Saudi Arabia - National Report - World Arbitration Reporter (WAR) - 2nd Edition

Dr. Torki A. Alshubaiki has worked with the Riyadh Chamber of Commerce and Industry from 1994 to 1997. His job includes legal advising, mediation, and working as a Secretary of the Arbitration Board. He has also been involved with some Chamber of Commerce Committees for the drafting and amendments of various Saudi commercial regulations, such as the commercial agency law, and the regulations for the prevention of bankruptcy. In 1996 he obtained his license as a Saudi Lawyer. He received a BA in Law from King Saud University in 1991, an LL.M. from the American University Washington College of Law (Washington D.C.) in 1993, and a PhD from the London School of Economics (LSE) in 2003. At the present time, Dr. Torki lives in Riyadh, Saudi Arabia where he practices law, and teaches commercial law and private international law at the Business and Law Faculties of Prince Sultan University.

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Originally from World Arbitration Reporter (WAR) - 2nd Edition

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I. INTRODUCTION: ARBITRATION IN SAUDI ARABIA – HISTORY AND INFRASTRUCTURE

A. History and Current Legislation on Arbitration

1. Historical evolution of law relating to arbitration

Pre–Islamic literature indicates that Arabs knew about arbitration before the emergence of Islam. At the time, it was a predominant means of settling disputes between individuals and also between tribes since there was no organized form of justice. After the emergence of Islam the concept of arbitration developed further within the different Islamic eras and schools.

At the beginning of the newly formed Saudi state, there was the adoption of the Commercial Court law, nezam almahkama al tejareah, which was passed in 1931. It was taken from the Ottoman Laws which relied heavily on the French Commercial Code of 1807. The related arbitration provisions were articles 493-497; however, it was difficult to assess the practice of arbitration at the time due to lack of reliable documented precedents. The arbitration award in Saudi Arabia v Arabian American Oil Co issued in 1958 against the Kingdom of Saudi Arabia and in favor of Aramco had a further negative impact on the development of arbitration. Saudi Arabia accepted the ruling complied with the award fully, but also distanced itself from international arbitration for several decades. As a result of the disappointment within the Kingdom that arose from the Aramco case, the Saudi Council of Ministers enacted Resolution No. 58, which prevented Saudi government ministries and agencies from participating in arbitration.

Table of Contents:

I. INTRODUCTION: ARBITRATION IN SAUDI ARABIA – HISTORY AND INFRASTRUCTURE A. History and Current Legislation on Arbitration 1. Historical evolution of law relating to arbitration 2. Distinction between domestic and international arbitration B. Infrastructure and Practice in Saudi Arabia 1. Major arbitration institutions II. CURRENT LAW AND PRACTICE IN SAUDI ARABIA A. Arbitration Agreement 1. Types of validity of agreement a) Clauses and submission agreement b) Form Content 2. Enforcing arbitration agreements B. Jurisdiction 1. Competence-competence 2. Doctrine of separability C. Arbitrability 1. Subjective arbitrability a) Capacity b) State or state entities 2. Objective arbitrability D. The Arbitral Tribunal 1. Status and qualifications of arbitrators a) Number of arbitrators b) Qualifications and accreditation requirements 2. Appointment of arbitrators a) Methods of appointment b) Appointing authorities c) Payment agreements 3. Challenge and removal of arbitrators a) Grounds for challenge b) Removal procedure c) Replacement of arbitrators 4. Liability of arbitrators E. Conducting the Arbitration 1. Law governing procedure a) Determination of law and rules governing procedure b) Notion and role of seat of arbitration 2. Conduct of arbitration a) Submissions and notifications b) Deadlines and methods of their extension 3. Taking evidence a) Documentary evidence and privilege b) Production of documents c) Witnesses d) Experts 4. Interim measures of protection a) Jurisdiction for granting interim measures 5. Interaction between national courts and arbitration tribunals 6. Law and rules applicable to the substance F. Arbitration Award 1. Types of awards a) Partial awards b) Final awards 2. Form requirements a) Essential content b) Time limits for the award 3. Settlement 4. Correction, supplement and amendment a) Correcting the award b) Interpretation of award G. Challenge and other Actions against the Award 1. Appeal on the merits III. RECOGNITION AND ENFORCEMENT OF AWARD A. Domestic Awards B. Foreign Awards 1. National law on recognition and/or enforcement of foreign awards 2. Application of New York Convention by local courts a) The award must not violate public policy in Saudi Arabia b) Finality of the award c) Arbitrability of the subject matter of the dispute d) Presence of a valid arbitration clause or a valid arbitration agreement e) Compliance with the arbitral proceedings f) Jurisdiction of the arbitrators IV. APPENDICES AND RELEVANT INSTRUMENTS A. National Legislation (See CD-ROM) 1. Arbitration Law 2. Implementation Rules B. Bibliography