Enforcement of Arbitral Awards in Iran

>>Enforcement of Arbitral Awards in Iran

Enforcement of Arbitral Awards in Iran

2020-06-14T12:35:19+04:30September 6th, 2018|Categories: Iran Arbitration|0 Comments

Under Iran arbitration regime, there are three categories of arbitral awards: “National Awards”, “International Awards” and “Foreign Awards”, as will be explained below. Accordingly, enforcement of arbitral awards in Iran might have different procedural requirements.

An arbitration award is considered as national, if both parties to arbitration agreement, at the time concluding the agreement, are nationals of Iran AND the seat of arbitration is in Iran.  either it is between nationals of Iran (national) or any other country (international). If the seat is still Iran, but at least one of the parties to arbitration agreement, at the time concluding the agreement is not Iranian, then the arbitration award is considered as international. An arbitration award is considered as foreign, if the arbitration is seated in any country other than Iran, regardless of the nationalities of the parties involved.

Iran joined New York Convention on Recognition and Enforcement of Foreign Arbitral Awards (New York Convention, 1958) in 2001 and therefore, foreign arbitral awards shall be recognized and enforced in Iran in accord with this Convention (click here).

In order to enforce national or international arbitration awards in Iran, there is no need to recognize the award first. Chapter 8 of Iran’s Law on International Commercial Arbitration (LICA) titled “Enforcement of the awards”, regulates the enforcement procedure of international awards. Article 35 of LICA provides as below:

  1. Except in cases provided for in article 33 and 34, the arbitral awards made under this Act are final and shall be enforceable after being communicated. Upon a written request to the court specified in article 6, the procedure for enforcement of court judgments shall be enforced.
  2. If one of the parties requests for setting aside of the award from the court specified in article 6 and the other party requests for its recognition or enforcement, the court may, upon the request by the party applying for recognition or enforcement, order the requesting party for setting aside to provide an appropriate security.

Therefore, the procedure for enforcement of such arbitral awards in Iran is the same as for the enforcement of court decisions in “Enforcement Branches”.

National arbitration awards are also enforceable under the provisions of Section 7 of the Civil Procedure Code (CPC) of Iran.

Difficulty arises when an arbitral award is neither enforceable under provisions of LICA or CPC nor, New York Convention. By way of example, when an award is rendered in a non-contracting state to New York Convention, it is neither enforceable under this convention, nor can it be enforced under LICA provisions, because seat of arbitration is outside of Iran. In such cases, there are three theories that can be used for enforcement by a competent court:

  1. Analogize a foreign arbitral award to a foreign court decision;
  2.  Analogize a foreign arbitral award to a foreign enforceable document; and
  3. Analogize a foreign arbitral award to a domestic arbitral award, either national award (according to Civil Procedure Code of Iran (CPC)) or international award (according to LICA)