Order of “Securing the Demand” and “Provisional Injunction” under Iranian law – PART 1
Whenever incidental or urgent matters arise, Claimant or Plaintiff may request the court to issue a writ (i.e. interim order) of “Securing the Demand” and “Provisional Injunction”.
The general preamble of “Securing the Demand” and “Provisional Injunction” in Iran
To issue a final decision, the judge must follow the court’s procedures. Sometimes, a proceeding may take longer than the applicant expects due to various factors. Events or incidents that may occur during this period may result in losses for the claimant or plaintiff.
In order to prevent the above, Iranian law provides some ancillary legal tools categorized under the general terms of “writs of security and temporary measures”.
Orders and measures of this type are used both in civil and criminal proceedings. There is a place for the application of two legal ancillary tools, the order of “Securing the demand” and “Provisional injunction”, especially in incidental matters or when an urgent matter requires immediate attention. Despite their similarities, these tools have important differences and should not be treated as identical.
This article is divided into two parts. In part number one, we first discuss the concept of the verdict, then the order of “Securing the demand” under Iranian law and related legal provisions.
In addition to the above, we will examine the conditions and process of issuing an order of “Securing the demand” in civil procedure, protesting this order by the aggrieved party, and the legal elements of nullifying its effect. The order of security for cheques and promissory notes, and the order of “Securing the demand” under criminal law are the other main topics of the first part of this article.
In part number two, we will discuss the provisional injunction under Iranian law and describe the relevant legal provisions. There, in addition to mentioning the conditions and process of issuing a provisional injunction and the method of protesting or removing its effect, we also describe the provisional injunction in the Court of Administrative Justice and provisional injunction under the criminal procedure, finally, we compare the order of securing the demand and the provisional injunction.
Different types of court verdicts under Iranian law
Article 299 of the Civil Procedure Code of Iran (the “CPCI”) states that: “If a court’s decision is substantive and definite, whether in part or in full, it is called a verdict, otherwise it is called an order or a writ.”
As both “securing the demand” and “provisional injunction” does not determine the nature of a lawsuit, they are not substantive in nature and do not necessarily resolve the case, either partially or completely. Therefore, they are outside the scope of a ‘verdict’ and are considered urgent affairs by CPCI due to their functions. “Provisional injunctions” are more widely applicable than orders of “Securing the demand” in practice.
Order of security in civil proceedings under Iranian law
In the CPCI, Securing the Demand is under the incidental affairs section and includes articles 108 to 129 of that Provision.
According to Article 108 of the CPCI: “It is the claimant’s right to request the court for relief in the following instances before submitting the petition, during the proceedings, or until a definitive verdict is issued. The court is obliged to accept such requests”:
a- The lawsuit shall be supported by an official document
b- The demand is under the risk of being damaged or wasted.
c- In cases such as protested commercial deeds, the court is obliged to accept the request for security according to the law.
d- The claimant shall pay the damages that may be caused to the other party in cash to the judiciary fund.
note- It is the court that accepts the order of “Securing the demand” that determines the amount of eventual damage based on the amount of the demand. The issuance of this order will be deferred until the damages have been deposited.
“An order of Security” is a precautionary measure taken to prevent the transfer of a defendant’s property or to prevent the defendant from running away from debt until the conclusion of the legal proceedings. In general, security refers to the seizure of movable and immovable property during legal proceedings (the “Security”).
Iranian Legislators also embedded a form of “Securing the Demand” in the Civil Law. According to article 218 repeated of The Civil Law: “If the creditor submits a petition to the court and presents reasons that the debtor intends to sell their property to escape the debt, the court can order the seizure of debtor’s property to the amount of their debt, in which case debtor will not have the right to sell the property without the permission of the court.” According to Iranian jurisprudence, obtaining Security lesser than the amount of judged debt is a violation. Also, it is a violation for the president of the public court to issue an Order of “Securing the Demand” without the request of the claimant.
