Draft Iraqi Arbitration Law 2026: What Companies, Investors and In‑house Counsel in Iraq Need to Know

Iraq’s arbitration framework is on the cusp of its most significant overhaul in more than half a century, and every company with commercial exposure to the country should be paying attention. The draft Iraqi Arbitration Law, developed through an extended consultation process that began in late 2024 and gathered momentum through 2025, is designed to replace the arbitration provisions embedded in the Iraqi Civil Procedure Code (CPC) of 1969 with a modern, standalone statute broadly aligned with UNCITRAL Model Law principles. For foreign investors, contractors and joint‑venture partners, the practical consequences are immediate: arbitration clause drafting, seat selection, enforcement strategy and even the viability of emergency arbitrator relief will all be affected once the law enters force.

This guide sets out, section by section, the changes that matter most, the steps to take now and the contract language that should be on every in‑house counsel’s desk before the next board cycle.

Executive Summary, What In‑House Counsel Must Act on Now

The draft Iraq arbitration law touches virtually every dimension of commercial dispute resolution in the country. Before diving into the detail, the following takeaways capture the actions that general counsel should prioritise today:

• Audit existing arbitration clauses. Contracts governed by Iraqi law, or with Iraqi‑seated arbitrations, should be reviewed against the draft’s new requirements on written form, arbitrability and seat designation. High‑value and high‑risk contracts warrant immediate renegotiation.
• Re‑evaluate seat selection. The draft introduces clearer rules on the distinction between the juridical seat and the physical venue of hearings, making Baghdad a more predictable seat option while preserving the advantages of Paris, London or Doha for enforcement in third jurisdictions.
• Prepare for streamlined enforcement of foreign awards. Industry observers expect the new statute to create a more transparent recognition procedure, reducing the discretion Iraqi courts have historically exercised under CPC Articles 251–277. Pre‑enforcement actions, asset identification, certified translations and provisional measures, should begin now.
• Understand the new set‑aside grounds. The draft introduces limited grounds for challenging awards that are closer to UNCITRAL norms, but it retains certain public‑policy carve‑outs specific to Iraqi law. Parties should model the risk of local set‑aside proceedings into their dispute budgets.
• Monitor the legislative timeline. Parliamentary approval is anticipated in the Q2–Q4 2026 window, though no official enactment date has been confirmed. Businesses should insert transitional language into new contracts to address which regime applies if the law changes mid‑performance.
• Engage local arbitration counsel early. The institutional ecosystem is expanding, the ACAI Phase II programme and UNDP initiatives are building arbitrator capacity and administrative infrastructure, but counsel selection remains critical to successful outcomes.

Why Iraq Is Changing Its Iraq Arbitration Law, Policy and Institutional Drivers

The current legal framework for arbitration in Iraq is anchored in the CPC of 1969, specifically Articles 251 through 277. While those provisions permit arbitration, they were never designed to accommodate the complexity of modern cross‑border commercial disputes or the expectations of international investors. The CPC treats arbitration as an extension of court proceedings, requires extensive judicial supervision, and offers limited guidance on the enforceability of foreign arbitral awards. Decades of conflict and institutional disruption compounded these limitations, pushing many multinational parties to seat their arbitrations outside Iraq altogether, often in Paris, London or the Gulf, with mixed results when enforcement was sought back in Iraqi courts.

The policy impetus for arbitration reform in Iraq gained formal traction as part of broader investment‑climate improvements championed by the Iraqi National Investment Commission. Amendments to Investment Law No. 13 of 2006 signalled the government’s intent to modernise the legal environment for foreign capital. At the same time, international development partners began investing directly in arbitration infrastructure.

