The necessity of submitting of declaration letter or demand letter under Iranian law

The necessity of submitting of declaration letter or demand letter under Iranian law

Under Iranian law, a demand letter or declaration letter is a written statement prepared in accordance with the declaration letter. In Iran, it is explicitly referred to in Article 156 of the Iranian Civil Procedure Code (the “ICPC”) as one of the formal methods of demanding the rights. The necessity of submitting a declaration letter shall be studied in two different situations. In this article, we are going to discuss the matter of a declaration letter or demand letter under Iranian law.

 

The concept of a Demand letter or Declaration Letter

Note: For clarity, please note that we will use the terms “Demand Letter” and “Declaration Letter” interchangeably in this article.

According to Article 156 of the ICPC: “Anyone, prior to submission of the petition to the court, is entitled to demand his claiming rights from his counterparty through the official declaration letter provided that the due date has been reached. In general, everyone is entitled to deliver his statements regarding the promised commitments and agreements to anyone else via an official declaration letter.”

The main difference between an official letter of demand and a non-official one is that the official declaration letter will be submitted through the judiciary power. The sender will receive the official receipt of the letter that could be used as evidence before the court.

In cases where there is a legal conflict between individuals, prior to referring to the court to seek your rights from the court, you can express your request in writing through a formal letter in order to notify the counterparty demanding your rights. Under Iranian law, the above-mentioned official form is called a demand or declaration letter. Submission of a declaration letter is a mandatory prerequisite in some cases under specific rules and regulations.

Generally, there are two types of demand letters or declaration letters in Iran:

1. a) Ordinary declaration letter which could be used to notify another party regarding our exact demands. Usually, in disputes with the possibility of referring to the court, it is highly recommended to avoid submitting the ordinary declaration letter due to its fragile proof capacity.
2. b) Official declaration letter that could be referred to as a piece of official evidence before the court. According to Iranian law, in some cases, submission of the official declaration letter is a mandatory pre-requisite prior to filing a case before the court.

In this article, we discuss the official declaration letters as a critical, required document under Iranian law in more detail.

 

The primary function of the declaration letter in Iran

The declaration letter has a vital function in the process of debt recovery in Iran as the main piece of a document through which a creditor can prove the existence and the exact amount of debt before the court.

However, the function mentioned above is the most important practical advantage of an official declaration letter; its functionality could not be limited to the debt recovery process. Indeed, whenever you are willing to inform someone of a claim or a fact in a way that could be invoked before the Iranian courts, it is a first recommendation of an Iranian lawyer to do so through an official declaration letter.

Although an official declaration letter shall be communicated through judicial power, the latter does not have any liability regarding the content of the letter. The solely liable person regarding the content of the letter is its sender. Indeed, the judicial power merely acts as the formal mean of communication, and its function is limited to the amount of providing the official receipt of an accurate delivery.

Submission of a declaration letter does not need a prior formality; indeed, any person has the right to make statements about their legal affairs in a formal way, i.e., through submission of an official demand letter.

Notwithstanding the simple method of submission, you have to be very careful regarding the content of an official declaration letter due to the fact that this document could be invoked by your counter-party against you in a court of law.

 

Application of the Demand letter in the Judicial proceedings

As a widespread practice, the applicants in Iran notify the opposite party prior to filing a lawsuit before the competent court by submitting a Demand letter.

Responding to the demand letter is not obligatory under Iranian law, so the addressee of the demand letter is not obliged to respond to it; however, in some cases, an efficient response to a declaration letter could easily nullify its negative legal consequences, which could be borne on the receiver.

 

The legal status under which submission of a declaration letter is mandatory

It is not always mandatory under Iranian law to send a declaration letter; however, in some cases, it is obligatory by law to submit the note prior to filing a case before the court.

Under Iranian law, in seven cases, submitting a declaration letter is mandatory. The cases are as follows:

 

• Article 171 of the Code of Civil Procedure

According to Article 171 of the Code of Civil Procedure of Iran, in this case, the premises are entrusted to a trustee such as an employee or a servant. In general, to any other trusted person, if the latter refuses to return the bestowed property to the owner within ten days from the date of delivery of the declaration letter, the legal status of the trustee will be changed to the illegal possessor. In such a case, the owner of the property, prior to submitting a petition before the competent court, is obliged to first send a declaration letter.

 

• Articles 459 and 460 of the Civil Procedural Code

According to Articles 459 and 460 of the Civil Procedural Code of Iran, in the case that the contract refers to the arbitration as the contractual dispute settlement body, if the parties have not introduced their arbitrator or arbitrators and the appointment of the arbitrator has not been left to the court in the contract; one of the parties can appoint an arbitrator and send an official declaration letter to the other party requests asking the latter to designate its arbitrator. In this case, the other party is obliged to take action within ten days from the date of delivery of the declaration.

In general, in the case of the appointment of arbitrators, whenever required to notify the contractual party, the notification shall be submitted through a declaration letter.

