Winning a case in Iraq is only half the battle. A judgment has little value until the debtor actually pays. The Enforcement Law sets out how judgments, awards and certain documents are turned into real recovery. Foreign companies that do not understand this process often find themselves holding a favourable judgment but no money.
Legal Framework
The Enforcement Law No. 45 of 1980 governs the compulsory execution of judgments and other enforceable instruments in Iraq. It sets out which documents can be enforced, how enforcement files are opened and the measures available against a debtor. Enforcement is carried out through execution directorates that operate under the Ministry of Justice.
The law works alongside the Civil Procedure Law No. 83 of 1969 and the Judicial Fees Law No. 114 of 1981. Foreign judgments are subject to a separate recognition process under the Law on the Execution of Foreign Judgments No. 30 of 1928. Only after recognition can a foreign judgment proceed to enforcement.
Key Points for Foreign Companies
What Can Be Enforced
The law allows enforcement of several types of instruments. These generally include:
- final judgments of Iraqi courts;
- arbitral awards ratified by a competent court;
- certain official documents, such as notarised instruments;
- certain commercial papers, such as cheques and bills of exchange.
Holding one of these instruments can save the time and cost of a full lawsuit.
Opening an Enforcement File
The creditor submits the enforceable instrument to the competent execution directorate. The directorate then notifies the debtor and gives them a period set by the law to comply voluntarily. Fees are payable when the file is opened. These fees can usually be recovered from the debtor.
Measures Against the Debtor
If the debtor does not pay, the execution directorate can take compulsory measures. These may include attachment of bank accounts, salaries, movable property and real estate. Attached property can be sold at public auction, and the proceeds are used to pay the creditor.
Personal Measures
Iraqi law allows certain personal measures against debtors who fail to pay, subject to legal conditions. These can include restrictions on travel and, in some cases, detention for refusal to pay. Such measures are subject to exceptions and judicial control.
Debtor Objections
Debtors may raise objections to enforcement procedures on grounds set by the law. Some decisions of the execution directorate can be challenged before the courts. Creditors should expect objections from well-advised debtors and prepare their files accordingly.
Enforcing Foreign Judgments
A judgment issued outside Iraq cannot be enforced directly. It must first be recognised by an Iraqi court under the 1928 law, which sets conditions such as reciprocity and proper jurisdiction. Arbitral awards may follow a different route, depending on the applicable convention.
Locating Assets
Enforcement only works if the debtor has reachable assets in Iraq. Creditors should identify bank accounts, property and receivables early. Information gathered before a dispute is often more reliable than information sought afterwards.
Practical Recommendations
- Ask Iraqi counterparties for notarised acknowledgements of debt or cheques where commercially appropriate.
- Identify the debtor’s assets in Iraq before starting litigation or enforcement.
- Open the enforcement file promptly once a judgment becomes enforceable.
- Plan recognition of any foreign judgment or award as part of your original dispute strategy.
- Follow the enforcement file actively through a local lawyer, since progress often depends on persistence.
Conclusion
The Enforcement Law gives creditors real tools to recover money in Iraq. These tools work best when used quickly and backed by good information about the debtor’s assets. Foreign companies should treat enforcement as part of their dispute strategy from the start.
This article provides general information only and does not constitute legal advice. For advice on enforcing judgments and debts in Iraq, contact Etihad Law team.