Institutional Drivers: UNDP, ACAI Phase II and the World Bank

The UNDP Iraq programme has explicitly targeted arbitration as a lever for creating a more investment‑friendly economy, supporting capacity building for judges, arbitrators and legal professionals. The World Bank’s comparative research on arbitration in Iraq benchmarked the country’s regime against regional peers, highlighting specific gaps in enforcement predictability and institutional independence. Most recently, the ACAI Phase II programme, supported by EU funding, has been described as a pivotal initiative in Iraq’s arbitration transformation, focusing on legal reform, arbitrator training and the establishment of credible arbitration centres. Early indications suggest these institutional pillars are designed to ensure that when the draft law enters force, the administrative infrastructure exists to support it.

Key Changes in the Draft Iraq Arbitration Law, Clause‑Level Implications

The draft statute represents a paradigm shift in how Iraq approaches international commercial dispute resolution. The table below summarises the reform areas that matter most for contract drafting and enforcement strategy.

Arbitrability and Jurisdiction Under the Draft Arbitration Law Iraq

Under the CPC of 1969, the scope of arbitrable disputes has been interpreted narrowly by Iraqi courts, creating uncertainty for parties in sectors such as oil and gas, construction and telecommunications. The draft law expands arbitrability to cover the full range of commercial and civil disputes where parties have legal capacity to settle, while preserving exclusions for matters of personal status, nationality and criminal law. For corporate disputes in Iraq, particularly in the energy and infrastructure sectors that dominate foreign investment, this expansion is a significant development. Contracts that previously included arbitration clauses of uncertain enforceability can now be drafted with greater confidence that Iraqi courts will respect the parties’ choice of forum.

Set‑Aside, Appeals and Judicial Review Under the Draft

One of the most closely watched elements of the draft is its treatment of award challenges. Under the current CPC, Iraqi courts have exercised broad supervisory jurisdiction over arbitral awards, including the power to review the merits. The draft law moves decisively away from this approach by establishing an exhaustive list of grounds on which an award may be set aside, grounds that mirror UNCITRAL Model Law Article 34. Industry observers expect this to cover:

• Incapacity of a party or invalidity of the arbitration agreement under the law applicable to it
• Lack of proper notice of arbitrator appointment or inability to present one’s case
• Award dealing with matters beyond the scope of the submission to arbitration
• Composition of the tribunal or arbitral procedure not in accordance with the agreement or the law
• Public policy of Iraq, the residual ground that will attract the most judicial interpretation

The likely practical effect will be a meaningful reduction in the number of successful challenges, bringing Iraq closer to regional and international norms on arbitral finality. However, the public‑policy ground remains broad, and parties should anticipate that Iraqi courts will continue to invoke it in cases involving state entities, sovereign assets or religiously sensitive matters.

Interim Relief and Emergency Arbitrators

The draft’s provisions on interim measures represent a notable modernisation. Under the CPC, parties seeking urgent relief generally had to apply to Iraqi courts, even where an arbitration agreement existed. The draft law empowers the arbitral tribunal to order provisional and conservatory measures, including asset freezes, evidence preservation and injunctions, and contemplates a framework for recognising orders issued by emergency arbitrators appointed under institutional rules (such as those of the ICC or LCIA). This matters for cross‑border transactions where assets are located in Iraq but the arbitration seat is abroad: parties will have a statutory basis for seeking Iraqi court assistance in enforcing emergency orders.

Enforceability of Foreign Awards in Iraq, Practical Outlook and Steps

Enforcement of foreign arbitral awards has historically been the single greatest source of risk for parties arbitrating disputes connected to Iraq. The CPC enforcement procedure was cumbersome, highly discretionary and subject to delays that could stretch over years. The draft Iraq arbitration law is expected to significantly improve this landscape, though practical challenges will remain during the transitional period.

Recognition Grounds

The draft introduces a modernised recognition framework that draws on the principles of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Iraq is not currently a signatory to the New York Convention, which has been a persistent obstacle. However, the draft law’s internal recognition provisions are designed to replicate many of the Convention’s protections, including the principle that enforcement should be refused only on limited, enumerated grounds. Industry observers expect this to reduce, though not eliminate, the risk of Iraqi courts refusing enforcement on broad public‑policy or procedural grounds.

