Iranian High Court Rules on delayed Payment Compensation respecting Bad Checks

Nouraei & M. Mostafavi Law Offices – 23 June 2021-Tehran- Seeking compensation for damages has been foreseen in the Iranian Civil Code, Civil Procedure Code and the corresponding Note to Article 2 of the Check Law, approved in 1976, with subsequent amendments.

Checks are widely used as instruments of payment in the Islamic Republic of Iran. Foreigners transacting business with Iranians or having a commercial presence within the territory of Iran will likely find themselves resorting to this financial instrument. However, one of the main issues in seeking compensation for delay in payment of the sum of bad checks, previously had been whether the compensation began from the actual date of the issuance of the check or when the check was presented to the related bank and the certificate of non-payment was provided by the bank due to the insufficiency of the sum in the current account of the issuer.

Now, the High Court of Iran has resolved the problem by ruling that the date of issuance of the check must be considered the starting point for seeking  compensation for delay in payment. The verdict of the High Court, which is obligatory for all Iranian courts of law, was published today (23 June, 2021) by Mizan News Agency, an affiliate to the Judiciary Power.

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