The Iran-United States Claims Tribunal is the largest international arbitration project in modern legal history. Established in 1981 to resolve claims by Americans against Iran, by Iranians against the United States, and by the two governments against each other, the Tribunal has now issued over 300 awards, with a total value of more than $1 billion. Many of the cases involve claims by U.S. companies against Iran or entities controlled by the Iranian Government for damages for breach of contract. In deciding the cases, the Tribunal often has relied, not on the national law of Iran, the United States or a third country, or on public international law, but on what the Tribunal has referred to as “general principles of law.”

This chapter first summarizes Tribunal jurisprudence regarding choice of law, including cases where the Tribunal has applied “general principles,” rather than national law stipulated by the parties or required by conflicts of law rules. The chapter then reviews the sources of the Tribunal’s general principles: public international law, comparative law and the “law merchant” or lex mercatoria, increasingly applied in Europe but still unfamiliar to many American lawyers. Finally, the companies can and should in the future refer in their contracts with foreign entities to “general principles of law.”