Practical Enforcement Steps, Checklist

Whether acting under the current CPC or positioning for the new regime, parties seeking to enforce foreign awards in Iraq should follow a structured approach:

1. Obtain a certified copy of the award, authenticated by the arbitral institution or, for ad hoc awards, notarised in the country of origin.
2. Prepare a certified Arabic translation, Iraqi courts require all documents in Arabic; use a sworn translator recognised by the Iraqi judiciary.
3. Compile the arbitration agreement and supporting correspondence, demonstrating that the agreement to arbitrate was valid and in writing.
4. File an enforcement application with the competent Iraqi court (currently the Court of First Instance; the draft may designate a specialist chamber).
5. Serve notice on the respondent in accordance with Iraqi procedural rules, defective service is a common ground for delay.
6. Apply for provisional measures, where assets are at risk of dissipation, seek an attachment or freezing order contemporaneously with the enforcement application.
7. Monitor for objections, the respondent may challenge enforcement on grounds of public policy, procedural irregularity or lack of jurisdiction. Prepare responsive submissions in advance.

Likely Court Timelines

Under the current regime, enforcement proceedings in Iraqi courts can take anywhere from several months to several years, depending on the complexity of the case, the respondent’s litigation strategy and the specific court. Early indications suggest the draft law may introduce prescribed time limits for courts to rule on enforcement applications, though the effectiveness of such provisions will depend on judicial capacity and institutional support. Parties should budget for a minimum of six to twelve months from filing to final enforcement order, with the possibility of extended proceedings if public‑policy objections are raised.

Drafting Arbitration Clauses for Contracts with Iraqi Parties

The draft Iraq arbitration law creates both opportunities and obligations for parties negotiating arbitration clauses in Iraq. The following guidance addresses the key drafting decisions, seat selection, governing law, institutional rules and enforcement carve‑outs, and provides sample clause language for three common scenarios.

Seat vs Seat Alternatives for Arbitration Seat Iraq

The choice of arbitration seat remains the single most consequential drafting decision. The draft law’s recognition of a clear seat/venue distinction means that parties can now designate Baghdad as the juridical seat, bringing the arbitration within the scope of the new law’s modernised framework, while conducting hearings in a neutral location. Alternatively, parties may prefer to seat the arbitration in Paris (under the French Code of Civil Procedure), London (under the English Arbitration Act 1996) or Doha (under the Qatar International Centre for Conciliation and Arbitration rules), particularly where enforcement will be sought in New York Convention signatory states.

The trade‑off is that a foreign seat may complicate enforcement in Iraq if the new law’s streamlined provisions apply only to domestically seated awards.

Sample Investor‑Friendly Arbitration Clause Iraq

The following model clause is designed for use by foreign investors entering joint ventures, concession agreements or construction contracts with Iraqi counterparties. It should be adapted to the specific transaction and reviewed by qualified Iraqi counsel:

“Any dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Rules of the ICC. The seat of arbitration shall be Paris. The language of the arbitration shall be English, with Arabic translations provided for any award to be enforced in Iraq. The tribunal shall consist of three arbitrators. The parties expressly waive any right to appeal the award on the merits before any national court.”

Practical Negotiation Tips for Arbitration Clause Iraq Drafting

• Specify the number of arbitrators. The draft law may include a default provision (sole arbitrator for lower‑value disputes); override this where three‑member panels are preferred.
• Include a consolidation and joinder clause for multi‑party transactions, particularly in construction and oil and gas, to avoid parallel proceedings.
• Address sovereign immunity expressly. Where the counterparty is a state entity or state‑owned enterprise, include a waiver of sovereign immunity from jurisdiction and enforcement.
• Carve out urgent court relief. Preserve the right to apply to any competent court for interim measures without waiving the arbitration agreement, the draft law supports this, but express language avoids ambiguity.
• Add transitional language. Until the draft law is enacted, include a clause specifying that the arbitration agreement is governed by the law in effect at the date of commencement of proceedings, with a fallback to the UNCITRAL Model Law if there is a gap.
• Designate the governing law of the arbitration agreement separately from the governing law of the substantive contract, this is particularly important where the contract is governed by Iraqi law but the parties wish the arbitration agreement to be governed by the law of the seat.

