Schering Corp v Iran Iran US CTR

The claimant argued that allegedly expropriatory acts of the Workers Council of Schering Iran, the claimant’s Iranian subsidiary company, were attributable to Iran.

The tribunal rejected the argument finding that although brought into being by the State, Workers Councils had as their role the protection of workers interests; they were not intended ‘to function as part of the State machinery’ and hence were not organs of the state. In addition they did not ‘in fact’ act on behalf of the state. There being no evidence that ‘there was any governmental influence over the election of the members of the Council, that any governmental order, directives or recommendations were issued to the Council or that it acts under the instructions of any governmental body’