by Justin Tollefsen | Sep 8, 2014 | Arbitration, Blog, International, Iran
Introduction: This article sets out one of the major issues which always play a vital role in doing business with Iran for Multinational Corporations i.e. contractual freedom of the contract parties relating to designation of governing law and arbitration procedure. The main purpose of this article is drawing your attention to the three important topics in this respect as hereunder: Governing law Under Iranian law rules, the parties may agree to choose a foreign law as the governing law of a contract subject to mandatory provisions of Iranian law. In the absence of a treaty, to the extent that foreign courts reciprocate the enforcement of foreign judgments by Iranian courts, foreign final judgments which are not against public policy in Iran are enforceable. To establish whether a judgment is against public policy in Iran or its mandatory provisions, some review of the merits may take place. Under Iranian conflict of law rules, the law governing a contract is the law of the place of execution of the contract. For this reason, many Iranian attorneys advise their clients who wish to subject their contracts to a foreign law, to sign the contract abroad. Notwithstanding the adopted practice for the place of signature, it is usually advisable that contracting parties may decide to submit to foreign law to the extent that it is not contrary to Iranian public policy. However, the Iranian conflict of law rule is arguably not a mandatory rule to the extent that it applies to commercial transactions. Even if one of the parties to a contract happens to be Iranian, they may elect for the contract...
