HI5015 Case Study: Anglo-Iranian Oil Co. & Legal Aspects of Trade Law

This case study examines the Anglo-Iranian Oil Co. case, a significant public international law dispute between the UK and Iran concerning the nationalization of Iranian oil. The analysis follows the IRAC format, detailing the background, facts, and issues surrounding the case, including the UK's claim that Iran's nationalization act of 1951 violated a prior agreement. The study explores the ICJ's involvement, its temporary ruling, and the subsequent actions taken by both the UK and Iran, including the UK's complaint to the Security Council and eventual intervention with US assistance. It also draws parallels with the Greece v. UK (Ambatielos) case to highlight the importance of adhering to international court rulings and treaties. The conclusion emphasizes the necessity of compliance with international laws and regulations to maintain stability and foster effective international trade relations.

HI5015 Legal Aspects of
International Trade &
Enterprise

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Issues ...........................................................................................................................................4
Rules............................................................................................................................................6
Analysis........................................................................................................................................7
Conclusion...................................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Legal aspects include the different legal requirement which the company has to comply
with in order to work in better and effective manner. the reason underlying this fact is that these
legal requirement involves all the different regulations which are being governed by the
government of the country. The current analysis will be undertaken in the analysis of the case of
Anglo- Iranian Oil Co. The present report will analyse the case with help of the IRAC format
which includes analysing the issues, then comply with rules and regulation and the analysing the
case and concluding the findings. This method will be applied in the case of Anglo- Iranian Oil
co. in order to evaluate the case critically.
MAIN BODY
Issues
Background of the dispute
The present case was United Kingdom v Iran [1952] also known as the Anglo- Iranian
Oil Co. case. This was a public international law dispute between UK and Iran and this case was
relating to nationalisation of the Iran’s oil which was a large part being controlled by UK since
20th century. The Anglo- Iranian Oil Company which was formerly known as Anglo- Persian oil
company and currently it is known as BP. this company was drilling for the oil in Iran since the
time 1913. also in the year 1908, a British venture capitalise had discovered oil within the
southern Iran part. in the early 20th century the ruling government was Pahlavi government which
made different concession with British (Anglo-Iranian Oil Co. (United Kingdom v. Iran), 2022).
This concession provided the UK with more control over different element within the Iranian
economy. In the year 1901 D’Arcy Concession was the earliest out of all the oil concession.
further in the year 1933, another concession made was to extend the terms relating to D’Arcy
concession which was made by 32 years from the time since 1961 to 1993. this concession also
worked upon altering the way how revenue was allocated. Thereafter the concession stokes the
discontent within Iran.
Facts of the cases
UK alleged that the Iranian oil nationalisation act of 1951 was a counter to the
convention being agreed by the Anglo Persian Oil Company now known as BP and Iran within
the year 1933 (Allen, Kraakman and Khanna, 2021). This act granted the Anglo- Iranian
company with the licence for 60 years for mining oil within the area of 260000 square km in Iran

