The International Court of Justice (ICJ) in The Hague is hearing arguments this week from Tehran and Washington before deciding whether it has jurisdiction to deal with the case, according to AFP.
Iran dragged the United States to the ICJ in 2018 when President Donald Trump pulled the US out of a landmark deal limiting Iran's nuclear program and reimposed sanctions.
Tehran's representative Hamidreza Oloumiyazdi told the court by videolink that the sanctions were a "clear breach" of a 1955 "Treaty of Amity" between Iran and the United States.
"The US measures and the underlying policy of maximum pressure disregard the very foundation of international law," Oloumiyazdi said.
He said the sanctions were causing "hardship and suffering" including a record drop in Iran's trade, a near-doubling of food prices and "severe" effects on the health system.
"All that matters now for the US administration is whether its measures are succeeding in destroying the Iranian economy and ruining the lives of millions of Iranians," Oloumiyazdi added.
The US pressured the ICJ to reject the case on Monday, saying the sanctions have nothing to do with the friendship treaty, which predated the 1979 Islamic Revolution in Iran and subsequent severing of ties between the two countries.
Washington formally ended the Treaty of Amity in late 2018 after the ICJ ordered it to ease sanctions on humanitarian goods as an emergency measure while the overall lawsuit is dealt with.
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.