Mother of all Dispute Resolution Clauses and the Iran Nuclear Deal

On April 2, 2015 The US and the P5+1 powers agreed to a Joint Comprehensive Plan of Action (JCPOA) regarding the Islamic Republic of Iran’s nuclear program and the US State Department issued a fact sheet purportedly providing the details of such Plan.

A key section of such plan relates to Sanctions and what will happen if it is determined by inspectors that Iran may be cheating or not complying with the Plan. This is what the Plan says will happen:

*A dispute resolution process will be specified, which enables any JCPOA participant, to seek to resolve disagreements about the performance of JCPOA commitments.

*If an issue of significant non-performance cannot be resolved through that process, then all previous UN sanctions could be re-imposed.

Such Dispute Resolution Clause language is nothing new to contract attorneys, divorce attorneys, or business attorneys. Often times attorneys who represent a party who likely intend to violate an agreement or attempt to skirt its limits, insist on a dispute resolution clause in any final agreement, so that there is a buffer between the other litigant and the Courts. By creating such buffer, one may be able to drag out such process so that either the alleged breach becomes moot or tires the other party out in resources that they simply throw in the towel. All alternative dispute resolution attorneys know that if a party wants to, they can drag out the process via delaying the screening of or selection of mediators or arbitrators, making numerous challenges to them, filing numerous motions that need to be adjudicated, and on and on. In the context of the nuclear deal with Iran and a short one year break out time to a bomb, the results can be catastrophic as by the time the dispute resolution process is over or it’s determined that the issue cannot be resolved by such, Iran will already have a nuclear bomb.

In addition, the language which states that UN Sanctions “Could be” re-imposed obviously is very weak. Reading between the lines, most contract and litigation attorneys would opine that the US and P5+1 were desperate to accept a deal, no different than a client who bids against himself in a negotiation rather than insisting on a better counteroffer. Such sends the message that the party is desperate for a deal laying the foundation for a bad deal.

One thing is certain based on these clauses, it would appear that the fact sheet undermines any notion of any kind of puported “snap back” of sanctions when and if Iran violates the Plan.

Stuart D. Meissner Esq.