Landmark Judgement by the Iranian Supreme Court; A Fresh Interpretation of Article 139 of Iran Constitution

This article analyses the Supreme Court of Iran’s landmark decision on Article 139 of the Iranian Constitution, issued on May 27, 2024. The ruling clarified the application of constitutional requirements for arbitration involving public and state-owned assets, resolving long-standing ambiguities about the timing and scope of governmental approvals. By distinguishing between the inclusion of arbitration clauses at contract formation and the referral of disputes to arbitration, the Court upheld the validity of a significant arbitration award and aligned Iran’s arbitration practices with international norms. This decision removes procedural barriers, fosters a more arbitration-friendly environment, and has far-reaching implications for privatization, foreign investment, and legislative reform. The article explores the case background, the Court’s rationale, and the broader legal and economic implications, offering a comprehensive analysis of the judgment’s impact on Iran’s arbitration landscape.