Commercial Litigation in Iran ( An interview )

Starting and operating a business can open one up to a wide range of disputes that might end up in court. These disputes are commonly referred to as business or commercial litigation.

Asgari Law Firm is a domestic and international business, commercial, and litigation law firm located in Tehran, Iran that provides general counsel services to emerging and established corporations, investors, professionals, and businesses of all sizes.

Below , please find our interview with Will Newman , a New York attorney , regarding the commercial litigation in Iran :

Can you tell me about the kinds of disputes you handle in your legal practice?

Asgari and Associates is a business law firm, and we deal with all types of commercial matters. This includes any dispute related to business, such as breaches of commercial contracts, disputes arising from a sale of goods, insurance disputes, real estate disputes, partnership disputes, shareholder disputes, and business dissolution matters.

What type of clients do you generally represent in disputes?

My clients are small and large businesses and foreign investors in Iran. My business clients include both private and state-owned Iranian companies.

Besides Microsoft Office, what software do you use in your practice?

We use Microsoft Teams and Zoom. Many document management programs do not work in Iran because of sanctions, so we use Iranian document management software called ADA. We used to use Google Workspace, but we lost access to it because of sanctions. Our access has resumed, but we have not returned to it. We also use Adobe Acrobat. We do not use software to record the number of hours we work on matters, though. Instead, we record that manually.

What books and websites do you use for legal research?

I use these sites to search Iranian laws and regulations: www.qavanin.ir, www.dotic.ir, and www.rc.majlis.ir

I use these sites to search Supreme Court cases and decisions: www.ara.jri.ac.ir, www.rrk.ir, and www.iranmatikan.com.

And I use www.adliran.com to view decisions from other cases. This platform is less important, however, since Iran is a civil law country, and so it relies on regulations more than case law decisions as common law countries do. But judgments from the Supreme Court may be useful.

Do you electronically file pleadings with the court? Or must you send paper copies of them to the courthouse?

All case filings are electronic. We have one platform for lawyers and another one for non-lawyers. For my cases, I can file everything at home with www.adliran.com, and another electronic system called SANA (sana.adliran.ir) will notify me when I need to go to court for hearings and provide other notifications.

Does Iran have specialized courts that only hear commercial cases?

Yes, Iran opened a special court for commercial cases in 2021. It is called the Judicial Complex in Handling Commercial Claims. There is no website delegated to this court only. However, www.mahakem-th.eadl.ir is the website for matters related to all the courts in Iran, including the commercial court.

The commercial court has one branch in Tehran, but there will be more branches and expand to other cities. This has really sped up the process of hearing cases.

Who decides the facts in a commercial case? Is it a judge or a jury?

Iran does not have juries in commercial cases. In the first instance, one judge decides on cases. On appeal, a panel of three judges decides cases. In commercial disputes, there is supposed to be an expert in the industry that assists the judge in understanding the issues, but in practice, I never see the experts actually appear.

There are multiple languages spoken in Iran besides Farsi. Are all court proceedings in Farsi?

All proceedings are in Farsi. People in Iran may speak Turkish or Arabic, but in court, everything is filed in Farsi.

Generally speaking, how many pages are the complaints or initial pleadings you see in your work?

It takes around six months to get a judgment in the first instance, but then a year to a year and a half for a final judgment after an appeal.

Generally speaking, how is evidence exchanged between the parties before trial? Do you get to interview the opposing witnesses before the trial?

There is no pre-trial discovery in Iran. The first time a litigant sees opposing witnesses is at the trial before the judge. I can, however, use the electronic platform to review the documents opposing litigants submit to a court.

Iran does allow for a case to have multiple trials. Before the first trial, there is no procedure to demand evidence, and it is not easy to get any kind of disclosure. You could put a request for disclosure in writing and submit it to the judge through the electronic platform, and maybe the judge will order it, but this rarely happens. At the first trial, though, you can ask the judge for a second trial, at which the opposing side must produce certain witnesses and evidence. If the judge decides after the first trial that he needs more facts to make a decision, he will order a second trial with additional evidence. The first trial is still very important since a litigant cannot submit new evidence in the second trial. And a litigant cannot change their claims after the first trial. In some complex cases, there may even be a third trial.

If you win, does the other side reimburse your attorneys’ fees?

Yes, the losing side pays for the prevailing party’s attorney and court fees. But in practice, the loser does not pay the exact amount incurred by the winner. Instead, the loser pays an amount the judge decides based on a court tariff. This is usually a fraction of the actual amount the winning party incurs pursuant to its contract with its attorney.

Are the Iranian courts open to the public? Can ordinary people watch a commercial trial?

Yes, trials are public and ordinary people can watch them. Recording a trial is not allowed unless the judge decides to permit it. And trials can be private if the judge grants the defendant’s request for privacy on the grounds that publicity would be harmful. This often arises in family court but also occurs a lot in some commercial competition cases.

Online trials can be scheduled. However, a link to the trial will be sent to the participants, which means ordinary people can not participate in the electronic trials. Recording the trial is not allowed; if it is authorized, the recording should be conducted by the judiciary.

Do you believe that Iranian courts have a particular strength for resolving commercial disputes?

The court system tries to make proceedings faster and more efficient with specialized commercial courts.

How about a weakness?

First, the system could also use more infrastructure funding, and judges could use more training. While I think Iran has adopted good concepts for dispute resolutions, I think it may take at least 3-5 more years to make them more effective,

Second, although there are special courts for commercial cases, there are no specialized laws or procedures for commercial cases. This means that the same issues that arise in other civil cases arise in commercial ones, just in a different location.

And third, the substantive law that applies to commercial disputes is also outdated. It came into effect over a hundred years ago, in 1921, and has not been updated since 1958. There is an amendment that the parliament has been considering for 15 years. This amendment may help clarify some issues that have not been settled, such as the meaning of who a trader is and other issues that arise in corporate governance, shareholder disputes, and M&A regulations.

How often do you go to the courthouse?

Once or twice per month.

When you are there, do you need to wear a special robe or wig?

There are no dress rules specific to the court, but women, in general, need to wear a scarf. People generally dress up, and women wear dark suits.

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Commercial Litigation in Iran ( An interview )

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