Investor Arbitration and State‑Related Disputes in Iraq, Practical Guidance

Foreign investors in Iraq face a distinctive set of dispute resolution considerations that go beyond commercial arbitration. The interplay between investor arbitration in Iraq, bilateral investment treaties (BITs), Investment Law No. 13 of 2006 (as amended) and the draft arbitration law creates a multi‑layered landscape that requires careful navigation.

ICSID vs Ad Hoc, ICC and UNCITRAL Arbitration

Iraq is a member of the International Centre for Settlement of Investment Disputes (ICSID), which means that foreign investors from ICSID member states may have access to treaty‑based arbitration for claims arising from measures attributable to the Iraqi state. However, access to ICSID depends on the existence of a qualifying BIT or multilateral investment treaty, and the specific dispute resolution clause within that treaty. The amendments to Investment Law 13 have added further complexity: the National Investment Commission’s official guidance should be consulted to determine whether the amended law preserves, modifies or restricts investor access to international arbitration.

For commercial disputes that do not rise to the level of a treaty claim, breach of contract with a state‑owned enterprise, for example, the draft arbitration law will be the primary governing framework.

Preserving Evidence and Notices

• Issue formal notices of dispute as early as possible, in compliance with any cooling‑off or negotiation period specified in the relevant BIT or contract.
• Preserve all documentary evidence, including government correspondence, licences, permits and regulatory decisions, in both Arabic original and certified English translation.
• Engage local counsel immediately to secure provisional court measures (asset preservation, document production orders) in parallel with the initiation of arbitral proceedings.
• Assess the availability of treaty‑based MFN (most‑favoured‑nation) clauses that may permit importation of more favourable dispute resolution provisions from other BITs to which Iraq is party.

Operational Checklist: Preparing for Dispute Resolution in Iraq

Effective preparation for arbitration hearings in Iraq requires a structured, time‑bound approach. The checklist below is designed for in‑house legal teams managing active or anticipated disputes.

0–30 Days: Immediate Actions

• Identify and preserve all relevant documents, communications and financial records.
• Engage Iraqi local counsel with arbitration experience, the Global Law Experts lawyer directory provides access to specialists by jurisdiction and practice area.
• Issue litigation hold notices to all relevant business units and third‑party custodians.
• Prepare a preliminary budget and timeline for the arbitration, including estimated court and tribunal fees.
• Assess whether provisional measures (asset freezes, injunctions) are needed and apply to the competent court or emergency arbitrator.

30–90 Days: Strategic Preparation

• Commission certified Arabic translations of all key documents.
• Identify and instruct expert witnesses (quantum, industry, legal).
• File the request for arbitration or notice of arbitration with the chosen institution.
• Notify relevant regulators (National Investment Commission, Central Bank of Iraq) where the dispute involves a licensed activity or state counterparty.
• Prepare a detailed evidence matrix mapping each claim element to supporting documents and witness testimony.

When to Notify Regulators

Regulatory notification is advisable, and in some cases mandatory, when the dispute involves a state entity, a licensed activity (banking, oil and gas, telecommunications) or foreign investment registered with the National Investment Commission. Failure to notify may not invalidate the arbitration, but it can create complications for enforcement and ongoing regulatory compliance.

Timeline, Transitional Arrangements and Next Steps for Contracts

The legislative timeline for Iraq’s arbitration reform has evolved through several phases. The table below summarises the key milestones and their implications for contract management, reflecting the broader trajectory of global corporate law trends.

