Opening Gambit

Claims arbitration begins

The yellow ribbons have long since disappeared. Most of the 52 former American hostages have picked up their careers and moved ahead with their lives. But the complex deal that won their release four months ago will probably keep lawyers, bankers and diplomats busy for years to come. Last week U.S. and Iranian negotiating teams met in the velvet-lined boardroom of the Palace of Peace in The Hague to; begin carrying out the most controversial feature of that agreement: arbitration of their respective corporate and private financial claims.

Under the terms of the deal, President Carter barred American citizens or companies from suing Iran in U.S. courts. Instead, all American claims were to be submitted to an "arbitration panel" consisting of three Americans, three Iranians and three independent members. The same panel was to process Iran's counterclaims. American claims judged to be valid would be paid out of a special "security account," funded with $1 billion of the estimated $12 billion in Iranian assets that had been frozen in U.S. banks for 14 months.

Of the remaining Iranian assets that were unfrozen, nearly $8 billion was originally delivered to an escrow account in the Bank of England pending release of the hostages. Shortly after the 52 returned home, Iran used part of the money to repay about $3.7 billion in syndicated international loans. Another $1.4 billion went into a second escrow fund to liquidate loans from individual banks. Thus Iran has directly received only about $2.87 billion so far--a paltry sum compared with the $24 billion "ransom" that Tehran's revolutionary regime had originally demanded. In addition, some $2.3 billion in Iranian assets remains in U.S. banks pending court decisions concerning the numerous attachments on these funds. This money might ultimately be used to satisfy American claims.

Last week's arbitration proceedings began at a snail's pace. The first order of business was to choose the panel's three neutral members. Led by Lawyer and veteran Negotiator George Aldrich, the U.S. team put forward several names. But the Iranian delegates, led by Spokesman Seyyed Hossein Enayat, initially made no suggestions at all; thus the selection process seemed certain to continue into this week. Iranian foot dragging only complicated an already knotty set of problems. For one thing, there is a staggering total of more than 2,000 American claims to process. Another hitch: many U.S. claimants are threatening to challenge the constitutionality of Carter's order barring suits against Iran. Until the Supreme Court rules on that question, the funds that Iran still has in U.S. banks will remain tied up. International efforts to untangle all these snarls, U.S. Negotiator Aldrich predicted, "will likely last for years."

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