The Iraqi Federal Court of Cassation has upheld termination of an investment contract after the relevant licence was withdrawn for failure to comply with the approved implementation schedule and project plans.
Background
A public entity entered into an investment agreement for construction of a residential development. The investment licence was withdrawn following alleged failures involving progress, approved plans and other implementation obligations.
Court’s Findings
The Court found that the agreement was based on the investment licence and that the licence had been withdrawn because the investor did not comply with the implementation schedule and approved corrective plans.
The investor had received formal notice requiring performance. As the defaults remained unremedied, the public entity was entitled to seek termination under the Iraqi Civil Code.
Practical Implications
Investors should treat implementation schedules as binding, obtain written approval for plan changes, respond to official warnings, document external causes of delay and request extensions formally rather than relying on informal discussions.
Conclusion
The decision confirms that an investment licence may form part of the legal foundation of the project agreement. Withdrawal of the licence can support termination where contractual default and notice requirements are established.