 

• Article 129 of the Commercial Code

According to Article 129 of the Commercial Code, the private creditors of a partner in the General Partnership (i.e., a type of company under Iranian law with the maximum liabilities of its partners) in some circumstances can claim their credits through the dissolution of the firm. The Article mentioned above stipulates: “When a partner’s creditors are unable to obtain payment from his separate estate, and when their creditor’s share in the firm’s profits is not sufficient to meet the debts he owes to them, they may demand the dissolution of the firm (whether the latter is formed for a limited or unlimited period) subject to the condition, however, that they have to utilize a legal notification issued at least six months in advance, notified the firm of their intention. In such cases, as long as the final decree of dissolution has not been passed, the firm or some of the partners may avoid dissolution by paying the said creditors what is owed them, to the extent of the debtor’s share in the firm, or by securing their consent by any other means.”

 

• Article 13 of the Law on lessor-lessee Relations in 1977

According to Article 13 of the Law on lessor-lessee Relations in 1977: Whenever the tenant vacates the lease due to the expiration of the lease term or in cases where a lease termination order has been issued at his request, and the landlord refuses to take delivery, the tenant is required by the declaration letter to request the landlord or his legal representative to appear to receive the leased property.

 

• paragraph 9, Article 14 of the Law on lessor-lessee Relations

With respect to paragraph9, Article 14 of the Law on lessor-lessee Relations
If the lessee refuses to pay the rent within the deadline stipulated in Article 6 of this law, and by notifying the office of the regulator of the lease document or declaration letter (In cases where the lease is ordinary or there is no formal lease) did not pay the overdue installments within ten days, In this case, if the lease is official, the landlord can request from the office or the enforcement office to vacate and collect the rent.

 

• Article 10 bis of the Law on Apartment Ownership

Article 10 bis of the Law on Apartment Ownership states that if one of the owners or beneficiaries of an apartment refrains from paying the shared costs and expenses of the maintenance of the apartment, the manager of the apartment shall send a demand letter demanding the debt in details.

 

• Article 9 of the Law on the Transfer of Ownership and Administration of Industrial Estates

Regarding Article 9 of the Law on the Transfer of Ownership and Administration of Industrial Estates, if the owner or user refuses to pay the share of the common costs, the manager or the board of directors shall submit a demand letter by referring to the amount of the debt and its details.

 

• Article 284 of the Commercial Code

According to Article 284 of the Commercial Code, the holder of a bill of exchange protested for non-payment shall, within ten days from the date of protest, notifies the person who transferred the bill to him of non-payment of the bill, by submission of a demand letter or certified mail.

 

• Article 372 of the Commercial Code

Concerning the business relationship between a commission agent and a principal as defined in the Commercial Code of Iran, in the event that it is not possible to sell the goods, or if the principal has cancelled the order to sell, or the goods have been left for an unreasonable time with the commission agent, the latter may sell them by auction under the supervision of the local Public Prosecutor or his representative. When the principal is neither present nor represented in the place, the sale shall take place in his absence or in the absence of his representative. However, an official declaration letter shall previously be served on him, unless the goods are of a decomposable nature.

 

• Articles 568 and 569 of the Commercial Code

Any creditor who has not received the debt in full from a bankrupt merchant is entitled to object the request of discharge of bankrupt merchant by submission of a declaration letter attached to the proving documents to the court in charge.

 

• Articles 246 and 247 of the Bill on Amendment of the Commercial Code

According to the above-mentioned Article, in the case of committing a crime by the board of directors of a Joint-stock company, one of the members who is willing to warn the other members from the illegal and wrongful act of the board, is obliged to send his warning through an official demand letter for further relief from possible penal consequences.

 

• Articles 297 and 298 of the Bill on Amendment of the Commercial Code

In adapting the status of a joint-stock company with the provisions of the law or transforming it into another type of commercial company if one of the directors, gives a warning at a meeting of the board of directors regarding the fulfilment of the legal obligations and the other directors ignore such warning, such director who has given such a warning shall be relieved from civil and penal liabilities by submitting an official declaration letter to the other members of the board.

 

• Article 13 of the Insurance Law

In the context of an insurance contract if the insurer decides to terminate the agreement due to the false statements of the client, submission of a declaration letter to the attention of the client is mandatory.

 

• Article 42 of the Registration Law

In terms of an immovable property, whenever a protest has been registered before the Registration Office regarding the matter of ownership by a third party, the current owner who is willing to transfer the property, shall notify the potential transferee from existence of such a protest. After finalization of the transaction, the owner shall notify the protestor of the occurred transaction through submission of a declaration letter within ten days from the date of transaction.

 

• Article 43 of the Registration Law

In the context of transaction of an immovable property, if the transferor has failed to inform the Registration Office of occurrence of the transaction, the transferee is obliged to alert the transferor through a demand letter submitted by the administrative department of the Registration Office.

 

• Article 1 of the Penal Code regarding the illegal transfer of property to others

In the case of illegal transfer of the property, if the principal owner is informed of the illegal transferring, he is obliged to inform the buyer through submission of a declaration letter.

 

• In the debt recovery claims with the monetary demand

Although this is not mentioned in the law, according to the practical procedures of the Iranian courts, if the demand of a lawsuit is monetary and the debtor refuses to reimburse the market, the date of a declaration letter from the creditor to the debtor will be considered by the court as an official date of the request for reimbursement. Therefore, the creditor’s request for late payment damages will be calculated from the date of submitting the declaration letter.

 

 

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