What is the Procedure of Enforcement of award in Iran?
Arbitration is a kind of private adjudication by which parties to a commercial contract can resolve their disputes outside of any judicial system.
One of the main reasons of incorporating an arbitration clause in an international agreement is that parties can be certain about enforceability of the arbitral award. Many countries in including Iran have adopted international conventions that are pro-enforcement, that is, they provide only narrow grounds for refusing to enforce.
In addition, In Iran’s legal system, there are two separate Acts which mention the possibility of enforcement of a foreign judgment in Iran. First one is “Civil Code of the Islamic Republic of Iran” which is passed in 1928, and the second one is “Civil Judgments Enforcement Act” passed in 1977, which numerates the conditions of enforcing foreign judgments in Iran.
Is Iran party to New York Convention 1958?
Yes, Iran joined New York Convention on 15 Oct 2001.
Will an arbitral award issued in another country member to New York Convention be recognized and enforced in Iran?
Yes, Iran uses the declarations allowed in article 1 (3) of NYC. Therefore:
- In accordance with article 1 (3) of the Convention, the Islamic Republic of Iran will apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the national law of the Islamic Republic of Iran;
- In accordance with article 1 (3) of the Convention, the Islamic Republic of Iran will apply the Convention, on the basis of reciprocity, to the recognition and enforcement of only those awards made in the territory of another Contracting State Party to the Convention.
How does the recognition and enforcement of foreign judgment take place in Iran? Is a treaty required for such enforcement or recognition or enforcement can be done on reciprocity or comity basis?
Iran recognizes and enforces foreign judgment under certain conditions. Based on Iranian Law, a foreign judgment must satisfy the following conditions in order to be recognized for enforcement in Iran:
- The judgment should be in civil matters
- The judgment from the Iranian Courts should be recognized and enforced in the foreign country by the treaties or reciprocal deal.
- The judgment should not be contrary to the public order or moral of Iran.
- The judgment should not be contrary to the international conventions and special laws of Iran.
- The judgment should be final, definite and enforceable in the country of origin.
- A contrary judgment should not have been issued from the Iranian court.
- The subject matter of the judgment should not be exclusively within the jurisdiction of the Iranian Courts.
- The judgment should not be connected to immovable property located in Iran.
- The enforcement order should have been issued by a competent authority in the country of origin.
According to section (2) of above-mentioned rule, recognition and enforcement can be done only if there is treaty between Iran and the foreign country or based on reciprocity. When the above conditions have been considered, an applicant of enforcement of a foreign judgment should draft a petition or request and submit it to the competent court of Iran.
The competent court will be the Civil Court of the domicile of the judgment debtor. In the absence of any domicile in Iran, it should be submitted to the Civil Court of Tehran.
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Does Iran have treaties with other jurisdictions on the recognition and enforcement of judgment?
Iran is not a signatory of any international treaty or convention relating to recognition of foreign judgments. However, Iran has a few bilateral agreements in this regard, for example:
- Bilateral Agreement between Iran and France in relation to the domicile and navigation dated 1966.
- Bilateral Agreement between Iran and Germany in relation to the Mutual Economic cooperation and investment dated 1957.
- Bilateral Agreement between Iran and Turkey in relation to the Legal, Commercial and Judicial cooperation ratified on 2011.
Iran has also bilateral agreement for judicial cooperation with Russia, Algeria, UAE, Azerbaijan, Tunisia, Belarus, Ukraine, Kuwait and Iraq. But there is no such agreement between Iran and “Australia, Switzerland, UK and USA”.