Arbitrability of Foreign Investment Disputes in Iranian Law with a Glance to IPCs

Document Type : Original Article

Authors

1 Assistant Professor, Faculty of Law and Political Science, University of Shahid Madani, Tabriz, Iran

2 Ph.D. in Private Law, Faculty of Law, Shiraz University, Shiraz, Iran

10.22091/ijicl.2024.8989.1052

Abstract

The issue of arbitrability in foreign investment treaties poses ongoing challenges for both host nations and foreign investors. Iranian law imposes constitutional constraints on resorting to arbitration, in addition to the provisions outlined in international commercial arbitration regulations. Persistent issues revolve around the requirement of parliamentary ratification of arbitration, the timeframe for such ratification, and the applicability of pre-existing doctrines to treaties concluded prior to the ratification of the Constitution. Despite the fact that Iranian Petroleum Contracts (IPCs) are among the most important foreign investment contracts in Iran, their intricacies create additional challenges. This article examines the legal theories and practices surrounding the arbitrability of contracts in the field of foreign investment, with a specific focus on IPCs, using a descriptive-analytical approach. At the end, Findings reveal that from a domestic standpoint, parliamentary approval must precede the signing of any treaty. The same approach can also be applied to IPCs However, this paper argues that this requirement does not apply to treaties enforced prior to the enactment of the Iranian Constitution. This approach finds support in existing laws and precedents established by the Iranian Court of Administrative Justice.

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