Tehran dragged Washington to the International Court of Justice (ICJ) in The Hague in 2018 after Trump pulled the US out of a landmark international nuclear deal with Iran.
They will argue over the coming week about whether the court, set up after World War II to deal with disputes between UN member states, actually has jurisdiction in the case.
Iran says the sanctions brought back by the Trump administration breach the 1955 “Treaty of Amity” between the two countries, signed long before the 1979 Iranian revolution severed ties.
Tehran won an early victory in October 2018 when the ICJ ordered sanctions on humanitarian goods to be eased as an emergency measure while the overall lawsuit is dealt with.
The US responded by formally ending the treaty, agreed when Iran was ruled by the Western-oriented shah, and accusing Iran of using the ICJ for “propaganda” purposes.
The United States will first address the court on Monday at 1300 GMT about whether judges have jurisdiction in the case, while Iran will speak on Wednesday.
A decision on that issue could take several months, while a final judgment will take years.
Relations between Washington and Tehran have been tense since the Iranian revolution, and have spiralled since Trump unilaterally pulled out of the nuclear deal in May 2018.
The deal, involving the five permanent members of the UN Security Council — Britain, China, France, Russia and the United States, plus Germany — had limited Iran’s nuclear programme.
Washington then 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.
Tehran took the case to the ICJ and, in response to Iran’s request for so-called “provisional measures” while the case is resolved, the judges two years ago found that some of the sanctions breached the 1955 treaty.
The court ordered Washington to lift measures on medicines, medical equipment, food, agricultural goods, and airplane parts and services.
The ICJ is also dealing with a separate case over Tehran’s bid to unfreeze $2 billion in assets frozen in the United States.
In February 2019 the court said the case could go ahead, rejecting US arguments that Iran’s “unclean hands” — Tehran’s alleged backing for terror groups — should disqualify its lawsuit.