The Iranian side, coached by Mostafa Karkhaneh, defeated Al Hilal in three consecutive games (25-18, 25-17, and 25-16) on Sunday night.
The Asian four-time champion, Paykan, will meet either Thailand or Bahrain in the next round.
Fifteen teams have participated in the 2009 Asian Men's Club Volleyball Championships, which is being held in Dubai, the United Arab Emirates, press tv reported.
Peykan won the Asian title in 2002, 2006, 2007 and 2008.
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