Examining the Legal and Procedural Challenges of Bankruptcy Litigation in Iran in Light of Modern Standards of English Insolvency Law

Abstract

Bankruptcy is a complex and multifaceted phenomenon situated at the core of commercial law, carrying extensive economic, social, and legal consequences. The efficiency of a bankruptcy system largely depends on the transparency of its regulations, the effectiveness of judicial procedures, and its degree of alignment with modern standards of commercial law. In the Iranian legal system, bankruptcy regulations are primarily based on the Commercial Code enacted in 1932, and despite the practical significance of this institution, it faces numerous legal and procedural challenges in practice at the stages of filing a claim, judicial adjudication, and enforcement of bankruptcy judgments. The present study adopts an analytical–comparative approach to examine the legal structure of bankruptcy litigation in Iran and to analyze the most significant ambiguities and deficiencies in its legal provisions and judicial practices. In this regard, concepts such as merchant status, cessation of debt payments, the conditions and requirements for filing a bankruptcy claim, the jurisdiction of adjudicating authorities, litigation procedures, and the consequences of issuing a bankruptcy judgment are examined. Furthermore, this study considers the legal system of England as one of the advanced systems in the field of insolvency law, possessing modern standards in the management of financial distress. The regulations of this country, particularly within the framework of the Insolvency Act 1986 and its subsequent amendments, are examined in terms of the efficiency of adjudication mechanisms, protection of creditors, facilitation of economic restructuring, and transparency of judicial procedures, serving as a benchmark for evaluating the Iranian legal system. Ultimately, through a comparative analysis of the existing challenges in bankruptcy litigation in Iran and their comparison with modern standards of English insolvency law, this study seeks to identify legal and procedural gaps and to propose recommendations for the reform and enhancement of bankruptcy-related regulations and judicial processes within the Iranian legal system.