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Iraq Ratifies New York Convention on Arbitration
On 4 March 2021, the Iraq Parliament issued the “Law on the Accession of the Republic of Iraq to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards” (“Law on Accession”) which ratifies Iraqi government accession to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York 1958) (“New York Convention”). The Law on Accession is a long-awaited development. The Iraqi cabinet agreed to endorse accession in February of 2018.
Iraq is 167th State party to join the New York Convention.
What is the significance of the Law on Accession?
Iraq’s accession to the New York Convention has the potential to facilitate and streamline the procedure for enforcement of foreign arbitral awards in Iraq.
For foreign investors, the New York Convention provides reassurance that there is a route for enforcement of foreign arbitral awards against entities with assets held in Iraq.
Without the New York Convention, the legal framework for enforcement of foreign arbitral awards was limited to the Riyadh Arab Agreement for Judicial Cooperation of 1983 (the “Riyadh Convention”) and the Enforcement of Foreign Judgments Law (No. 30) of 1928. These laws significantly limited the jurisdictions from which awards would be recognised.
Are there limiting provisions?
The Law on Accession includes three limiting provisions that should be considered:
the law will not be applicable in Iraq for arbitration decisions issued prior to the law entering into force;
the law shall not apply in relation to the recognition and enforceability of awards issued in the territory of another contracting member state, unless it is subject to a condition of reciprocity; and
the law shall only apply in the Republic of Iraq if it is in relation to disputes arising from contracts that are deemed commercial under Iraqi law.
When will the Law come into force?
The Law on Accession will come into force once it is published in the official Iraqi gazette, which is expected in short order.