Originally from Arbitration Law and Practice in the Middle East - Second Edition

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I. INTRODUCTION: ARBITRATION IN IRAN—HISTORY AND INFRASTRUCTURE

A. History and Current Legislation on Arbitration

1. Historical evolution of law relating to arbitration

Historically, Iran’s arbitration laws go back to some 100 years ago when for the first time the Provisional Civil Procedure Code of 1906 was enacted, which contained provisions regulating arbitration. There were further attempts to legislate on arbitration by the Arbitration Acts of 1927, 1928 and 1934. Finally, arbitration provisions were enacted as an extensive chapter in the 1939 Civil Procedure Code, which remained in force until April 2000, when it was replaced by a new Civil Procedure Code, including extensive provisions regulating arbitration. In the meantime, Iran’s Law on International Commercial Arbitration was enacted in 1997 with the aim of regulating international commercial arbitration.

2. Current law

Currently, arbitration in Iranian law is governed by (i) the Civil Procedure Code (the CPC, Articles 454-501) and (ii) the International Commercial Arbitration Act (LICA). The first essentially governs domestic arbitration though instances of arbitration with foreign elements cannot be excluded from its ambit. The provisions of the CPC on arbitration are not based on the UNCITRAL Model Law and mostly reflect the provisions of the 1939 CPC. The CPC did not use the opportunity to incorporate some present-day concepts and principles applied in international commercial arbitration, such as the principle of competence-competence, severability of the arbitration clause and so on, into Iranian laws on domestic arbitration. As the latest version of the CPC was revised in 2000, it looks quite unlikely that the domestic arbitration provisions will be revised in the near future. Developments will have to come through judicial interpretations by comparison and in the light of modern provisions of the LICA.