In Iranian law, arbitration has always been considered important as a method for resolving disputes, and many times necessary. The importance of this issue is so much so that it has been discussed in domestic and international laws. Therefore, knowing these rules is important.
Definition of arbitration :
The parties of a transaction or contract agree that if an argument raises between them about the contract, one or more arbitrators which have been defined from the start or which will be defined after the argument, will settle the argument between them.
Therefore, arbitration means that the members of the society solve their issues using one or more trusted people. In fact, one person might have been chosen by the two parties to judge between them, or the verdict might be given by the arbitrator chosen by the court. Thus, in the arbitration, the two sides of the lawsuit have appealed to the verdict rather than the court and have removed the judicial authority from their dispute. Other than the disputes where the two parties optionally choose someone to be the arbitrator, another kind of arbitration has been defined in the law, called forced arbitration. In the case of forced arbitration, the two parties of the dispute, or one party does not consent to have a arbitrator but is forced to do so in order to solve the dispute. Such is the case for divorces.
Arbitrators position :
Arbitration contract is an agreement on which the arbitration is based. Therefore, the arbitration contract must have the same conditions as a contract. The contract between the arbitrators and the two parties of the dispute obliges the arbitrator to take the necessary measures suggested by the law and the contract during the course of the arbitration. The arbitration contract alone is not enough to start the arbitration. In order to do so, the arbitrator specified by the two parties must announce their consent of this choice and it is from that time onwards that his job starts.
Tips on arbitration :
- The importance and value of arbitration is in the fact that the two parties of the argument are able to settle their dispute without having to go through the fierce and overwhelming legal rules and procedures and can themselves solve their problem with a very low fee and a judge of their own consent.
- If the issue of arbitration is mentioned in the contract, the subject, time, and the two probable parties must also be mentioned. Although it is possible that after the designation of an arbitration, the two parties do not wish for that person or any other person to solve their problem. In that case, they can go to court.
- The number of arbitrators must be odd. Therefore, there is either one person, three, or five. Given that the number of arbitrators is not mentioned and the two parties cannot reach an agreement, they must each choose one person and choose the third one together.
- People who are bankrupt or incapable cannot be chosen as arbitrators.
- During the arbitration, the two parties must each present their documents. Meanwhile, the arbitrators can ask each side for explanations and even use experts if needed. Arbitrators must not give a sentence against the rules of the country.
After the verdict is given, the person who has been ruled against must execute it within 20 days. Otherwise he will be forced to execute it by the court.
In addition to the mentioned points, according to article 27 of family support law, reference to arbitration is foreseen.
If you are up to running an arbitration or to determining known and skilled arbitrators for your contracts or disputes, and you are not adequately and accurately aware of the laws in Iran, you can make your choice easier by consulting with our expert attorneys at Sarasa Law Office.