The Comprehensive Examination of Challenges in Enforcing Foreign Arbitral Awards in the Iranian Legal System with Emphasis on Public Order and National Sovereignty

This article examines the principal legal, constitutional and practical obstacles to recognition and enforcement of foreign arbitral awards in the Islamic Republic of Iran, focusing on the twin concepts of public order (ordre public) and national sovereignty. Iran’s accession to the 1958 New York Convention in 2001 and the enactment of domestic arbitration legislation modelled on the UNCITRAL Model Law have, in principle, created a framework conducive to enforcement; however, constitutional constraints, state practice and policy considerations repeatedly complicate implementation. Central among obstacles is article 139 of the Iranian Constitution, which conditions referral or settlement of disputes concerning public or state property to the approval of the Council of Ministers and where foreigners are parties to parliamentary notification or approval, thereby limiting the arbitrability and enforceability of awards touching on public/state assets. Courts applying the public-order exception under the New York convention and domestic procedural rules have at times invoked article 139 or broad public policy concerns to deny recognition or to delay enforcement; recent jurisprudence from Iran’s Supreme Court (2024) evidences incremental clarification but does not eliminate uncertainty. Other enforcement hurdles include ambiguities in statutory definitions (e.g., what counts as “international” or “public” property), procedural barriers (jurisdictional review, limited discovery, availability of interim measures), state immunity claims, and the impact of extrajudicial factors such as international sanctions and political relations. The article analyses doctrinal debates, major statutory provisions, representative case law and evolving administrative practice, and proposes targeted reforms statutory clarifications, issuance of implementing regulations, internal approval protocols for article 139 matters, judicial training, and treaty-level initiatives to reconcile Iran’s commitment to arbitral enforcement with legitimate public-order and sovereignty concerns while improving predictability for foreign investors and creditors.