Document Type : Research Paper
Authors
1 Ph.D. Student in Private Law, Faculty of Law, University of Qom, Qom, Iran.
2 Professor, Department of Private Law, Faculty of Law, University of Qom, Qom, Iran.
Abstract
The check, as a key instrument in facilitating economic transactions and securing payments, holds a central role in Iran’s legal system. However, challenges in recovering claims due to the issuer’s refusal to honor the check have created significant issues. Through the 2018 amendment to the Check Issuance Law and the introduction of Article 23, the legislature established a mechanism for issuing judicial writs of execution without adversarial proceedings to expedite claim recovery. Nevertheless, ambiguities in Article 23 regarding the nature of judicial enforcement, the process of suspension and annulment of the writ, and the jurisdiction of competent authorities have led to inconsistencies in judicial practice and legal doctrine. This study aims to provide a legal analysis of the judicial enforcement and annulment of Sayadi checks, examining Article 23 and related judicial practices to address the following questions: What is the nature of judicial enforcement of checks? How does the suspension and annulment process function? Which authorities are competent? How effective is Article 23? What are the solutions to its ambiguities? And how does Article 23 align with the principles of commercial instruments? The ultimate objective is to offer a legal analysis and interpretation to resolve ambiguities and discrepancies in doctrine and judicial practice and to elucidate necessary legislative reforms.
Methodology
This study employs a descriptive-analytical method, relying on theoretical, legal, and comparative approaches to analyze the subject. The legal framework includes Article 23 of the 2018 Check Issuance Law Amendment, Articles 8 and 39 of the Civil Judgments Enforcement Law, Note 3 of Article 5 Bis of the Check Issuance Law, and the Dispute Resolution Councils Law (enacted 13/9/2023). The nature of judicial enforcement is examined through a comparative analysis with Article 14 of the Check Issuance Law, Article 11 of the Civil Judgments Enforcement Law, and non-judicial execution. Data were collected from statutes, judicial decisions (including rulings from the Supreme Court and civil courts), advisory opinions from the Judiciary’s Legal Department, and doctrinal studies. Jurisprudential principles (e.g., “reconciliation is preferable to rejection whenever possible”) and legal principles of commercial instruments (e.g., the principle of abstraction) were applied to address ambiguities.
Findings
Article 23, by enabling the issuance of judicial writs of execution without adversarial proceedings, transforms Sayadi checks into judicially enforceable instruments, offering greater efficiency than non-judicial execution through the Civil Judgments Enforcement Law. However, ambiguities in its nature, jurisdiction, and suspension and annulment processes pose challenges. Judicial enforcement of checks is an exceptional institution combining judicial (issuance by a judge) and administrative (expedited issuance) characteristics, subject to challenge through substantive claims. Article 23 recognizes any civil claim or criminal complaint related to the check (e.g., conditional or guaranty checks or offenses) as grounds for suspension, but the absence of a time limit for objections creates opportunities for abuse. The new Dispute Resolution Councils Law (2023) clarifies the relative jurisdiction of the Peace Court (for financial claims up to one billion rials) and the General Civil Court (for amounts exceeding this threshold), with Uniform Procedure Ruling No. 688 (2006) granting the holder discretion to choose the venue (place of issuance, payment, or defendant’s domicile). Article 23 claims are illustrative and are adjudicated by the Peace Court, General Civil Court, or criminal authorities based on jurisdiction. The abstraction principle of commercial instruments limits claims to holders with bad faith or direct holders. Suspension requires a substantiated claim, a suspension request, and a finding of strong likelihood or irreparable harm, but ambiguities in these criteria have caused judicial inconsistencies. Independent claims for suspension or annulment are inadmissible, with annulment being a consequential effect of the main action.
Novelty (Value)
This study addresses gaps in prior research by elucidating the distinct nature of judicial enforcement of checks and, through a comparative analysis of Article 23 with Articles 14 and 11 and non-judicial execution, clarifies their distinctions and complementarity. It updates jurisdictional frameworks under the new law, highlights limitations on claims against good-faith holders, and establishes the inadmissibility of independent suspension and annulment claims. Its reform proposals enhance the study’s practical value.
Conclusion
Article 23 of the 2018 Check Issuance Law Amendment introduces an innovative and effective mechanism for expediting claim recovery and reinforcing the role of Sayadi checks in commercial transactions. By transforming checks into judicially enforceable instruments and leveraging the Civil Judgments Enforcement Law (e.g., enabling debtor detention), it distinguishes itself from non-judicial execution and enhances trust in checks. However, ambiguities in the nature of the writ, jurisdictional competence, suspension criteria, and scope of claims have led to significant inconsistencies in legal doctrine and judicial practice. The Dispute Resolution Councils Law (2023) resolves prior conflicts by eliminating the jurisdiction of Dispute Resolution Councils, assigning relative jurisdiction to the Peace Court (for financial claims up to one billion rials) and the General Civil Court (for amounts exceeding this threshold). By analogy with Uniform Procedure Ruling No. 688 (2006), the holder may choose the venue (place of issuance, payment, or defendant’s domicile). Any civil claim or criminal complaint related to the check—such as claims of conditional or guaranty checks (civil claims) or offenses like fraud or breach of trust (criminal complaints)—may serve as grounds for suspending the writ, but these claims, depending on their financial threshold or criminal nature, are adjudicated by competent authorities (Peace Court, General Civil Court, prosecutor’s office, or criminal court). The abstraction principle (derived from Article 249 of the Commercial Code) restricts such claims to holders with bad faith or direct holders, safeguarding good-faith third-party holders and supporting trust in check circulation. Suspension of enforcement requires filing a relevant claim, a suspension request, and a judicial finding of strong likelihood or irreparable harm by the issuing court, yet ambiguities in defining “strong likelihood” and “irreparable harm” have caused judicial inconsistencies. Independent claims for suspension or annulment are inadmissible, with annulment being a consequential outcome of the main action, effected by the issuing court after the claim’s finality, pursuant to Article 39 of the Civil Judgments Enforcement Law and Note 3 of Article 5 Bis of the Check Issuance Law. To address these challenges, the legislature should amend Article 23 to: clarify the distinct nature of the judicial writ as an exceptional institution with judicial and administrative features; explicitly define the jurisdiction of the Peace Court and General Civil Court; articulate suspension criteria (e.g., defining strong likelihood and irreparable harm); and precisely delineate the scope of claims using terms like “any civil claim or criminal complaint related to the check.” Eliminating unrelated claims (e.g., loss or forgery) given the Sayad system and establishing a mechanism for refunding amounts post-annulment would enhance Article 23’s efficiency, balance the rights of holders and issuers, and promote coherence in the legal system governing commercial law, civil judgment enforcement, and principles of commercial instruments. These reforms would strengthen trust in Sayadi checks as a reliable tool in economic transactions and prevent potential abuses.
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