and against that they have to pay a percentage of royalty as well. further in the year 1951 26th
May, UK took Iran to the ICJ and there they demanded for 1933 agreement to be upheld and Iran
has to pay for the damages and different compensation for disrupting within the UK incorporated
profits. with respect to this case, the ICJ issued a temporary ruling and also proposed to supervise
the operations of the oil company by the board of 5 members (Ağır and Artunç, 2021). These
five members involves two from each state and the fifth from the third till the time this legal
problem is not be solved. in this case, UK accepted and the Iran declined arguing that the ICJ has
no jurisdiction over the case being lodged. after this, UK also lodged the formal complaint with
the Security Council wherein they claimed that Iran is jeopardising the world peace. this is being
done by rejecting the temporary ruling out of the hand but in this case UK was unable to gain
more votes.
Within this case, there were number of different judges being involved from different
nationality and their consent was also taken for the final decision to be taken. There were total of
15 judges being involved from different nationality and position and their opinion were different.
from the 15 judges 1 had said nothing and out of remaining 14, 5 dissented and the remaining 9
judges were in favour of the decision.
After the judgement that Iran has conceded to the ICJ jurisdiction and in this case the
involving treaties agree upon the fact after 1932. this was because of the reason that only treaty
cited by UK after that the deal was between Iran and other foreign company and not the UK.
even despite the outcome of the case, the British government decided to reclaim the control
which they had over the oil fields of Iran. This was done in order to signal other countries that
any nationalisation effort will result in retaliation by the countries. In addition to this the US
government also started boycotting oil against Iran for cutting off the petroleum profits and to
weaken the government of Iran. after this boycott the value of rial fell by around 45 %. After that
the UK’s intelligence service that is MU6 also requested assistance from the US which had a
newly formed CIA that is Central Intelligence Agency (Fenwick and Wrbka, 2018). Thus, with
the combination of both these Mosaddeq was overthrown and this was followed by different
types of disruptions being faced. after sometime Mohammad Reza Shah has returned to Iran and
also improved the authority which is backed by the US government and was also allowed to mix
the different types of the foreign companies as well for controlling the prices and production
being prevailing in the oil sector for almost 20 years ahead.

Rules
Moreover, with help of this case it is clear that for the government as well it is necessary
that proper compliance with the rules is being ensured such that the working is being improved.
in case the government is not following the rules and regulation then in that case it will create a
negative impact over the working of the whole country and people will also not following the
laws and regulations. in the present case the Iran might have complied with the jurisdiction being
provided by ISJ (Munawar and Saputra, 2021). in the similar case that is Greece v UK [1952]
also known as the Ambatielos case is a type of the public international law case. within this case
as well the concerning state responsibility was to present the economic damages. with this case,
the international court of justice stated that UK had to enter in arbitration with the terms of treaty
which has been signed with Greece. within this case the ICJ was having the jurisdiction for
hearing the deciding on the fact that whether there is substantive dispute itself or not.
The case included the fact that there was a Greek ship owner that is Nicolas Eustache
Ambatielos who has commissioned total of 9 ships for an agreed price and date of delivery. But
the British government missed each and every deadline and this resulted in huge financial loss.
This in turn resulted to the fact that there was reseizure of the ships which are already being
completed and the company was unable to resolve the matter within UK court as well (DiMatteo,
2021). further on 9th April 1952 Greece took the UK to the international Court of Justice and the
claim made was that the British Board of Trade disregarded the legal protocol of British working
and failed to disclose it to on delivery dates. as a result of this, the British court of appeal
disregarded the British legal protocol relating to fresh evidence.
by referring to this case it can be stated that the decision taken by ICJ in case of Anglo-
Iranian case is also correct. The reason underlying this fact is that when the guidelines provided
by ICJ will not be followed and complied in proper manner then this will be affecting the
working of the company in great manner. Also, by analysing the present case it is clear that
referring to other cases is also very important as this will be improving the working efficiency of
the business and this will improve the working efficiency of the business. Along with this it can
also state that the case laws also assist in developing the working and efficiency of the business
and to work in better and effective working (Davidson and Forsythe, 2020). thus, with this it can
be stated that the rules provide a base that how the working of the company can be improved in
better way and this also affects the working capacity of the company to a great extent. this will

