Dealing with the Right of Extradition in Iranian Law and the Common Law Legal System (England and US)

Document Type : Original Article from Result of Thesis

Authors

1 PhD Student in Private Law Department, Faculty of Law, Theology and Political Science, Science and Research Unit, Islamic Azad University, Tehran, Iran.

2 Assistant Professor, of Private Law Department, Faculty of Law, Central Tehran Branch Islamic Azad University, Tehran, Iran.

3 Associate Professor of Private Law Department, Faculty of Law, Shahid Beheshti University, Tehran, Iran.

Abstract

The construct of conditional sale (CS) was included in Articles 458 to 463 of the Civil Code of Iran at the time of its enactment. The enactment of Article 33 and subsequent articles of the Registration Code of Iran, replaced it with the “transaction with the right of restitution (TWRR)” construct which removed its ownership effects and practically obsoleted it. The research question of this study was, “Since the ownership effects of the CS were removed in the TWRR, does CS in common law have ownership effect?” This was a descriptive-analytical research aimed to answer the latter part of that question using comparative analysis. The results indicated that TWRR, also known as the conditional transaction, is similar to the construct of mortgage in common law before the removal of its ownership effects.

Highlights

Introduction

The establishment of the construct of conditional sale (CS) in the Civil Code of Iran (CCI), led to the emergence of many abuses of that construct. To stop these inappropriate abuses, Article 33 of the Registration Code of Iran was enacted in 1972. According to the new article, the CS lost its existing ownership effect and the conditional contract was molded into a mortgage and security agreement. For the purpose of explaining the subject of this paper, claiming that the core philosophy of the private law is preventing unjustified owning wouldn’t be an overstatement. Transactions have always been rational and legitimate means and ways of property transfer which justified allocating a part of CCI to conditions and effects of contracts. Considering CS as a legal concept in CCI, ownership of the object of sale is an effect of the CS. Which begs the question, “Does CS has ownership effects in common law legal system or it has the same effects and conditions of mortgage contracts, similar to the transaction with the right of restitution (TWRR) in Iranian law?” The hypothesis**ociated with the primary research question is, “The nature of TWRR in Iranian law eliminates the transfer of ownership of a restitutable valuable consideration in any possessory contract and instead vests security effect on the valuable consideration and loan effects on the exchanged.” The answer to the research question is “there is a construct similar to CS in the common law called mortgage contract.”

 

Methodology

This was an analytical-descriptive study based on library resources. Research data was sought and collected from different scientific resources (books, electronic and non-electronic papers, and reputable scientific databases) and comparatively analyzed.

 

Research Findings

Comparative Study of the TWRR

This section begins with a comparative study between TWRR and some similar contracts in the Iranian law. A comparative study between the TWRR in Iranian and common law legal systems then examines their similarities and differences.

Comparison between TWRR and Loan Contract in Iranian Law

In TWRR, the main objective of the debtor and creditor are getting a loan and profiting, respectively. However, a separate contract concluded simultaneously is not a loan contract and slightly diverges from the primary purposes of the parties to the contract. What are the differences that makes those two contracts not the same? The answer lies in dissimilarities in their various aspects. In terms of concluding the contract: In a loan contract, only one transaction is conducted. In TWRR usually several, mostly three, transaction are conducted simultaneously (an unconditional sale, a mortgage contract, and a power of attorney contract). In terms of possessory effects: A loan contract is an ownership contract. However, in TWRR, while the real purpose of the parties is giving and getting a loan, the law doesn’t considers these transactions to have ownership effect and has removed such effect. TWRR and mortgage contract differ in the following aspects: Recourse or not recourse to the other properties of the debtor; Treatment of the interests of the object of contract; The method of the exercising the right; and The scope of the creditor's right.

TWRR in the UK Law

The construct of mortgage in UK law is similar to the TWWR in Iranian law. In this type of contract one party gives a loan to the other party. The debtor transfers the ownership of a movable or immovable property to the creditor to guarantee the repayment of the loan subject to the condition that the debtor regains the ownership of the object of contract upon paying the debt in due time.

TWRR in the US Law

In the US legal system, TWRR takes the form of mortgage and home loan contract. There are three legal mortgage theories: title theory, lien theory and intermediate theory. These theories pertain particularly to the operation of mortgages, and so provide the key to understanding the differences which exist in the operation of mortgages across jurisdictions.

 

Conclusions

The so-called CS or TWRR in Iranian law, before removing its ownership effect, is similar to the construct of mortgage in the (UK and US) common law. In those systems, if the debtor does not pay the price or the debt in due time, the creditor becomes the sole owner of the transferred property. However, considering the issues that gaining ownership brings to the creditor, the common law legal system removes the statute of limitations in such transactions and allows the debtor to recover the object of transaction by repaying the loan at any time. Unlike the UK law, the Iranian  Registration Code (1972) states that no security contract has the effect of transferring ownership of the collateral to the creditor, such that repaying the debt recovers the debtor’s ownership under the law, by removing the ownership effect of the CS and establishing the construct of TWRR. This is implied by Article 33 of the Registration Code (of Iran) which states the transferor has the right to request registration of the collateral. Otherwise, the law would have given that right to the buyer. Therefore the ownership of the collateral still belongs to the pledger(s) and the pledgee only has jus ad rem with priority and prosecution privileges even though the object of the security contract had been delivered to and seized by the creditor.

Keywords

Main Subjects

References

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