Order of “securing the Demand” issuance conditions
The basic yet most important conditions for issuing an order of “securing the demand” are the same as those mentioned in Article 108 of CPCI. It’s notable that the phrase “following instances” in this article means that the existence of the total listed clauses isn’t necessary and of each of these clauses alone causes fulfillment of conditions. In the following, we see that according to Article 113 of the CPCI:
“The request for order of “Securing the demand” is accepted if the requested amount is known or a specified object (The main claim of the case: specified property, whether movable or immovable, with monetary valuation capability). If the claim is supported by an official document, the judge will issue an order “Securing the demand” without receiving a damage fee, otherwise, the claimant must deposit that fee (an amount determined by the judge) in the judicial fund before the order can be issued. After issuing the order of “securing the demand”, it is possible to confiscate all the person’s property (movable and immovable, bank funds or with third parties).”
Of course, according to Article 122 of CPCI, “If the claim is a specified object and its seizure is possible, the court cannot seize another’s property instead”. Article 123 adds that: “If it cannot be confiscated or if it is not specific, its equivalent can be confiscated from other properties of the defendant.”
Eventual Damages for Claimant
According to Article 109 of CPCI In all kinds of civil lawsuits, except the cases in which the claimant, in accordance with the law, has no option but to refer to the court, the Defendant can request financial security amounting to the cost of proceedings and attorney’s fee imposed to him due to the lawsuit initiated by the claimant. After having reviewed the type, status, and other factors regarding the case, the court will issue this order if it deems the request to be justified and legitimate. The proceedings will be at a halt until the claimant provides for the above-mentioned Security.
The claimant’s petition will be dismissed at the request of the defendant if the claimant doesn’t comply with this order within the specified time period mentioned in the court order. Although according to the note of said article: “If it is ascertained by the court that the purpose of filing a lawsuit is to delay the fulfillment of a commitment or to annoy and harass the counter-party or to act maliciously, the court is obliged to impose a fine to the petitioner equal to the three times of the cost of the proceedings in favor of the government while issuing a verdict or writ.
Order of “Securing the Demand” issuance process
According to Article 111 of the CPCI: “The request for security is made from a court that has the jurisdiction to hear the case”. The claimant must prepare their request in a petition and register it through the judicial service offices. After determining the competent branch according to Article 115 of the CPCI, “The manager of the branch office must immediately inform the court about the request for the order of “Securing the demand” so that the judge can examine the reasons without warning the defendant to reject or issue an order of securing the demand”. According to article 117 of the CPCI, “Order of “Securing the demand” shall be immediately communicated to defendant and be executed after. In cases where immediate notification is not possible and delay in execution causes damage and excess, execution will be arranged first and then it will be communicated.”
Of course, the claimant must be careful about the deadlines set for them, as stated in Article 112 of the CPCI, “If the claimant does not file a petition regarding the main claim within ten days from the date of issuance of the order of security, the court will cancel the order at the request of the defendant”.
Objection to Order of “Securing the Demand”
According to Article 116 of the CPCI: “The order of securing the demand is notified to the litigant, the named party has the right to object to this order within ten days. In the first session, the court hears the objection, issues that order or rejects it”.
It is sufficient for the litigant to protest against an order of “Securing the Demand” in the simple form of a request and it does not require filing a formal petition and payment of the court fee. The first session refers to the first hearing session after the objection.
According to Article 119 of the CPCI: “The decision to accept or reject a request for an order of securing the demand cannot be appealed”.
The order of “Securing the Demand” is not subject to review, retrial, or appeal, but it could be challenged by a third party without the necessity of payment of the court fee.
Nullifying an order of “Securing the Demand”
According to Article 118 of the CPCI: “If the cause for the issuance of a writ of securing the demand gets eliminated, the court will order the security to be lifted. In case of issuing a final verdict against the claimant or returning the lawsuit or the petition, the order of securing the demand will be automatically resolved”.
Also, according to Article 120 of the CPCI, “Should the order securing the demand be executed and the claimant’s right in the matter is not proven or they’re sentenced to a nullity of suit by a final verdict, the defendant has the right to request damages as a result of that order by submitting their reasons with the request to the court within twenty days. In this case, the claim for damages is made without favoring the formalities of civil procedure and paying legal fees”.
