Islamic Republic of Iran jointed the Convention on Recognition and Enforcement of Foreign Arbitral Awards (New York Convention, 1958) by ratifying it on 2001. Accordingly, the arbitral awards which are issued in a contracting state other than Iran shall be enforced in accord with New York Convention.
New York Convention permitted contracting States to make two reservations as to the scope of application of the Convention:
- The first permitted reservation is reciprocity. A Contracting State can provide that it will only apply the Convention to awards that are issued in the territory of another Contracting State. This reservation has been adopted by more than half of Contracting States.
- The second permitted reservation is that a contracting state may “declare that it will apply the Convention only to disputes arising out of legal relationships, whether contractual or not, which are considered as commercial”.
In “Act of Islamic Republic of Iran’s Accession to the Convention on Recognition and Enforcement of Arbitral Awards in New York”, Iran made both reservation rights in accordance with article 1(3) of the Convention, as below:
- Islamic Republic of Iran will apply the Convention only with regard to disputes arising out of legal relationships whether contractual or non-contractual which are considered as commercial by the laws of Iran.
- Islamic Republic of Iran will apply the Convention only on reciprocal treatment basis and will recognize and enforce awards issued in the territory of the member states of the Convention.
Also, it is provided the Act that the provisions of principle 139 of the Constitution in relation to submission to arbitration must be complied with.
Therefore, only those awards which have been issued in a “contracting state” AND with regards to a commercial dispute (within the meaning of laws of Iran) can be recognized and enforced in Iran.
According to Article IV of Iran Act of accession to New York Convection, in order to obtain the recognition and enforcement of a foreign arbitral award, the applying party shall, at the time of the application, supply:
a. The duly authenticated original award or a duly certified copy thereof;
b. The original agreement referred to in article II or a duly certified copy thereof.
According to Article IV(2) of Iran Act of accession to New York Convection, If the said award or agreement is not made in official language of the country in which the award is relied upon, the party applying for recognition and enforcement of the award shall produce a translation of these documents into such language. That is, if a foreign arbitral award is to be recognized and enforced in Iran, it shall be translated to Farsi (Persian). The translation shall be certified by an official or sworn translator or by a diplomatic or consular agent.
In recognition and enforcement of foreign arbitral awards in Iran, courts shall pay attention to the requirement of Article III of the Iran Act of accession to New York Convection; that is, there shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards.