During the same period, we were both involved in the work of the Full Tribunal of nine arbitrators which, in addition to its administrative functions, rendered three arbitrated partial awards, two awards on agreed terms, four interlocutory awards and five decisions. In addition, Robert became President of the Tribunal in February 1989 and held that post for the two years prior to his resignation.

The Tribunal has been fortunate to have had many exceptional individuals appointed to it over the nearly quarter century of its existence, and Chamber Two has been particularly fortunate in its Chairmen: Pierre Bellet, Willem Riphagen, Robert Briner, Jose Marie Ruda and Krzysztof Skubiszewski. I have enjoyed, and profited from, working with all of them, but I can say with no hesitation that my time with Robert was special, both because of the number and significance of our awards and because of the ease and effectiveness of our cooperation. We came together from quite different backgrounds, his arbitration and private law practice and mine public international law and government service, and I firmly believe that the combination expanded our base and improved our work product.

Quite apart from the numbers of awards and decisions, there were a few that stand out in my memory because of their importance as legal precedents, their complexity, the emotional level involved or just the practical difficulty they [Page32:] presented. I have written elsewhere about them in some detail,1 but I want to recall a few of them here as examples of the experience Robert and I shared in those years.

During the early years of the Tribunal, it was clear to all the Members that one legal issue of great importance for our future awards on expropriation claims would be the standard of compensation. While the American Members believed that customary international law tended to support our view that full compensation was required for all expropriations of private property owned by aliens, we recognized that such a rule could be questioned and that it was firmly rejected by our Iranian colleagues. Helpfully, the 1955 Treaty of Amity between Iran and the United States required, inter alia, 'just compensation', which 'shall represent the full equivalent of the property taken'. Iran contended in some of the early cases heard by the Tribunal that the Treaty was no longer in force and that customary international law had developed so that only 'partial compensation' need be given and that, with respect to corporations, it should be made on the basis of net book value.2 The several chambers reached not fully consistent results in the early awards with respect to the customary law and drew back from deciding the question about the Treaty of Amity.3 The fourth arbitrated award by Chamber Two under Robert's chairmanship involved the taking of a corporation's interest in an Iranian manufacturing plant and gave us the opportunity to set this question to rest by holding that, whether or not the Treaty of Amity remained in force between the two countries at the time of the award, the Treaty was 'clearly applicable to the investment at issue in this case at the time the claim arose'.4 Thus, it was a relevant source of law for these expropriation claims. This decision was followed in virtually all subsequent Tribunal awards dealing with expropriation.

Among the unusual provisions of the Algiers Accords that established the Tribunal was a provision in Article VII, paragraph 2, of the Claims Settlement Declaration that gave the Tribunal jurisdiction over claims owned indirectly by the nationals of either State through ownership interests in a corporation that were sufficient at the time the claims arose to control that corporation, [Page33:]provided that the corporation itself was not eligible to claim under the Agreement. United States nationals filed a number of such claims based on their ownership interests in Iranian or third-country corporations. The first decision by the Tribunal awarding compensation under that clause limited the compensation to the ownership percentage of the claimants.5 Several months later, Chamber Two decided a similar claim in the Harza case and also limited recovery to the ownership percentage of the claimants.6 However, we suggested that a different result might be appropriate in a case where the claimants proved that they had a legal obligation to pay any recovery to the corporation, but, in the only case where such an obligation was proved, the claim failed on the merits.7 In its award in Harza, Chamber Two also accepted counterclaims that arose out of the same subject matter as the claims, even though claims against a corporation may not normally be asserted against shareholders. However, as those claims failed on the merits, it did not need to decide whether they could be a basis for more than a set-off.8 One interlocutory award where Robert and I may have gone astray involved the Tribunal's jurisdiction over counterclaims arising out of contracts between the parties that were different from the contracts on which the claims were based. The Tribunal does not have jurisdiction over claims by either Iran or the United States against natural or juridical persons except as counterclaims to claims brought by nationals of either State against the other State. The Tribunal's jurisdiction over such counterclaims is limited by Article II, paragraph 1 of the Claims Settlement Declaration to 'any counterclaim which arises out of the same contract, transaction or occurrence that constitutes the subject matter of that national's claim . . .'. Such counterclaims were made by the Iranian Air Force against Westinghouse in a case in Chamber Two. Westinghouse had brought claims based on several contracts involving parts of a project to design and supply equipment for an integrated electronics depot for the maintenance of various electronic systems used by the Air Force. The Air Force argued that all of the depot contracts with Westinghouse arose out of the same transaction or occurrence, and we decided to have a preliminary hearing on the question of jurisdiction over those counterclaims. [Page34:]

