Investment Disputes and Art.139 of the Iranian Constitution

By Ali Darzi and Dr. Sajad Soltanzadeh / Publisher: Swiss Arbitration Association (ASA Bulletin)

1.             Introduction***

The lifting of sanctions against Iran, as a result of the Joint Comprehensive Plan of Action (JCPOA) between Iran and China, France, Russia, the United Kingdom, and the United States; plus Germany (P5+1), has created many opportunities for foreign investment. In this new context, a necessary first step for foreign investors wishing to enter Iran’s huge market, is to give a careful thought to the different aspects of foreign investment including the legal environment of Iran.

Considering varying theories and practices on determining the impacts of Article 139 on foreign investment dispute settlement provisions in Foreign Investment Promotion and Protection Act (FIPPA)[1] and Iranian investment treaties, should a dispute arise between a foreign investor (FI) and the Iranian government, the scope of application and consequences of the article 139 have led to uncertainty with regard to the future of investment disputes for FIs. This paper endeavours to clarify these ambiguities and provide a clear direction for future potential disputes on foreign investment in Iran by considering existing practices as closely as possible.


2.             Article 139 of the Constitution law, the FIPPA and Iranian Investment Treaties

The constitution of Iran, in force since 1979, includes a significant provision on the resolution of disputes over public and state properties. Article 139 reads as following: ……..


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*** Disclaimer: This paper aims to analyze the legal environment of foreign investment in Iran as perceived by the contributors only and is not intended to provide any form of legal advice to foreign investors. It is strongly advised that any specific requests regarding investment in Iran should be addresses to competent legal advisors on a case-by-case basis.

[1]     Law of Foreign Investment Promotion and Protection (FIPPA), has been approved on 10 March, 2002, which is available at:


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