Jurisdiction of United States Courts to Hear Disputes against the Government of Iran within the Context of the Treaty of Amity, Economic Relations, and Consular Rights

The legal apparatus for protecting foreign investments in a host country is affected, on the one hand, by international law (international treaties, custom, principles of international law and doctrines) and, on the other hand, by domestic laws and political relations. Due to this multifaceted feature, such a legal regime is very complex. When the Treaty of Amity, Economic Relations, and Consular Rights between the United States and Iran was passed, it was not easy to conceive that such treaty could be resorted to in domestic courts against parties of the treaty. McKesson’s dispute against the Islamic Republic of Iran, despite of restrictions expressed in Algiers Accords and other political and legal obstacles, brings the question up as to how the McKesson Corporation could establish jurisdiction in the American courts and how the United States courts issued the verdict against Iran by resorting to the Treaty of Amity and Iran’s law. This article aims to discuss the jurisdiction of domestic courts in the United States to rule on actions of Iran’s government and private right of action against Iran by resorting to the Treaty of Amity and Iran’s law. It also considers obstacles in establishing domestic court jurisdiction based on the sovereign immunity principle and doctrine of foreign States’ acts.