Several years earlier, Chamber Three of the Tribunal had confronted the same question in a number of cases and had reached apparently inconsistent decisions.9 In all but one case, it held that counterclaims based on different contracts from those on which the claims were based were not within its jurisdiction. In the one exception, American Bell, it found that the contracts were so closely linked that they were a single transaction, because they were successive contracts on the same project, and because it was foreseen that all these contracts would be with the same party. In Chamber Two's case, Westinghouse,10 we adopted the American Bell precedent, even though the Air Force had not been contractually obligated to offer the contracts on which the counterclaims were based to Westinghouse. Perhaps the key sentence in our interlocutory award was the following: 'As a practical matter, even though the Parties agreed to conclude separate contracts, the Respondent had no reasonable opportunity to obtain the desired services from a competitor of the Claimant.' A significant equitable consideration was the evident unfairness of allowing the claimant to use the Tribunal to claim only on those depot contracts on which it was owed money while prohibiting the respondent from raising, in response, claims on other depot contracts where it believed the claimant owed it money. On the other hand, the fact remained that the Air Force was not legally committed to conclude with the claimant the contracts on which it based these counterclaims and that the contracts were ostensibly separate transactions. Perhaps my second thoughts about the wisdom of our decision on this issue result from subsequent experience. Long alter Robert had left the Tribunal, his successors found it impossible to decide in ways I considered fair the rights of the two parties on those contracts introduced into the proceedings solely by counterclaims.11

Robert's experience with commercial contracts played a part, I believe, in the consistency with which Chamber Two gave great weight in its interpretation [Page35:] of contracts to the conduct of the parties. See, for example the Combustion Engineering Award12 where, at 112, the Tribunal accepted a claim supported by the contemporaneous conduct of the parties, where, at 204, it rejected a defence of defective contractual performance in view of the absence of contemporaneous complaints, and where, at 208, it denied an invoice claim because the claimant had not included those invoices on a contemporaneous list of unpaid invoices. Another example would be the Collins Systems Award13 where we rejected a defence of payment of an invoice in view of the failure of the Navy to make a contemporaneous objection to the inclusion of that invoice in a 1979 list of unpaid invoices. Many other examples could be cited.

Clearly one of the most important precedents established by Chamber Two under Robert's chairmanship-and certainly the most objectionable to Iran-was the Chamber's arbitrated award in the Phillips Petroleum case.14 The Iranian Revolution brought about the nationalization of the petroleum industry by the new government. That nationalization process had begun in the 1950s but, by 1979 when the Revolution occurred, a large number of non-Iranian petroleum companies, including many American companies, were still present in Iran pursuant to contracts with the National Iranian Oil Company that gave them substantial investment interests.

The first petroleum claims that were decided by the Tribunal were decided by Chamber Three under the chairmanship of the late Michel Virally, an eminent (and very likable) French professor of relatively leftist views, and Chamber Three's decisions were not well received by the claimants or by the other American oil companies with claims pending before the Tribunal.15 Professor Virally believed that the full compensation standard of the Treaty of Amity did [Page36:]not require any compensation for lost profits beyond the date of the judgment, even for unlawful expropriations, nor any compensation for any lost profits at all for lawful expropriations. In my view, he also distorted the evidence in both awards in order to be able to justify the conclusion that both expropriations were lawful. Two years later, when Chamber Two rendered its award in the Phillips case, we stated clearly how and why we disagreed with that part of those Chamber Three decisions. I believe that deserves at least partial quotation here.

109. The Respondents further argue that the taking of property in the present Case was a lawful taking, and that for such a taking, a lesser standard of compensation is required. The Claimants deny that the taking was lawful and further deny that a lesser standard of compensation is applicable to lawful takings. However, the Tribunal need not decide in the present Case whether the taking was unlawful, for instance, as violative of stabilization clauses or for any other reason, because, whatever the relevance of that question as a matter of customary international law, it is irrelevant under the Treaty of Amity. Article IV, paragraph 2, quoted above, provides a single standard, just 'compensation' representing the 'full equivalent of the property taken', which applies to all property taken, regardless of whether that taking was lawful or unlawful. Clearly, as the Amoco International Finance Award, supra, recognizes, that standard applies to takings that are 'lawful' under the Treaty, but the Treaty does not say that any different standard of compensation would be applicable to an 'unlawful' taking. The Treaty states two requirements for any taking, that it be for a public purpose and that 'just compensation', as defined therein, be paid promptly. In the present Case, there is no allegation that the taking, which extended to all petroleum production in Iran, was not for a public purpose, and the Claimant requests no more than 'just compensation' based on the single standard of the Treaty.

