A Critical Analysis of the Arbitration Clause in Land Utilization Allocation Contracts of the Industrial Estates Company, with Emphasis on the Approach of the Judiciary

The land utilization allocation contracts of the Industrial Estates Company are adhesion contracts, whereby applicants, by signing them, adhere to the terms and conditions contained therein—including the arbitration clause.. In the event of contractual non-performance (such as failure in construction, operation, or installment payments) by either party, the Industrial Estates Company refers its claims regarding contract termination, eviction, and demolition to the Iran Small Industries and Industrial Parks Organization, designated as the arbitral authority for appointing a representative. Subsequently, the representative of the mentioned organization issues an arbitral award, which often becomes the subject of judicial annulment claims in courts. This article provides a critical analysis of the arbitration clause in land utilization allocation contracts of the Industrial Estates Company, with a focus on the approach of the judiciary. The clause is examined in light of compliance with the legal requirements of Article 139 of the Constitution and Article 457 of the Civil Procedure Code of the Public and Revolutionary Courts (2000), as well as principles of arbitrator independence and impartiality (being a third party, being independent, not being subordinate, etc.). It also explores the clause’s subordination to the contract, and the issue of unfair arbitration terms, based on a descriptive-analytical method using library resources and analysis of judicial decisions. The findings of this research emphasize the necessity of complying with Article 139 of the Constitution and Article 457 of the Civil Procedure Code in such contracts, ensuring the independence and impartiality of arbitrators, recognizing the subordination of the arbitration clause to the contract (especially in cases of contract dissolution), and the need to adjust arbitration clauses to make them fair and reflective of the parties’ intentions.