Force Majeure under Iranian Law in light of the International Sanctions imposed on Iran
This article has been prepared by Iran Best Lawyer in order to provide you with the definition and concept of “force majeure” under Iranian legal system.
Force Majeure
First of all, it should be noted that the Iranian laws and regulations, except for Articles 227[1] and 229[2] of the Iran Civil Code, which without referring to the term “force majeure” only regulates the circumstances under which the contracting parties may not be deemed liable for non-fulfilment of the contract, are silent on the definition and main elements of a force majeure event. Therefore, refer shall be mainly made to the applicable legal doctrine in this regards.
The main applicable doctrine of force majeure recognizes three main elements for an event in order to be deemed as “force majeure” which are as follows:
- The event shall be unpredictable;
- The event shall be unavoidable; and
- The event shall be external.
a) Unpredictability
An event for being considered as a force majeure shall not be predictable for the contracting parties at the time of conclusion of the contract, because in case the parties are able to predict the event which may lead to non-performance of their obligations resulting from their contract, they should take different measures in order to reduce the effects of such event or they may avoid the conclusion of a contract which they believe may not be fully performed due to an event.
In the present case, we may believe that re-imposition of U.S. sanctions despite i) existence of a multilateral binding treaty (i.e. the JCPOA) between U.S., Iran and EU member states, and ii) Iran’s compliance with its obligations under such agreement, may be deemed as an unpredictable event which the parties to the JVA could not predict at the time of its conclusion. In other words, prediction of unilateral breach of a binding multilateral agreement, while it is being performed and respected by all its signatories, seems quite difficult.
In addition, since the International Atomic Energy Agency regularly certified Iran’s compliance to its policies with regards to the JCPOA from the time of its signature to date, the contracting parties to such agreement, could not predict its unilateral termination by the U.S. notwithstanding persistent compliance of all signatories.
Further to the foregoing, at the time of conclusion of the JVA, right after the signature of the JCPOA, Obama’s administration certified Iran’s compliance and sanction waivers as well as Trump’s administration except for the last time in which he failed to certify the deal and re-imposed the sanctions. Therefore, it could not be foreseeable, at the time of conclusion of the JVA and other ancillary agreements, for the contracting parties, that 2 years after the signature and regular certification of the JCPOA, such agreement may be terminated by one of its signatories (i.e. The U.S.).
However, as the concept of force majeure is such a vague and unclear concept under Iranian law, the courts may not, easily, accept for re-imposition of sanctions to be deemed as a force majeure. Accordingly, the element which may be subject of dispute for the Iranian courts may be interpretation of sanctions as an unpredictable event.
In this context, the courts may decide that as the parties who entered into the JVA were doing so after a long isolation period during which the country was sanctioned by the US, EU and UN, and due to the geopolitical status of this country, such parties should have born in mind the political risks of contracting in such country and in such a sensitive post-sanction era. Thus, the courts may decide that re-imposition of U.S. sanctions, even after signature of the JCPOA, could not be unpredictable for the parties at the time of conclusion of the JVA and other relevant agreements.
Click on the link below to read more:
Force Majeure under Iranian Law in light of the International Sanctions
Comments
Post a Comment