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.
Originally from World Arbitration Reporter (WAR) - 2nd Edition
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.1 At that 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.2
Before highlighting commercial arbitration in the Kingdom of Saudi Arabia, it is important to mention that Islamic Shariah law does not make any distinction between civil and commercial activities. The rules of Shariah apply regardless to the nature of the transaction or the profession of the person who is involved is such a matter. However there is nothing in Shariah that would prevent an Islamic ruler hakem from passing or adopting laws especially enacted for merchants provided that the laws do not conflict with the principles of Shariah.3 This authority is based on the doctrine of al siyasa al shariyyah, which gives the ruler the power to do whatever is needed for the public good or maslahat al umma, including the merchants in the business community.4 Perhaps that is why the Saudi authorities have chosen to have a formal distinction between commercial and non-commercial activates. This means that Saudi merchants are subject to a separate set of rules and regulations only when it comes to their business dealings and engagements, since these rules observe the commercial customs and usages that exist among the merchants. At the beginning there was the adoption of the Commercial Court Law, nezam almahkama al tejareah, which was passed in 1931.5 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 is difficult to assess the practice of arbitration at the time due to lack of reliable documented precedents.