Iran: The cases of resort to the court in the arbitral proceeding in pursuance of Ratification of International Trade Arbitration Act by Iran

Last Updated: 21 January 2003
Article by Behrooz Akhlaghi

In accordance with UNCITRAL Arbitration rules (adopted by the General Assembly of the UN on December15, 1976) all the matters arising in the arbitral proceeding are solvable only by the arbitral tribunal

In spite of the fact that International Trade Arbitration Act is ratified on 30.9.1997 by the Iranian legislature which had been mainly derived from the aforementioned rules but, in accordance with the Iranian arbitration Act, the Iranian courts in some cases have the jurisdiction to intervene in arbitral proceeding by request of each of the parties.

The cases that each parties could resort to the court in the process of the arbitration are as follows;

1. The Competence of the Arbitral Tribunal :

The arbitral tribunal shall have the power to rules on objections that it has no competence, including any objections with respect to the existence or validity of the arbitration clause or to determine the existence or the validity of the contract of which an arbitration clause forms a part. (1997 Act, article.16 (1) and (2))

But the main point and discrepancy is that the arbitral tribunal rule on a plea concerning its competence as a preliminary question, if each party has objection against the arbitral decision, he has a right to refer to the court within thirty days as from the date the decision is served on him. (1997 Act, article. 16(3)) Consequently the arbitral tribunal’s decision concerning its jurisdiction is not final, and the award which should be issued by court is final.

2. The Appointment of the Arbitrators :

In order to appoint the arbitrators both parties should agree in this respect. In the absence of such agreement, in order to appoint arbitration board each party appoints his arbitrator and the appointed ones shall discuss the chairman. If one of the parties within thirty days as from the commencing of the arbitration fails to appoint his arbitrator or to obtain his approval, or if the appointed arbitrators are not in position to appoint the chairman or fail to acquire his acceptance, the court shall appoint the arbitrator or chairman in pursuance of request of one of the parties. (1997 Act, article. 11(1) and (2.a)).

When the parties in respect of their dispute are agreed to a single arbitrator and they fail to agree on such, the court shall appoint him in pursuance of request of one of the parties. (Foregoing Act, article.11 (2.b))

UNCITRAL Rules of Arbitration has the same regulation, the original difference between these two Acts is in the appointing of the authority. In case of any dispute between two parties to appoint the arbitrator the Arbitration Authority will decide in this respect.

But, according to article 6 of Iranian Act, concerning institutional arbitration, the arbitral institution appoints the arbitrators or chairman, in the aforementioned cases. (Foregoing Act, article.6 (2)).

3. Challenge of Arbitrators :

Regarding to Article 13 of the relevant Act:

Quote:

“The parties may agree on arbitrator’s challenge formalities, if there is not such agreement the party who intends to challenge the arbitrator should, by a brief, declare the reasons of challenge to the arbitrator within fifteen days after being informed from appointment of arbitrators. The decision on the challenge will be made by arbitrator unless the challenged arbitrator is resigned from his office or the adverse party accepts the challenge. (Forgoing Act, article. 13 (1) and (2 )).” Unquote

If the challenge had not been accepted by the other party and the challenged arbitrator does not withdraw, the decision on the challenge will be made by court in pursuance of request of interested party, within thirty days as from receipt of the notice containing the decision related to the dismissal of challenge. (Foregoing Act, article.13 (3)).

But, according to article 6 of the institutional arbitration, this decision will be made by the aforesaid authority. (forgoing Act, article.6 (2))

4. Failure or impossibility to discharge the duty by arbitrators:

In the event that an arbitrator fails to act or in the event of the de jure or de facto impossibility of performing without delay in this regard, his functions, if about realization of this impossibility was not agreed between the parties, the court in pursuance of request of each party, will decide concerning realization of aforementioned instances.(Foregoing Act,article.14 (1)).

But, according to article 6 of foregoing Act, in the institutional arbitration, the arbitral makes the decision about in this regard. (Foregoing Act, article.6 (2)).

5. Issuance of Provisional Injunction or Remedy Order

According to article 9 of Iranian Act, quote: “Before or within the arbitration proceeding, each one of the parties may apply the Justice of the court mentioned in article (6) to issue the remedy order or provisional injunction.”

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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