Arbitrators: Karl-Heinz Böckstiegel (chairman), Howard M. Holtzmann (concurring), Mohsen Mostafavi (dissenting)
Claimant: First Travel Corporation
Respondents: The Government of the Islamic Republic of Iran, Iran National Airlines Corporation
interpretation of contracts
Note: Howard M. Holtzmann appended a note to his signature; dissenting opinion of Mohsen Mostafavi (19 December 1985).
The Claimant First Travel Corporation ("FTC") sought commissions allegedly due under marketing agreements which Transportation Consultants International ("TCI") had with Iran Air. TCI was a wholly-owned subsidiary of the Claimant until sold in 1982. However, this claim was specifically excluded from that sale. The contract was terminated by Iran Air in early 1979, and although monthly fees were all paid, an additional commission was in dispute. The Tribunal based its award on an interpretation of the remuneration provision of the contract.
In addition, Iran Air was the party who proposed and drafted Article V 1.(b) of the Agreement. Thus, finally, this result is reinforced by the subsidiary rule of interpretation known as contra proferentem, which comes into play if, after all the ordinary processes of interpretation are exhausted, doubt still remains as to which meaning should be enforced. Corbin describes it as follows:
if ... it is clear that the parties tried to make a valid contract, and the remaining doubt as to the proper interpretation is merely as to which of two possible and reasonable meanings is to be adopted, the court will adopt that one which is the less favorable in its legal effect to the party who chose the words.'