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Chas. T. Main International, Inc. v. Khuzestan Water & Power Authority
Published online by Cambridge University Press: 02 March 2017
Extract
Claimant, Chas. T. Main International, Inc., filed a claim against respondent, Khuzestan Water & Power Authority, in the Iran-United States Claims Tribunal for amounts allegedly due under a contract for the provision of engineering and construction management services. Claimant contended that an exchange of documents and other conduct of the parties demonstrated the existence of a contractual relationship, despite respondent’s failure to sign a formal written agreement that had been drafted by claimant and allegedly approved by respondent. Respondent sought dismissal of the claim both on jurisdictional grounds and on the merits, contending that no contract existed since the respondent had never signed the formal agreement. In an interlocutory award, Chamber Two held: that respondent’s conduct, including the authorization and ratification of claimant’s services, demonstrated the existence of a contract, and that respondent’s refusal to pay for claimant’s services constituted a compensable breach of that contract. The Chamber further determined that the appointment of experts was necessary to ascertain the value of the services rendered.
- Type
- Judicial Decisions
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- Copyright
- Copyright © American Society of International Law 1984
References
1 Claimant also named as respondent the Ministry of Energy of the Islamic Republic of Iran. The alleged contract, however, was solely with Khuzestan Water & Power Authority.
2 The Iranian arbitrator of Chamber Two, Mr. Shafie Shafeiei, failed to sign the award. Pursuant to Article 32, paragraph 4 of the Tribunal’s rules, Chairman Bellet and Arbitrator Aldrich attached a note to the award, explaining that the Tribunal “cannot permit its work to be frustrated” by virtue of the extended absence of Shafeiei, during which he remained incommunicado. Article 32(4) of the Tribunal’s rules states: “Where there are three arbitrators and one of them fails to sign, the award shall state the reason for the absence of the signature.”
3 The parties were requested to select the experts jointly by Oct. 1, 1983, with the understanding that if no agreement was reached by that date, the Chamber would appoint the experts. Also, in accordance with Tribunal Rule 41(2), the Chamber ordered claimant to deposit $25,000 with the Tribunal by Sept. 27, 1983 as an advance for the costs of expert advice. Rule 41(2) states: “The arbitral tribunal may request each arbitrating party to deposit an amount determined by it as advances for the costs. . . .”
4 Article VII(l) defines a U.S. national as
a corporation or other legal entity which is organized under the laws of . . . the United • States or any of its states or territories, the District of Columbia or the Commonwealth of Puerto Rico, if, collectively, natural persons who are citizens of such country hold, directly or indirectly, an interest in such corporation or entity equivalent to fifty per cent or more of its capital stock.
5 These evidentiary standards are consistent with prior decisions by Chamber One with respect to requirements for proving U.S. nationality. See Flexi-Van Leasing Inc. v. Islamic Republic of Iran, Claim No. 36, Order of Dec. 20, 1982 (Chamber One), and General Motors Corp. v. Islamic Republic of Iran, Claim No. 94, Order of Jan. 21, 1983 (Chamber One), summarized in 77 AJIL 642 (1983).
6 Article VII(3) defines “Iran” as “the Government of Iran, any political subdivision of Iran, and any agency, instrumentality, or entity controlled by the Government of Iran or any political subdivision thereof.”
7 Article 11(1) of the Claims Settlement Agreement excludes from the Tribunal’s jurisdiction claims “arising under a binding contract between the parties specifically providing that any disputes thereunder shall be within the sole jurisdiction of the competent Iranian courts.” Apparently, though it failed to state so explicitly, the Chamber believed that because the forum selection clause in the draft contract did not provide for the “sole” jurisdiction of Iranian courts, it did not bar the Tribunal’s jurisdiction. See Gibbs & Hill, Inc. v. Tavanir, ITL 1–6–FT (Nov. 5, 1982) (Full Tribunal).
8 In support of this conclusion, the Chamber cited both U.S. and Iranian Law. See Mass. Gen. Laws ch. 108A, §7; the Commercial Code of Iran, Art. 119; the Civil Code of Iran, Art. 575.
9 Request for Cancellation of Interlocutory Award, dated 27 July 1983 (Aug. 24, 1983).