“The content of the request is communicated to the other party. This is so that if they have a defense, they can state it with reasons within ten days from the date of notification. In extraordinary times, the court hears the arguments of the parties and issues an appropriate verdict. This vote is final. If the defendant does not claim damages within the stipulated time limit, the money deposited for eventual damages will be returned to them at the request of the claimant”.
Obtaining Security from foreigners under Iranian law
Articles 144 to 148 of the CPCI, are assigned to this matter under the same title as part of the incidental affairs section.
According to Article 144: “Subjects of foreign states, whether they are the main claimant or enter the lawsuit as a third party, upon the request of the defendant shall deposit an appropriate guarantee to pay damages that the defendant may be sentenced for due to the cost of proceedings or attorney fees. The request to obtain security is accepted until the end of the first hearing and only from the defendant who is a citizen of Iran”.
If foreigners file a counterclaim against the main demand of the counter-party, the latter is not entitled to request the above-mentioned Security.
Exceptions are mentioned in Article 145 of the CPCI for this order. Also, in Article 146 of the CPCI, the issue of discovering a non-Iranian claimant during the proceedings is discussed, in Article 147 of the CPCI, the issue of not paying the security fee, and in Article 148 of the CPCI, the issue of insufficient security.
The rest of the matters for an order of securing the demand in lawsuits where one party is a foreigner but none of these articles (144-148 CPCI) apply, will be treated according to the general principles of an order of securing the demand.
In the case of failure to provide Security by the claimant, the case will be rejected by the court of first instance or the court of appeal, upon the request of the defendant.
The deadline for the provision of Security will be decided by the court by considering the terms of the case. For the determination of the amount, the financial status of the person must be taken into account. The decision of the court regarding the amount and deadline of the mentioned Security cannot be appealed.
Order of “Securing the Demand” for Commercial Deeds under Iranian Law
Generally, when a lawsuit is established on the basis of a bounced and dishonored “Commercial Deed” (i.e., Banking Cheque, Promissory note, or Bill of Exchange), in case of their dishonor the court will issue an Order of “Securing the Demand” without taking Security for eventual damages.
According to Article 110 CPCI: “In Lawsuits evidenced by Cheque, Promissory note, Bill of exchange and Official documents and lawsuits against insolvent and bankrupt, the defendant can’t request Security for eventual damages.” There is no difference between the issuer, guarantor, or the endorser of a deed, their request for taking Security for damages will be rejected.
Article 114 CPCI: “Issuance of “Securing the Demand” order can be requested about a Debt or a specific property for which its due date hasn’t come yet. The claimant’s right in these claims should be evidenced by an official document (i.e., a notarized document) and be at the risk of waste.” This article is an exception to Article 112 CPCI which is applicable to Commercial Deeds.
Order of “Securing the Demand” in criminal proceedings under Iranian law
The order of “securing the demand” is also applicable in criminal proceedings. For this purpose, the legislator has assigned articles 107 to 113 of the criminal procedure law, under the duties and powers of the investigator in the first topic (the powers of the investigator and their limits).
If the plaintiff suffers losses due to the commission of a crime, they may request the issuance of an order “securing the demand” both at the prosecutor’s office and at the court stage, simultaneous with the notification and, if the notification is urgent, prior to the notification regarding the execution and confiscation of the defendant’s property without paying for subsequent damages. The judge can issue an order “securing the demand” even if the plaintiff has not filed a petition for damages and loss. If the petition for damages and loss is not granted before the end of the proceedings, the court will provide relief from the order at the defendant’s request. Following the final decision and its implementation, the effect of the issued order of “securing the demand” will be removed if the case is closed for any reason, including the issuance of a restraining order or suspension of prosecution.
If you have any questions about writs, orders and injunctions under Iranian law, especially provisional injunctions and orders of security or in need of help for your proceedings in Iranian courts, just pick up the phone and get in touch with Iran Best Lawyer. We are there for you 24/7.