110. The Tribunal believes that the lawful/unlawful taking distinction, which in customary international law flows largely from the Case Concerning the Factory at Chorzow (Claim for Indemnity) (Merits), P.C.I.J. Judgment No. 13, Ser. A., No. 17 (28 September 1928), is relevant only to two possible issues: whether restitution of the property can be awarded and whether compensation can be awarded for any increase in the value of the property between the date of taking and the date of the judicial or arbitral decision awarding compensation. The Chorzow decision provides no basis for any assertion that a lawful taking requires less compensation than that which is equal to the value of the property on the date of taking. In the present Case, neither restitution nor compensation for any value other than that on the date of taking is sought by the Claimant, so the Tribunal need not determine whether such remedies would be available with respect to a taking to which the Treaty of Amity applies. [Page37:]

In order to determine the fair market value of Phillips' contractual rights, Chamber Two recognized that all relevant factors would have to be taken into account. In the absence of an active and free market for comparable assets, the Tribunal would have to determine what a buyer of the asset could reasonably have been expected to pay at the time the asset was taken. Thus, the Tribunal had to analyze carefully the revenue-producing potential of the contract over its duration. That analysis necessarily involved deciding the level of production that could reasonably be expected, the costs that could reasonably be expected, the oil prices that a buyer of the contract rights could reasonably have foreseen at that time, and the foreseeable risks. The claimant's evidence included a discounted cash flow ('DCF') analysis. The Chamber decided not to make its own DCF analysis, but rather to treat that analysis as a relevant contribution to the evidence. We stated that conclusion as follows:

113. In the present Case, the property taken is not a manufacturing or processing enterprise, but rather contract rights to continue to exploit natural resources previously discovered pursuant to the contract, and the Tribunal considers the use of the DCF method by the Claimant a relevant contribution to the evidence of the value of the Claimant's contract rights which have been taken by the Respondents. However, the Tribunal agrees that it is not an exclusive method of analysis and that all relevant considerations must be taken into account. As used by the Claimant, with its production and price estimates and a very low discount rate (four and one-half percent), the Tribunal cannot agree that the method has resulted in a proper estimate of market value. There are, for example, risks, such as the risk of reduced future production as a result of national policy changes flowing from the Iranian Revolution, that should be taken into account, even if such risks cannot be quantified with any certainty in the anticipated production or as part of a discount rate. The Tribunal therefore proceeds to its determination of the value of the Claimant's property interest on the date of taking by means of consideration of all relevant circumstances as revealed by the evidence presented in the Case.

114. In this connection, the Tribunal does not intend to make its own DCF analysis with revised components, but rather to determine and identify the extent to which it agrees or disagrees with the estimates of both Parties and their experts concerning all of these elements of valuation.

The Chamber then proceeded to analyze the critical valuation evidence, which related to the available quantity of oil, prospective oil prices, prospective costs of production, and various risks that had to be taken into account. The result was an award of $55 million, plus simple interest at a rate of 10 per cent from the date of taking (29 September 1979). This was slightly more than one-third of the claimant's revised claim, which was for $159,199,000, plus interest and costs. [Page38:]

The Iranian Member of Chamber Two, Seyed K. Khalilian, refused to sign the award, and filed a statement in explanation of his refusal, denying that deliberations had been finished, asserting that the award should have no precedential value as it failed to respect the earlier Amoco International award and as it reflected the Chairman's alleged perspective as a businessman who was anxious to please the oil companies. The statement also purported to disclose deliberations of the Chamber, contrary to the Tribunal Rules. Iran's reaction was certainly robust, as it challenged Robert Briner twice, once in July 1989 and once in September. Both challenges were frivolous, and both were promptly dismissed by Judge Charles Moons, the appointing authority.

Iran also filed an interpretative dispute against the United States, designated Case No. A25, which asked the Full Tribunal to revoke, set aside and annul the Phillips award. No such right of appeal against Tribunal awards existed, but, while waiting for the Full Tribunal to hold a hearing on the matter, Robert, who was then President of the Full Tribunal, quite properly decided not to file the Persian text of the award and to withhold notification of the award to the escrow agent (the Algerian Central Bank). Consequently, by filing A25, Iran gained time to negotiate a settlement of Phillips' claims that took into account Iran's counterclaims that were not within the jurisdiction of our Tribunal. That settlement involved the withdrawal of case A25 and the acceptance of a new award that paid Phillips $92 million.

Iran's rush to settlement with Phillips was not, I suspect, done primarily to get the benefit of those counterclaims, but rather to damage or remove Chamber Two's award as a precedent for the other oil claims that were still pending. While payment pursuant to that award could thereby be prevented, there was, of course, no way to destroy the award as a precedent, as the award existed (if only in English), and everyone knew that two Chambers of the Tribunal had made inconsistent decisions on these vital issues. Perhaps as a result, all of those oil claims were settled by negotiation. Those settlements included the Amoco and Mobil cases in which Chamber Three had issued its partial awards. I have no doubt that Chamber Two's award in the Phillips case levelled the playing field and helped make fair settlements of these substantial and politically sensitive oil claims possible.

