Execution of Foreign Judgments in Iran
August 9, 2000 - 0:0
Part 1 --Since the law for protection of foreign investments in Iran was enacted, (1955), foreign investments, in various fields, have been made in Iran. Among the fields of investments, transfer of technology, application of licenses with an without use of trade names, trademarks and patents, sale of machinery, equipment and spare parts and transfers of hard currencies can be named.
Since the Islamic Republic emerged in Iran numerous financing agreements have been entered between many international leading banks from foreign countries as providers of financing and the Iranian commercial banks. Among the legal matters the foreign companies and foreign banks have proposed and negotiated seriously have been the two crucial subject matters namely: * Governing Law and, * Settlement of Disputes. The drafts of the agreements for reinvestment as well as for provision of credit financing suggested laws of a third country as governing law.
A number of the drafts of those agreements suggested that the disputes be referred to arbitration under the rules of ICC (International Chamber of Commerce), and that the courts of Iran to issue the writes for execution of the awards. Other drafts suggested that the courts of third country be assigned for settlement of disputes and that the Iranian courts to issue the writs for execution of the foreign judgments.
Settlement of Disputes Through Arbitration I will discuss in brief, the effects of settlement of disputes through arbitration as well as by courts of justice and execution in Iran of awards of arbitration as well as judgments of foreign courts.
Settlement of Disputes Through Arbitration Disputes between a foreign company and its Iranian counterpart can, after failing an amicable negotiation, be settled by referring the disputes to arbitration. In case the Iranian counterpart is a private company, the decision of its shareholders or board of directors, as stipulated in its articles of association, will be sufficient for it to go to arbitration. In case the Iranian counterpart is a government entity: A company or otherwise, for going to arbitration by it, whether as a plaintiff or a defendant, prior approval of the Consultative Assembly shall be required.
(Article 139 of the Constitution of the Islamic Republic of Iran). Practically it would take a considerable amount of time until the approval is issued. These my delay commencement and/or proceedings of the arbitration. In the cases the foreign companies insist that the disputes be settled through arbitration, the Iranian government entities shall have to insert "with due regard to the laws of Iran" in the relevant part of the agreement. It means that at the time such Iranian government entity decides or is forced to go to arbitration it must obtain in advance the approval of the Consultative Assembly. Awards of arbitration, can be executed in Iran in accordance with Article 488, Chapter 7 On Arbitration, of the Iranian Civil Procedural Code (as amended).
The proceedings for execution of awards shall be the same as provided for the awards of the domestic arbitration, provided that they meet all of the requirements stipulated in the said code.
Settlement of Disputes by Court of Justice Foreign companies, the parties to agreements with Iranian government entities, in order to get rid of the formalities referred to above, may agree that the matters of disputes be referred to a competent court in Iran or in a third country for settlement.
For execution in Iran of a third country court judgment, the foreign companies normally propose that their Iranian government counterparts should ensure that the judgments when issued by a third country court of justice be executed in Iran. During the negotiations over the drafts of such documents I, as an Iranian lawyer, have clarified that the Iranian government entities are not in a position to ensure that the courts of justice in Iran will issue the writs for execution of foreign judgments.
Writs for execution of foreign judgment sin Iran can be issued only if the courts are convinced the such judgments meet the requirements and the provisions stipulated in the law of Foreign Judgments and Deeds Executable in Iran, (1977). The law also provides for enforcement in Iran of the foreign deeds: commercial, legal, and others duly issued abroad. the procedures stipulated in the law for enforcement of foreign court judgments will also be applicable for enforcement of the foreign deeds.
The writer of this article deemed it necessary to translate the Law of Foreign Judgments and Deeds Execrable in Iran. Full text of translation of this law has been given below for those who are interested to have it. Quoting full or any part of the translation with the source and name of the translator is allowed.
(To Be Contd.)
Since the Islamic Republic emerged in Iran numerous financing agreements have been entered between many international leading banks from foreign countries as providers of financing and the Iranian commercial banks. Among the legal matters the foreign companies and foreign banks have proposed and negotiated seriously have been the two crucial subject matters namely: * Governing Law and, * Settlement of Disputes. The drafts of the agreements for reinvestment as well as for provision of credit financing suggested laws of a third country as governing law.
A number of the drafts of those agreements suggested that the disputes be referred to arbitration under the rules of ICC (International Chamber of Commerce), and that the courts of Iran to issue the writes for execution of the awards. Other drafts suggested that the courts of third country be assigned for settlement of disputes and that the Iranian courts to issue the writs for execution of the foreign judgments.
Settlement of Disputes Through Arbitration I will discuss in brief, the effects of settlement of disputes through arbitration as well as by courts of justice and execution in Iran of awards of arbitration as well as judgments of foreign courts.
Settlement of Disputes Through Arbitration Disputes between a foreign company and its Iranian counterpart can, after failing an amicable negotiation, be settled by referring the disputes to arbitration. In case the Iranian counterpart is a private company, the decision of its shareholders or board of directors, as stipulated in its articles of association, will be sufficient for it to go to arbitration. In case the Iranian counterpart is a government entity: A company or otherwise, for going to arbitration by it, whether as a plaintiff or a defendant, prior approval of the Consultative Assembly shall be required.
(Article 139 of the Constitution of the Islamic Republic of Iran). Practically it would take a considerable amount of time until the approval is issued. These my delay commencement and/or proceedings of the arbitration. In the cases the foreign companies insist that the disputes be settled through arbitration, the Iranian government entities shall have to insert "with due regard to the laws of Iran" in the relevant part of the agreement. It means that at the time such Iranian government entity decides or is forced to go to arbitration it must obtain in advance the approval of the Consultative Assembly. Awards of arbitration, can be executed in Iran in accordance with Article 488, Chapter 7 On Arbitration, of the Iranian Civil Procedural Code (as amended).
The proceedings for execution of awards shall be the same as provided for the awards of the domestic arbitration, provided that they meet all of the requirements stipulated in the said code.
Settlement of Disputes by Court of Justice Foreign companies, the parties to agreements with Iranian government entities, in order to get rid of the formalities referred to above, may agree that the matters of disputes be referred to a competent court in Iran or in a third country for settlement.
For execution in Iran of a third country court judgment, the foreign companies normally propose that their Iranian government counterparts should ensure that the judgments when issued by a third country court of justice be executed in Iran. During the negotiations over the drafts of such documents I, as an Iranian lawyer, have clarified that the Iranian government entities are not in a position to ensure that the courts of justice in Iran will issue the writs for execution of foreign judgments.
Writs for execution of foreign judgment sin Iran can be issued only if the courts are convinced the such judgments meet the requirements and the provisions stipulated in the law of Foreign Judgments and Deeds Executable in Iran, (1977). The law also provides for enforcement in Iran of the foreign deeds: commercial, legal, and others duly issued abroad. the procedures stipulated in the law for enforcement of foreign court judgments will also be applicable for enforcement of the foreign deeds.
The writer of this article deemed it necessary to translate the Law of Foreign Judgments and Deeds Execrable in Iran. Full text of translation of this law has been given below for those who are interested to have it. Quoting full or any part of the translation with the source and name of the translator is allowed.
(To Be Contd.)