provide a base to the company in complying with the laws and work in better and effective
manner. in case the working will not be assured then this will be affecting the working efficiency
of the business. thus, the following of different rules and regulation being made by the different
regulatory bodies. this will be improving the working efficiency of company and employees
working within the company as well.
Analysis
In this case the ICJ does not have any jurisdiction over the case as it was not the treaty or
the convention that was signed in between Iran and UK as it was present since the 1932 it was
assumed as it was present which was the case of the dispute. The rule that is applicable for this
situation is that the conflicts between the two states over the signed treaties or convention,
corporation cannot be represented by their home state unless the parties which signed the treaty
was between the two states (Alam, 2019). The rule in this case was related to the Article 35
which is the statute, The paragraph 2 of this article explained that each state which has been
recognized the compulsory jurisdiction of the court has the principle right to be able to bring
more than other states which are accepted obligation before the Court by filling an application
instituting proceedings with the court. Factors which has been able to analyse the factors which
helps the and also help the application of the instituting proceeding with the court which allow
the level of preceding. The text declarations which are made under this rule was that the on the
basis of the information which is provided by the depository was that the inclusion or omission
of a declaration of the prejudice to its possible application is not done in the court.
This law of the alleged which was the Iranian oil nationalization act of 1951 was said to
be the counter convention of which was agreed upon by the Anglo-persian Oil Company and
Iran in 1933. This grant was said that the company which has a licence to the mine of oil will
have to return the royalty to the Iran as a given percentage. UK taking over the Iran to the ICJ
demanded that this agreement which was upheld was the factor that damages and compensation
for the disruption of the UK incorporated company's profits (Contreras, 2019). The focus of this
ICJ was to quickly issue a primary rule that the supervision of the operations of the oil company
is to board of the 5, two from each of the state and the third from the legal questions which had
been resolved. The acceptance of the Iran was that with the help of matter being the principle of

argument the jurisdiction over this case was that it was lodged as a formal complaint towards the
security council.
Greece vs UK 1952 this case was very helpful for the reference of the rule that can be
used for referring to this case. In this case law Nicolas Ambatielos, a Greek shipowner, was in
contract with the phase of shops from the UK government. However, it was later that the claim
suffered damage through the failure of the government. The case was that the government carry
out the terms of the contract and the results for the certain judgements which were given against
him the English courts (Ambatielos, (Greece v. United Kingdom) , 2022). The circumstances are
said to be involved with the violation of the international law. Hence, the Greece government
took up the case and its national was able to claim that the UK was under the duty of dispute that
was the arbitration of the accordance with the treaties. In this case the UK government was then
help in the jurisdiction of the international count and had to deal with the merits of the
Ambatielos claim.
As per the application of the oldest form of government in the UK the laws regarding the
use of any copyright, patent and trademark may make the business liable for paying Royalty. The
results of this case was affected due to the facts that the UK government was able to determine
the ways in which it can claim over the control over the fields of Iran. It was also helpful for the
efforts that lead to the retaliation to the involvement of other individuals which would also be the
part of the analysis require for the jurisdiction. Hence, according to this rule the Judgement made
by the ICJ for the case of Greece vs UK 1952 can be used as rule for this case. As the role of
government in both case scenarios are related to each other. The UK was under the duty of the
submission was helpful for the arbitration in accordance to the treaties of 1826 to 1926.
Therefore, the analysis explained that a government cannot arbitrate a treaty for their own
benefits (Kryvoi, 2018).
Conclusion
Also there is importance of using the case in international law because this helps in
development of the laws in better and effective manner. this is pertaining to the fact that when
the working of the company will be according to the laws then this will be improving the
efficiency of business (Hakim, 2019). Along with this the international laws will be created in

