The UN Security Council Sanctions Snapback Mechanism and Iran–France Investment Contracts: From Contractual Validity to Risk Allocation

Mahshid Yaraghi Esfahani¹ Bahareh Aminyar²

1) Assistant Professor of International Law, Department of International Law, Faculty of Law and Theology, Shahid Ashrafi Esfahani University, Isfahan, Iran.
2) LLM student, Department of International Law, Faculty of Law and Theology, Shahid Ashrafi Esfahani University, Isfahan, Iran.

IOI Code : ABKH-ACZEFF
Publication : 4th International Conference on Applied Researches in Humanities, Economics, Management & Accounting(icrhema.com)
Abstract :
    The completion of the snapback process under paragraphs 11 and 12 of UN Security Council Resolution 2231,led to the re-application of the provisions of six previous Security Council resolutions against Iran from September 2025. In parallel, the European Union reinstated its autonomous sanctions, although Iran, Russia and China reject the legal validity of the process. This development raises serious questions for investment contracts between Iranian and French parties, which operate within a multi-layered legal framework comprising Iranian law, French and EU law, the 2003 Iran–France bilateral investment treaty and international arbitration rules. Using a descriptive-analytical method based on international instruments, national and EU legislation, and judicial and arbitral practice, this paper examines the effect of the snapback mechanism on the validity and performance of such contracts. The findings show that the mechanism does not in itself invalidate contracts concluded before the re-imposition of sanctions, and paragraph 14 of Resolution 2231 confirms its non-retroactive effect. However, contracts concluded afterwards in breach of mandatory prohibitions face a serious risk of nullity or unenforceability before European fora. Moreover, for the French party, EU regulations are more decisive than the Security Council resolutions themselves. Reliance on force majeure or hardship is not automatic; it depends on the date of conclusion, the governing law, the contractual terms and causation, particularly since the foreseeability of snapback increased from 2018 and more significantly from 2020. The paper concludes by emphasizing the need for carefully drafted sanctions clauses, a clear distinction between the different layers of sanctions, and mechanisms for suspension and renegotiation.

Keywords : snapback mechanism resolution 2231 investment contract force majeure hardship