Legal Nature of Iran Petroleum Contracts in International and Iranian Law

Some argue that Iran Petroleum Contracts (IPC) are buy-back (bai' motaqabel) agreements. However, considering the basic criteria of such agreements—including the absence of a concrete object, subject of the contract, and design/development at the time of contract conclusion—IPCs cannot be regarded as buy-back contracts. The main research questions are why IPCs cannot be categorized as one of the common legal contracts such as sale, barter, and reward (Ji’ala) and whether they must be defined within the scope of Iranian or international law.  The findings of this analytical and comparative study outlined three different views concerning the nature of IPCs: (1) administrative contracts governed by domestic laws of the employer, i.e., the government, (2) private contracts governed by Article 10 of the Iranian Civil Code, and finally, (3) contracts with international and transnational features. There are arguments made in favor of each view. In terms of Iranian laws, IPCs are marked with special features with similarities and differences in comparison to other contract types specified in the Iranian Civil Code such as sale, barter, reward, and lease, while they cannot be classified as either one of these.