Court System and Dispute Resolution in Iran

20170221_113250Extract Tehran Times:

By Rebecca Meijlink – A team at International Research Networks (IRN) organised an excellent Iran Business Symposium on Feb. 21+23, 2017, at the Renaissance Hotel in Amsterdam. The purpose of the conference was to further create a better multilateral understanding and to serve as a platform whereby the global business and investment community could discover the latest developments and opportunities within the newly opened economy of Iran following the implementation of the Joint comprehensive Plan of Action (JCPOA), commonly called the nuclear deal. The forum was also intended to provide an opportunity for open discussion.

Sam Jalaei, Attorney-at-Law, partner Magnusson Law, gave an excellent presentation on the Legal System in Iran.


Iranian Legal System:

 The Iranian legal system is a civil law system which is founded on the French law and Islamic jurisprudence
 The Commercial Code of Iran has adopted the French, Swiss and Belgium commercial laws and was enacted in May 1932
 The Iranian Civil Code; comprises of 3 volumes and 1335 articles (enacted between 1928 – 1935 largely intact with only minor amendments made since to its provisions – pertaining to the rules of evidence)
 The Iranian courts refer to the Civil Code as the main source of law for determining the legal and commercial rights of natural and legal persons
 Other important laws; Civil Liability Code, Commercial Arbitration, Foreign Investment, Free Trade Zones, Insurance in Iran, Labor Law, Rights of foreign nationals, Taxation and Stock Exchange

Court system in Iran:
 Classified according to area of jurisdiction, civil or criminal (litigation or crime)
 In an Iranian court the judge acts as prosecutor, jury and the arbiter (inquisitorial system)
 The judge holds absolute power and all judges are certified under Islamic law and most are members of the ruling clergy

Courts and Major Dispute Resolution Institutions of Iran:
 Courts of First Instance (public courts with jurisdiction over civil and the majority of criminal cases)
 Appellate Courts
 The Supreme Court
 TRAC (The Tehran Regional Arbitration Centre – established 2004)
 The Iranian Chamber of Commerce established the Arbitration Tribunal – law adopted in 2000

 Iran is party to the New York Arbitration Convention 1958 with more than 150 worldwide signatories. An Arbitration clause prevents the courts from trying the conflict.
 Commercial parties are free to agree to settle existing of future conflicts within a specified area, such as the understanding or performance under a specific contract through arbitration. To qualify under the New York Convention the arbitration agreement must be made in writing, either as part of the commercial agreement or in a separate agreement.
 The parties may designate the venue for the arbitration, the number of arbitrators and the applicable rules for the arbitration or refer to an existing arbitration forum, such as the ICC Arbitration or a local Chamber of Commerce or similar arbitration panel. Common neutral arbitrations are held in Zürich and Stockholm. Financial and shipping arbitrations are often held in London.
 Not allowed to appoint before the dispute arises a foreign arbitrator of the same nationality as the foreign contract party.
 The applicable law is determined either by agreement in the commercial contract or by reference to general International Private Law on the choice of law. It is also possible to refer to General Principles of Commercial Contract Law 1999 or more specifically the PECL rules or UNCITRAL Principles 2004.
 The decision returned by the arbitration panel is immediately enforceable in all of the contracting states. Appeal to the ordinary courts of law is only possibly when the formalities behind the arbitration were not complied with.

Court System in Iran – Slide Show Presentation

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