Mediation in Iran

Quick Facts

• Legal Framework: Mediation in Iran follows Articles 454 to 501 of the Civil Procedure of General and Revolutionary Courts Act, which provide framework for arbitration and alternative dispute resolution. Parties may re...
• Cultural Approach: Dispute resolution through trusted third party is deeply rooted in Iranian culture, reflecting Islamic principles of reconciliation and mediation. The cultural preference for harmony and maintaining r...
• Typical Costs: Mediation and reconciliation through Dispute Resolution Councils/Peace Courts may be available at reduced or subsidized costs as part of court system. Private mediation through institutions like TRAC ...

Mediation Research

Legal Framework

Mediation in Iran follows Articles 454 to 501 of the Civil Procedure of General and Revolutionary Courts Act, which provide framework for arbitration and alternative dispute resolution. Parties may refer their cases before or after bringing them to court to arbitration by agreement with agreed terms and conditions. Upon parties' agreement and death or incapacity of any of them, the arbitration is nullified. Commercial proceedings are primarily governed by the Civil Procedure Code 2000 (CPC) and the Law on Formation of Public and Revolutionary Courts 1994 (with latest amendments as of 2014). The Law on Dispute Resolution Councils 2023 provides for mediation and reconciliation through Dispute Resolution Councils (DRC), which were replaced by Peace Courts in 2023. Article 15 of the Law on Dispute Resolution Councils 2023 allows civil courts to advise disputing parties to try to settle disputes through alternative methods before the DRC, although parties may decide to continue litigation.

Court System

Courts in Iran may advise parties to try to settle disputes through alternative methods before Dispute Resolution Councils (DRC) or Peace Courts. Civil courts upon referring any kind of civil dispute may advise disputing parties to try to settle their disputes through alternative methods before the DRC, although parties may decide to continue litigation. Parties to a dispute can settle at any stage during proceeding, or request from court to provide time extension to negotiate settlement. If successful, a binding settlement agreement may be entered into before a public notary office or the court. The Tehran Specialized Courthouse for Commercial Disputes (Commercial Court) established 16 November 2020 hears commercial disputes. According to Article 6 of the Guideline for Establishment of Commercial Court, it has jurisdiction over claims arising from sale of goods, formation/merger/wind-up/bankruptcy of commercial companies, and all matters relating to arbitration such as appointment of arbitrators, annulment, or enforcement of arbitral awards.

Mediator Regulations

Mediation and reconciliation in Iran are not institutionally structured or statutorily regulated in the same way as arbitration. Dispute Resolution Councils (DRC), now replaced by Peace Courts in 2023, handle mediation and reconciliation efforts for civil or criminal cases at pretrial stage. The Law on Dispute Resolution Councils 2023 governs their operation. Professional mediators operate through institutions like Tehran Regional Arbitration Centre (TRAC) and Arbitration Centre of Iran Chamber of Commerce, Industries, and Mines (ACIC). TRAC has Mediation Rules providing institutional framework for mediation. Arbitration is more regulated with Articles 454-501 of Civil Procedure Code governing domestic arbitration. Mediator training and accreditation are not as systematically regulated as arbitration.

Cultural Approach

Dispute resolution through trusted third party is deeply rooted in Iranian culture, reflecting Islamic principles of reconciliation and mediation. The cultural preference for harmony and maintaining relationships supports mediation adoption. Iranian culture emphasises compromise and settlement through dialogue. However, the use of ADR in its modern notion is still developing within business community in Iran and broader region. Traditional dispute resolution methods based on community elders and religious principles remain influential. The combination of traditional values with modern legal framework provides foundation for mediation development, though institutionalization is still evolving.

Typical Costs

Mediation and reconciliation through Dispute Resolution Councils/Peace Courts may be available at reduced or subsidized costs as part of court system. Private mediation through institutions like TRAC and ACIC charges fees based on case complexity and mediator expertise. Arbitration fees are determined by institutional rules or party agreement. The cost savings compared to litigation are significant, particularly for commercial disputes. Iran's accession to United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards 1958 provides confidence for international arbitration. The emphasis on efficiency and reducing court backlog encourages timely dispute resolution.

States and Regions