Under Iranian civil law, in principle, there exists no statute of limitation for bringing a claim to the court of law or arbitration. This procedure is in consistence with the directive of Iran Guardian Council of the Constitution, dated February 16, 1983, in which it ruled that imposing a limitation period of any kind on bringing a claim before the court is considered as opposed to sharia.Therefore, based on this directive, if one has a civil claim from 50 years ago, he is still entitled to file a lawsuit for such a claim and accordingly, the court of law is obliged to hear the claim.

Two exceptions to the statute of limitation under Iranian law

Article 318 of Iran Commercial Code provides that lawsuits concerning bills of exchange, promissory notes and cheques issued by merchants for commercial purposes would not be accepted by the courts after the expiry of five years from the date of the act of protest or the last legal action, unless there has been legal recognition of the debt, in which case period of limitation will run from the date of such acknowledgement.

According to this Article, if there has been no protest, the statute of limitation under Iranian law will commence to run from the date of expiry of the time for protest. It is noteworthy that even in such a situation, the holder of a bill of exchange or a promissory note or a cheque can, as long as the period of limitation applicable to movable property has not expired, recover the amount from the person who has benefited himself at his expense. (Article 319)

Another exception to the statute of limitation under Iranian law in civil and commercial matters is Article 36 of Iran Insurance Law which provides that the limitation period for claims arising out of insurance contracts would be 2 years, triggering from the date that the cause of action accrues.

In contrast, when it comes to criminal matters, a strict regime of limitation period is applicable to ta’zirat (punishment for offenses at the discretion of the judge) and forgivable crimes, as well as to the prosecution of crimes. According to newly enacted Iran penal Code (2013), the limitation period for ta’zirat and forgivable crimes is one year, triggering from the date of being aware of such a crime.

Also, if the prosecution of a crime lasts for more than 3 to 15 years (depending on the crime), it should be stopped due to being time barred. Crimes related to national security, economical matters with the amount of one billion Rials and more and the crimes related to drugs are excepted from such limitation period.

Therefore, under Iranian law, Civil and commercial matters are not subject to any statute of limitation, except for those indicated in Articles 318 and 319 of Iran commercial code, as well as Article 36 of Iran insurance law; but statute of limitation is applicable to a wide range of crimes under Iran new penal code of 2013.

[1] This article was published on THE IMPACT LAWYERS on August 26, 2020

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