order to improve the working efficiency of the legal environment and this will provide a base to
other companies as well for improving the business.
The conclusion of this case study was that the British government was determined as the
one which was determined for reclaiming the control of the Iran's oil fields and it was signalling
the other countries to be able to lead the retaliation. UK along with US government wanted to
begin the oil boycott against Iran in order to cut off the petroleum profits and weakening the
Iranian government (Crawford, 2018). The value of the rail fell would have to be able to gain
intelligence service. This was followed as the factors which helps in the Central Intelligence
Agency for the assistance. Hence, as the jurisdiction of UK explained that the Iran government
does not have the right to jurisdiction to this case. This was the reason due to which a complaint
was filed by UK to the security council against Iran for jeopardization of the world peace.
However, this complains was not able to be taken any effect as majority of the nations were not
in the favour of UK. Most of the votes were against the compliant of UK due to which the
Formal complaint which was logged by UK to the security council had to have been able
to answer the legal question in order to resolve the issue of the jurisdiction. The international
court of jurisdiction in this case was the one which had the responsibility of settling the case in
which the dispute which was present between the countries. The application of the rule of Article
36 was considered to be the factor which allows the cases that involved about the treaties
between the retaliation to be the factors required for the company to be able to generate the
jurisdiction which impacted the relation between the countries. This case the UK was not able to
measure the organization and its details for the negotiation for the good office of the council of
the league of nations. The measures which were taken as the effectiveness of the proceeding
helps the case as it provide the rule for the judgement to be made and ceasing the ongoing
operations (Omelchuk and et.al., 2021). This was the reason why the ICJ was decided that due to
this Iran conceded to ICJ jurisdiction only in cases that involved the treaties that was agreed
upon after the 1932 for only treaty cited by UK for the date that was given in-between Iran and a
different company. Hence, in the end UK had no jurisdiction in this matter and as a result the ICJ
overruled the case of UK government against Iran.

CONCLUSION
With the above report it can be stated that the compliance with the business laws is very
important for the company. The reason underlying this fact is that when the working will be
implemented in accordance to the laws then it will be appropriate. furthermore, the report
evaluated the case of Anglo- Iranian Oil co. case with the help of IRAC format. this IRAC
format involves Issue, Rules, Application and Conclusion. also the case law was referred relating
to the case of Ambatielos case which is Greece v UK [1952].

REFERENCES
Books and Journals
Ağır, S. and Artunç, C., 2021. Set and forget? the evolution of business law in the ottoman
empire and turkey. Business History Review. 95(4). pp.703-738.
Alam, M. H., 2019. Impact of E-Trade:: From International Trade Law Perspective. European
Journal of Engineering and Technology Research. 4(9). pp.174-176.
Allen, W.T., Kraakman, R. and Khanna, V.S., 2021. Commentaries and cases on the law of
business organization. Wolters Kluwer.
Contreras, J. L., 2019. The New Extraterritoriality: FRAND Royalties, Anti-Suit Injunctions and
the Global Race to the Bottom in Disputes over Standards-Essential Patents. BUJ Sci. &
Tech. L.. 25. p.251.
Crawford, J., 2018. The current political discourse concerning international law. The Modern
Law Review. 81(1). pp.1-22.
Davidson, D.V. and Forsythe, L.M., 2020. Business law: Principles and cases in the legal
environment. Wolters Kluwer Law & Business.
DiMatteo, L.A., 2021. International Business Law and the Legal Environment: A Transactional
Approach. Routledge.
Fenwick, M. and Wrbka, S., 2018. International business law: emerging fields of regulation.
Bloomsbury Publishing.
Hakim, L., 2019. Credit Banking in Business Law Perspective. Unifikasi: Jurnal Ilmu
Hukum. 6(1). pp.53-60.
Kryvoi, Y., 2018. Economic crimes in international investment law. International &
Comparative Law Quarterly. 67(3). pp.577-605.
Munawar, N.A. and Saputra, F., 2021. Application Of Business Ethics And Business Law On
Economic Democracy That Impacts Business Sustainability. Journal of Law, Poliitic and
Humanities. 1(3). pp.115-125.
Omelchuk, O. M., and et.al., 2021. Protection of human rights in the context of the development
of the rule of law principle: the international aspect. Journal of the National Academy of
Legal Sciences of Ukraine. 28(1). pp.32-42.
Online
Anglo-Iranian Oil Co. (United Kingdom v. Iran). 2022. [Online]. Available through:
<https://www.icj-cij.org/en/case/16>
Ambatielos, (Greece v. United Kingdom) , 2022[Online]. Available through: <https://www.icj-
cij.org/en/case/15>