Role of Judicial Proceeding during Enterprise Crisis in Iraninan and UK Law

Document Type : Original Article


1 Islamic Azad University South Tehran Branch

2 Islamic Azad University Damavand Branch

3 Islamic Azad University. North Tehran Branch

4 Islamic Azad University. South Tehran Branch


In this article, we introduce three stages of corporate insolvency and study the available proceedings in Iranian and UK laws that are most appropriate for each stage. The first stage, or ″Pre-insolvency crisis″, has been dominantly addressed via ″Scheme of arrangement″ in both countries. However, the UK additionally provides ″Company voluntary agreement″ as an alternative approach, which does not exist in Iranian laws but has compared with the closest existing matches. ″Moratorium″ can also be utilized in this stage as supplementary proceedings/help. In the second, ″final insolvency ″stage, ″Administration″ and ″Restructuring″ in the UK are compared with the ″Scheme of arrangement″ in Iranian trade law as the most relevant proceedings, and ″Ban of the termination clause″ is proposed as an additional supplementary means. Finally, for the third, ″critical insolvency ″stage, both countries propose ″Liquidation″, whereas the UK system additionally offers the ″Prepack″ procedure.

The existence and diversity of available proceedings in the UK law system match closely with the degree of insolvency, whereas these choices are much more restricted in the Iranian law system, exemplifying the need for new legislation.


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