Execution of an Arbitration Agreement within the Republic of Iraq

As with any contract agreement, Arbitration is of a binding occupancy, although the Iraqi Civil and Commercial law of 1969 authorizes Arbitration Agreement parties to approach the court to rule on the dispute regardless of the Arbitration Agreement’s existence if it happens that both parties do not reject or object to this inclination, the court shall rule on the dispute and the Arbitration Agreement will be considered as null and void.

 According to Iraqi Civil and Commercial law, Article no. 253:-

• The dispute will not be heard by the court if parties collectively agree to Arbitration, the suit can only be viable in courts after its Arbitration process concludes.
• If one of the parties resorted to the court and the other party did not object to that, then the suit may be heard and the arbitration clause shall be deemed null and avoided.
• If there was an objection by the other party, then the court shall decide to postpone the suit until an arbitral award is issued.

If a party suggests having the dispute under the court ruling, and the other party does not reject or object to this approach, then the Arbitration Agreement is deemed null and void, which attributes to the Agreement is a non-binding contract. (Article no. 253/2)

The cardinal distinction between the non-binding agreement and the Arbitration Agreement is in the first agreement, any party may terminate the contract at anytime such as in the agency contract where the principal may terminate the agency towards the agent at any time, by contrast, in the latter, the Arbitration Agreement cannot be terminated by either party, however, has the advantage to approach the courts to rule on the dispute, given that neither party objects to this resolution, resulting to the Arbitration Agreement to fall null, void, and therefore, the Arbitration Agreement characteristic as a non-binding contract is visible.