Problems with the Jurisprudence of the Iran-US Claims Tribunal on Indirect Expropriation

Investment tribunals often follow the decisions of the Iran-US Claims Tribunal-a tribunal constituted in the aftermath of Iranian revolution overthrowing the Shah of Iran-for deciding indirect expropriation cases. Likewise there is strong support in academic writings in favour of this jurisprudence. Investment tribunals and scholars have ignored the peculiarities arising from the lex specialis nature and other procedural and substantive problems. The Tribunal developed the 'sole effects doctrine', which does not possess any support in customary or treaty law. The decisions on indirect expropriation were influenced by the residual clause 'other measures affecting property rights'. There are other problems arising due to wide choice of law clause, problems of insufficient reasoning, etc which make these decisions unfit as precedent for investment arbitration.