Originally from World Arbitration Reporter (WAR) - 2nd Edition

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IRAN

Jamal Seifi*and Shahbiz Shafe**

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.