Robert Briner's contributions to the Iran-United States Claims Tribunal, as Chairman of Chamber Two and as a Member and President of the Full Tribunal, were of great and positive significance to the success of that Tribunal and to the development of the law of international claims. For me, he made our [Page39:]working together in The Hague a pleasure and a mutual learning experience. Of course, there were a few cases where we disagreed. I remember, in particular, the Otis Elevator16 and Mahmoud17 cases in which I filed vigorous dissenting opinions. But even when we disagreed, we understood each other and worked cooperatively together. Robert's years with us were our busiest and, at the same time, our most satisfying.

1
G.H. Aldrich, The Jurisprudence of the Iran-United States Claims Tribunal (Oxford University Press, 1996).

2
Ibid. at 220.

3
Ibid. at 218-21.

4
Phelps Dodge Corp., et al. and The Islamic Republic of Iran, Award No. 217-99-2 (19 Mar. 1986), reprinted in 10 Iran-US CTR 121.

5
Blount Brothers Corporation and The Government of the Islamic Republic of lran, et al., Award No. 215-52-1 (6 Mar. 1986), reprinted in 10 Iran-US CTR 56 at 64.

6
Richard D. Harza, et al. and The Islamic Republic of Iran, et al., Award No. 232-97-2 (2 May 1986), reprinted in 11 Iran-US CTR 76 at 86-89.

7
SeaCo, Inc. and The Islamic Republic of Iran, et al., Final Award No. 531-260-2 (25 June 1992), reprinted in 28 Iran-US CTR 198.

8
Supra note 6 at 86.

9
R.N. Pomeroy, et al. and The Government of the Islamic Republic of Iran, Award No. 50-40-3 (8 June 1983), reprinted in 2 Iran-US CTR 372; American Bell International Inc. and The Government of the Islamic Republic of lran, et al., Interlocutory Award No. ITL 41-48-3 (11 June 1984), reprinted in 6 Iran-US CTR 74; and Morrison-Knudsen Pacific Limited and The Ministry of Roads and Transportation, et al., Award No. 143-127-3 (13 July 1984), reprinted in 7 Iran-US CTR 54. See also the discussion of these cases, supra note 1 at 113-16.

10
Westinghouse Electric Corporation and The Islamic Republic of Iran, et al., Interlocutory Award No. ITL 67-389-2 (12 Feb. 1987), reprinted in 14 Iran-US CTR 104.

11
See Westinghouse Electric Corporation and The Islamic Republic of Iran Air Force, Final Award No. 579-389-2 (26 Mar. 1997), reprinted in 33 Iran-US CTR 60; and Separate Opinion of George H. Aldrich in Westinghouse Electric Corporation and The Islamic Republic of Iran Air Force, Final Award No. 579-389-2 (26 Mar. 1997), reprinted in 33 Iran-US CTR 195.

12
Combustion Engineering, Inc., et al. and The Islamic Republic of Iran, et al., Partial Award No. 506-308-2 (18 Feb. 1991), reprinted in 26 Iran-US CTR 60.

13
Collins Systems International, Inc. and The Navy of the Islamic Republic of Iran, Award No. 526-43-2 (20 Jan. 1992) at 49, reprinted in 28 Iran-US CTR 21.

14
Phillips Petroleum Company Iran and The Islamic Republic of Iran, et al., Award No. 425-39-2 (29 June 1989), reprinted in 21 Iran-US CTR 79.

15
Amoco International Finance Corporation and The Government of the Islamic Republic of Iran, et al., Partial Award No. 310-56-3 (14 July 1987), reprinted in 15 Iran-US CTR 189; and Mobil Oil Iran Inc., et al. and Government of the Islamic Republic of Iran, et al., Partial Award No. 311-74/76/ 81/150-3 (14 July 1987), reprinted in 16 Iran-US CTR 3. See also Judge Brower's dissenting opinions (Concurring Opinion of Judge Brower in Mobil Oil Iran Inc., et al. and Government of the Islamic Republic of Iran, et al., Partial Award No. 311-74/76/81/150-3 (14 July 1987), reprinted in 16 Iran-US CTR 60), particularly paragraphs 15-20 and 189-209. I feel certain that the fact that those awards were rendered on Bastille Day was merely a coincidence.

16
Otis Elevator Company and The Islamic Republic of Iran, et al., Award No. 304-284-2 (29 Apr. 1987), reprinted in 14 Iran-US CTR 283.

17
Leila Danesh Arfa Mahmoud and The Islamic Republic of Iran, Award No. 204-237-2 (27 Nov.1985), reprinted in 9 Iran-US CTR 350.