During recent years, there have been many court judgments and arbitration awards rendered against Iraqi government entities arising from contracts concluded during Saddam's regime. The question of the enforcement of such awards remains a matter of concern for the creditors.
Iraq is not a party to the New York convention for Enforcement and Recognition of Foreign Arbitral Awards nor to any other international convention concerning enforcement of foreign judgments, except those concluded between the members of the Arab League and a few bilateral agreements.
The enforcement of foreign judgments is subject to Iraqi Law no. 40 of 1980 on Enforcement, as well as the Law no. 30 of 1928 as it will be dealt with here below.
The Iraqi Law for Enforcement no. 40, 1980 has laid down detailed procedures for the enforcement of judicial awards as well as for specific commercial documents and other deeds.
Article 3 of Law 45/1980 states that the Law applies to foreign judicial decisions, which become enforceable in Iraq, subject to any applicable international agreement.
Article 12 of Law 45/1980 states that no foreign judgment will be enforceable in Iraq, unless it is deemed enforceable in accordance with Law 30/1928, or with an international agreement.
The Iraqi Law for Enforcement of Foreign Judicial Awards no. 30 of 1928 sets out the conditions for enforcement of foreign judicial decisions. Iraq has also entered into a few bilateral agreements for enforcement of judicial awards as well as into a number of Arab League Conventions for judicial cooperation.
In other words, enforceability of foreign judicial awards in Iraq is limited to such foreign awards that qualify for enforcement under Law 30/1928 for Enforcement of Foreign Judicial Awards.
Article 11 of Law 30/1928 states that it applies only to:
- foreign judgments issued in a country that has a bilateral agreement with Iraq,
- and if such country is specifically named by Iraqi regulations issued by the government,
- and subject to a condition of reciprocity.
The court of Cassation1 stated that in order to apply Law no. 30/1928, specific regulations must exist authorising the enforcement of judicial awards issued in a specific country.
The government has issued a limited number of regulations permitting the enforcement in Iraq of judicial wards issued by certain countries, subject to the conditions of Law no. 30/1928. These countries include U.K., Italy, Canada, India, Pakistan, Cyprus and others. Saudi Arabia and Kuwait are covered by the Arab League Conventions.
Final judgments rendered by the Courts in England are in principle enforceable in Iraq in accordance with the Regulations no. 21 of 1928 concerning UK judgments.2
Procedures under Law No. 30/1928
Under Law no. 30/1928 a foreign judicial award must be approved for enforcement by a competent Iraqi Court, subject to a number of restrictive conditions, as discussed below.
An application requesting enforcement by a court decision (an execution order) must be filed with the civil court of first instance at the location of the defendant's residence.
A duly legalised and translated copy of the foreign court's original judgment should be attached to this application. The foreign judgment must state the reasons upon which the decision is based.
The court will set a date for a hearing, summon the defendant to the hearing, and hear the pleadings of both parties. If the court is satisfied that the judgment fulfils the conditions and requirements of Law no. 30/1928, it may issue an execution order to enforce the award (articles 4 and 5).
Conditions for Enforcement
In order to be enforceable, the foreign award must satisfy the conditions stated in articles 6, 7, and 8 of Law no. 30/1928. Whether or not the defendant raises objections, the court of its own accord will examine the case to see whether it meets the said conditions, including that the foreign judgment is final (res judicata) and enforceable in the foreign country where it was issued.
Furthermore, the court may reject the application if it finds that the judgment was obtained fraudulently, or if the hearing in the foreign courts was irregular or contrary to the principles of equity and justice, or public order, as stated in article 8 of Law no. 30/128.
Conformity with the principles of equity, justice, and public order is a vague criterion, and under political and administrative pressure, it may be used to disqualify a foreign judgment from enforcement.
If the conditions, as laid down in articles 6 and 7 are satisfied, the court is bound to issue the "Execution Order", and thus has no right to enter further into the merits of the case. The court may either accept the enforcement of the foreign judgment and issue an execution order or reject enforcement. It is not entitled to change the foreign judgment, and the Defendant may not resubmit old defences or any new defences.3
Criteria for Jurisdiction
One of the conditions for enforcement is that the foreign court had jurisdiction.
Article 7 of Law no. 30/1928 specifies certain criteria for establishing the jurisdiction of the foreign court that rendered the judgment; the presence of any one of these criteria is sufficient to establish that the foreign court that rendered the judgment had jurisdiction:
It is pertinent to note that the Law for Enforcement no. 30/1928 makes no reference to the enforcement of arbitral awards. Notwithstanding that, and in my opinion, a foreign arbitral award, which has become enforceable by a decision of a court in the country where the arbitration took place, may be enforced in Iraq, subject to the provisions of the Law no. 30/1928.
For Iraq, in order to attract foreign investment, it is of utmost importance to join the 1958 New York Convention, and to make the necessary legislative amendments in its present laws in order to facilitate enforcement of foreign court judgments and arbitral awards.
1. In decision no. 364/First Enlarged Chamber/985/1986
2. See Jumaa Al-Rubaie – Guide to Civil Litigations, Baghdad, 2008, p. 319-320
3. See Awni Al-Fakhri, International Jurisdiction of Iraqi Courts and Enforcement of Foreign Judgments, pages 105-106
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.