For contracts currently under negotiation, the recommended approach is to include a transitional clause that addresses three scenarios: (1) the contract is performed entirely before the new law enters force; (2) the contract straddles the transition; and (3) the contract is performed entirely under the new regime. A well‑drafted transitional clause will specify the governing arbitration law by reference to the date of commencement of proceedings rather than the date of the contract, ensuring that the most modern framework applies.

Practical Annex, Clause Redlines and Sample Notice Forms

The following sample clauses are provided for illustrative purposes and should be reviewed by qualified counsel before use. Each clause is designed to address specific risks arising from the transition to the new Iraq arbitration law framework.

Redline 1, Investor‑Friendly Clause (Foreign Seat)

“All disputes arising out of or in connection with this Agreement shall be finally resolved by arbitration under the ICC Rules. The seat shall be Paris, France. The tribunal shall comprise three arbitrators. The language shall be English. Any award shall be final and binding, and the parties waive any right to appeal on the merits. The parties consent to enforcement of the award in Iraq under the applicable Iraqi arbitration legislation in force at the date of the award.”

Redline 2, Construction and EPC Clause (Iraqi Seat)

“Disputes shall be resolved by arbitration seated in Baghdad, Iraq, under the UNCITRAL Arbitration Rules. The tribunal shall consist of three arbitrators, one appointed by each party and the third by agreement or, failing agreement, by the appointing authority designated in the Rules. The governing law of this Agreement is Iraqi law. The arbitration agreement shall be governed by the Iraqi arbitration law in effect at the commencement of proceedings.”

Redline 3, Joint Venture Clause (Hybrid with Consolidation)

“Any dispute shall be referred to arbitration under the LCIA Rules, seated in London. Where multiple related disputes arise under this Agreement and any associated shareholder or supply agreement, the parties consent to consolidation of proceedings before a single tribunal. Emergency arbitrator provisions under the LCIA Rules shall apply. The parties waive sovereign immunity from jurisdiction and enforcement to the fullest extent permitted by law.”

Sample Enforcement Notice Template

“To: [Respondent Name and Registered Address]
Date: [Date]
Re: Notice of Enforcement of Arbitral Award dated [Award Date], rendered in [Arbitration Reference Number] under [Institutional Rules]
We hereby notify you that we intend to seek recognition and enforcement of the above award before the competent courts of the Republic of Iraq. A certified copy of the award, together with a certified Arabic translation and the original arbitration agreement, will be filed with the [Court Name] on or after [Filing Date]. You are invited to contact our legal representatives at [Contact Details] within 14 days of this notice to discuss any matter arising.”

Conclusion

Iraq’s draft arbitration law represents the most significant reform to the country’s dispute resolution framework since the CPC of 1969. For companies, investors and in‑house counsel with exposure to Iraq, whether through construction projects, oil and gas concessions, joint ventures or commercial agency agreements, the time to act is now. The Iraq arbitration law reform will reshape clause drafting, seat selection, enforcement strategy and the economics of cross‑border disputes. Businesses that prepare proactively, by auditing existing clauses, engaging experienced local counsel and inserting transitional language into new contracts, will be best positioned to benefit from the modernised regime. Those that wait risk being caught between two legal frameworks with neither fully protecting their interests.

Sources

1. Eversheds Sutherland, Unlocking Iraq’s Arbitration Potential
2. Al Tamimi & Company, Arbitration in Iraq: What You Need to Know
3. World Bank, Arbitration in Iraq (PDF)
4. UNDP Iraq, Arbitration Initiative
5. HHL‑IQ, ACAI Phase II: Iraq’s Arbitration Revolution
6. Iraqi National Investment Commission (Investpromo)
7. Aceris Law, Iraq Arbitration Lawyers Desk
8. SSRN, Academic Analysis of Iraq’s New Arbitration Law