The Approach of German Courts towards the Sanctions with Foreign Origin in Contractual Disputes

The increase in sanctions during the last two decades has created numerous legal issues in contractual disputes, especially in national courts. It is clear that national courts of the sanctioning country, take into account the sanctions enacted by the foreign government, and in case the sanctions conflict with the rights and obligations of dispute parties, they adjust the final verdict in compliance with their internal sanctions laws. Nevertheless, the question is whether a court can, in the process of describing, interpreting, and applying the legal and contractual obligations of the litigants, consider, sanctions imposed by foreign countries or entities in its decision-making process to issue a judgment in the case. In this article, an attempt has been made to examine this legal question with a case study of the approach and procedure of German courts that have significant contractual relations with Iranian individuals. The findings show that the courts of this country, in contractual disputes in which there is an element of sanctions of foreign origin, do not refer to private international law and the rules of conflict of laws, and directly use the capacity of the domestic substantive laws of Germany. Simultaneously, they pay attention to the considerations of German foreign policy to issue the final verdict in such cases. German courts also pay attention to the goals and interests of the European Union's foreign policy and European values in the decision-making process to give effect to sanctions of foreign origin.