Iran brought the case to the International Court of Justice (ICJ) in 2018 some two months after the US left the Iran nuclear deal unilaterally, arguing that Washington had flouted a 1955 Treaty of Amity with Tehran by restoring the sanctions lifted under the deal.
But US lawyers said Monday that the Hague-based tribunal does not have jurisdiction in the case, accusing Iran of abusing the decades-old "Treaty of Amity" to try to get sanctions relief for its economy, AFP reported.
"Iran's efforts to shoehorn this dispute into a legal instrument not intended for the purpose… are entirely without merit," Marik String, Acting Legal Adviser of the US State Department, claimed in an ICJ videolink.
"We respectfully request dismissal of Iran's case."
Iran will have the chance to answer on Wednesday, with hearings lasting until next Monday.
The current hearings deal only with whether the ICJ has jurisdiction. The tribunal will only move on to the merits of the case if and when it decides it is allowed to deal with it.
A decision on jurisdiction by the ICJ, which was set up after World War II to rule in disputes between nations, could take several months, while a final ruling would take years.
Tehran won an early victory in October 2018 when the ICJ ordered the US to provisionally lift its sanctions on food, medicine, medical equipment, agricultural goods, and airplane parts and services until the tribunal issues its final verdict.
The US rushed to respond by formally ending the Treaty of Amity.
The ICJ is also dealing with a separate case over Tehran's bid to unfreeze $2 billion in assets frozen in the United States.
The 2015 nuclear deal – involving the five permanent members of the UN Security Council – Britain, China, France, Russia and the United States, plus Germany – has hung by a thread since the US pulled out from the nuclear agreement in 2018 and reimposed sanctions on Iran. Tehran retaliated by scaling back its obligations under the agreement.
The accord promises Iran sanctions relief in exchange for curbing its nuclear program.
Washington has reimposed sanctions on Iran and companies with ties to it, notably hitting Iran's vital oil sector and central bank, while major global firms halted their activities in Iran.
Iranian Foreign Minister Mohammad Javad Zarif condemned US sanctions against Iran including on essential food and medical imports as economic terrorism.