Arbitration in Saudi Arabia | From a historical point of view, arbitration has not been widely used as a method of resolving disputes in Saudi Arabia. However, after the new Law of Arbitration and the new Enforcement Law were passed, the arbitration landscape in the country has changed for the better. The two encouraging changes include the establishment of the Saudi Centre for Commercial Arbitration (SCCA) and the publication of SCCA rules.
Additionally, new Arbitration laws were published in Saudi Arabia’s Official Gazette. These arbitration laws clarified particular provisions that were initially not clear under the new Arbitration Law. Caution still needs to be taken. There is a need to find out how the new enforcement and arbitration provisions will be applicable.
It is worth noting that the new law of Arbitration in Saudi Arabia applies to both international and domestic arbitrations conducted in the country. Moreover, parties are free to agree to the applicability of new arbitration laws at the international level. The UNCITRAL Model Law significantly affects the application of the new Arbitration Law. However, drafters in Saudi Arabia have maintained essential Sharia principles. The inclusion of Sharia Law principles has made the laws stricter and more punitive on offenders.
According to article 2 of the new Arbitration Law, any form of arbitration conducted in the country should follow Sharia principles. Different parties are allowed to adopt or agree to procedural rules inclusive of those applied by major arbitral institutions.
Arbitration in Saudi Arabia takes a different path. For instance, there is a significant possibility that if dispute resolution is seated in the Kingdom of Saudi Arabia, a foreign arbitral award is enforceable. It is always recommended that the arbitral tribunal is highly knowledgeable in Sharia Law.
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