Call for Setting Up New Court for Commercial Disputes

EghtesadOnline: Economy Minister Farhad Dejpasand has called for the establishment of a new court solely to resolve commercial disputes in the city of Tehran.

News ID: ۷۸۵۱۱۷

10 December 2019

In a letter to Ebrahim Raeisi, the head of Iran’s Judiciary, Dejpasand said such a move will improve the country’s ease of doing business ranking, particularly the index billed as “enforcing contracts”, Mehr News Agency reported.

The World Bank Ease of Doing Business Report measures the efficiency of the judicial system in resolving a commercial dispute and the quality of judicial processes.

According to its latest report, Iran ranks 90th among 190 economies in enforcing contracts with a score of 58.2, indicating no change over previous year. Contract enforcements in Iran take 505 days and cost 19.3% of the value of the claim, Financial Tribune reported.

The economy scores five out of 18 on the quality of judicial processes index.

“The creation of a judicial center to exclusively resolve commercial disputes in the capital city will directly add 3.7 points to Iran’s contract enforcements sub-index; the quality of judicial processes sub-index will also improve by two points. All in all, the country’s enforcing contracts index will improve by 21 ranks. The move will have significant impacts on improving business environment indirectly by shortening delays in resolving commercial disputes,” the minister said.

Over the past decade, governments have increasingly turned to World Bank's Doing Business reports as a repository of actionable, objective data providing unique insights into good practices worldwide as they have come to understand the importance of business regulation as a driving force of competitiveness.

Iran’s ease of doing business score has seen a decline of 0.1 percentage point, though its ranking among 190 economies in the World Bank’s Ease of Doing Business Report 2020 improved by one place to 127th.

The country’s overall distance to frontier score is 58.5, compared to last year’s 58.6. An economy’s distance to frontier is indicated on a scale from 0 to 100, where 0 represents the lowest performance and 100 the frontier.