A new specialty has emerged within the field of international litigation—the prosecution and defense of claims against the Government of Iran. In late 1978, as the days of the Shah appeared to be numbered, companies that had caused standby letters of credit to be established on their behalf in favor of Iranian governmental entities, became uneasy over possible abuses of rights granted by those instruments through unjustified demands for payment. Thereupon began our personal involvement with litigation involving Iran. It has continued to the present, involving, initially, suits to obtain prejudgment attachments in this country and abroad and, thereafter, arbitration proceedings before the Iran-United States Claims Tribunal in The Hague, which continues to hear cases against Iran.

Beginning in August of 1990, lawyers who had been involved in Iranian litigation must have experienced vivid sensations of déjà vu after President Bush imposed economic sanctions against Iraq (and Kuwait) in almost the same way as President Carter had imposed a freeze on Iranian assets in November 1979. What is the likelihood that claims based on the harm done recently by Iraq can be pursued in a manner which will lead to the recovery of damages? This question does not have a definitive answer.

It became clear, shortly after the onset of the Iraq-Kuwait crisis, that there is an important difference between potential claims against Iraq and the cases which were commenced in the courts of this country against Iran after the taking of the hostages in the U.S. embassy in Tehran in November 1979. That difference is the extent of blocked funds in the United States. In 1979, more than $10 billion in Iranian bank deposits and gold holdings were in this country. In contrast, frozen Iraqi assets in the United States today have been estimated to have a value of between $1 billion and $1.5 billion.

Perhaps the most important difference between claims against Iran more than a decade ago and claims against Iraq today is that Iranian claims were initially a bilateral affair—between the United States and Iran. The Iran-United States Claims Tribunal was a by-product of the January 20, 1981, release of the embassy hostages. Although citizens of many other countries besides the United States suffered losses in the Iranian Revolution, as the result of expropriation of property and businesses and breaches of contracts, only American citizens ended up being able to have their cases heard in a tribunal in The Hague, whose awards are funded primarily by Iranian assets previously frozen in the United States.