Majlis

Iran’s commercial code reform invites turmoil

Al-monitor | : After years of delay, Iran’s parliament suddenly approved 331 articles of the first book of a massive trade reform bill in just one week in mid-September. This came as a surprise to many economic and legal analysts and raised concerns about the fate of the remaining four commercial code books awaiting lawmakers’ final verdict.

To highlight some major disadvantages of the bill, it is fairly argued that it’s fraught with myriad ambiguous terms that are open to misinterpretation and prone to conflict with the country’s business procedures. Among these ambiguities is the bill’s introduction and application of common law, which often uses references to precedents rather than strictly statutes. That hasn’t been the case in the current commercial code of Iran.

Implementation of common law requires specific mechanisms and conditions that ought to be defined in plain words for judges who might otherwise not be well-versed in business terminology and procedure. Additionally, critics say the bill’s complexity and ambiguity could increase the judiciary’s authority. Since judges are not fully aware of all the mechanisms related to corporate law, applying common law concepts in settling conflicts would most probably complicate the legal procedures.

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