A Comparative Study of the Legal Status of Contracts of Bankrupt Traders after the Issuance of Bankruptcy Judgment

Abstract

Article 418 of the Iranian Commercial Code prohibits bankrupt traders from intervening in their own assets and financial transactions from the date of the bankruptcy judgment. However, it does not address the enforcement guarantee of such interventions and merely imposes a prohibition. The question arises as to what sanctions exist for the enforcement of such interventions and transactions if a bankrupt trader engages in transactions or contracts concerning their assets and properties after the issuance of the bankruptcy judgment. In response to this question, there are differing opinions among domestic and international legal scholars. Some legal scholars argue for the absolute nullity of such interventions, while others adopt the perspective of relative nullity, and some differentiate between transactions made before and after the declaration of bankruptcy. Meanwhile, some advocates adhere to the theory of non- intrusion. This research, recruiting a descriptive-analytical approach, examines various perspectives, critiques them within the Iranian legal system, and explores the subject in Imamiyya jurisprudence, as well as the laws of the United States and England. The research concludes that the theory of "considered status" provides a more suitable solution for expressing the enforcement guarantee of legal interventions by bankrupt traders after the issuance of the bankruptcy judgment.

Keywords

• bankrupt trader
• legal interventions
• relative nullity
• non-intrusion
• considered status (vaziat mora'i)