Abstract:
The main purpose of issuing punitive damage verdict is to make compensation for the loss inflicted on the plaintiff and to restore the plaintiff to the status quo ante. In Iranian law, the basic principle is to recover the damage and restore the plaintiff to the status quo ante, but the punitive damage is completely different. In other countries, including England and the US, in which punitive damage is accepted in a broad sense, the punitive damage is defined aside from any compensatory damages or nominal damages which are considered in issuing the verdict due to extreme misconduct of the defendant. As in the members of Romano-Germanic Legal System, in Iranian law punitive damage is not applied in private lawsuits. Despite this situation, and regarding international aspect, and in response to some measures taken by countries - the US, in particular - in sentencing Iran to punitive damage, the lawmaker, eventually, recognized punitive damage in considering civil lawsuits against foreign governments in 2011. A question, however, arises here is that it is possible for arbitration institutions in common-law obedient countries to issue punitive damage verdict. In this paper, we discuss this issue and also possibility or non-possibility of execution by national courts of the punitive damage verdicts issued by arbitration institutions.
Machine summary:
In Iranian domestic law, which is essentially a combination of the Romano-Germanic and Islamic legal systems, the principle is to restore the damage and return the injured party to their previous state, and in practice, the payment of punitive damages is not accepted by the courts (433, 321: 2008 Strachman).
Arbitration Institutions Generally, in the common law legal system, especially in America, punitive damages in commercial disputes and other cases are within the jurisdiction of the court.
In this regard, some American courts in various cases 2 are of the opinion that, for example, choosing New York law as the governing law of the contract simply means applying New York substantive law, and therefore substantive law has no effect on the arbitration institution's jurisdiction to issue a ruling on punitive damages.
Because the governing law of the contract is New York law and according to the laws of the State of New York and the opinion of the courts, the arbitration institution does not have the authority to issue a ruling on punitive damages (Carbonneau, 2010: 11-10).
Article 4 of the Law on the Jurisdiction of the Islamic Republic of Iran's Courts to Investigate Certain Civil Claims of Foreign Governments stipulates: “With regard to the principle of reciprocity, the amount, in assessing material, non-material, and punitive damages of the injured parties, is similar to the rulings issued by foreign courts.
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