This country-specific Q&A provides an overview of the legal framework and key issues surrounding arbitration law in Saudi Arabia.
This Q&A is part of the global guide to Arbitration.
For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/index.php/practice-areas/arbitration/
What legislation applies to arbitration in your country? Are there any mandatory laws?
The Law of Arbitration promulgated by Royal Decree No. M/34 dated 16 April 2012 and its Implementing Regulations, which were passed on 22 May 2017 and came into force on 9 June 2017, apply to arbitration in the Kingdom of Saudi Arabia (the “KSA”).
The above Law of Arbitration repeals the old Law of Arbitration dated 26 April 1983 and all the arbitration provisions comprised in the Law of Commercial Court, promulgated by Royal Instruction No. 32 dated 1 June 1931.
The Law of Enforcement, promulgated by Royal Decree No. M/53 dated 3 July 2012, also applies to arbitration in the KSA.
Without prejudice to the rules of Shariah and the provisions of International Conventions to which the KSA is a party, the provisions of the Law of Arbitration are mandatory for arbitrations seated in the KSA and international commercial arbitrations seated outside of the KSA, if the parties have agreed to subject the proceedings to the KSA Law of Arbitration.
The Law of Arbitration does not apply to disputes related to personal status and matters wherein conciliation is not permitted, including Hudud.
Is your country a signatory to the New York Convention? Are there any reservations to the general obligations of the Convention?
Yes. The KSA is a signatory to the New York Convention, which it has ratified on 19 April 1994.
The KSA requires the existence of reciprocity treatment in its relations with other countries and the compliance of Shariah principles, public policy and Islamic rules in the application of the Convention’s general obligations.
What other arbitration-related treaties and conventions is your country a party to?
Beside the New York Convention, the KSA is a party to the convention of the Arab League on the Enforcement of Judgements and Arbitral Awards (1952), the Riyadh Arab Agreement for Judicial Cooperation (also known as the Riyadh Convention) (1983), the International Centre for Settlement of Investment Disputes (ICSID) Convention (1966), and the Gulf Cooperation Council Convention for the Execution of Judgments, Delegations and Judicial Notification (1996).
Is the law governing international arbitration in your country based on the UNCITRAL Model Law? Are there significant differences between the two?
The KSA Arbitration Law (2012) is mainly based on the UNCITRAL Model Law (1985).
Are there any impending plans to reform the arbitration laws in your country?
The KSA recently adopted the new Law of Arbitration and repealed the previous Law of Arbitration. In addition, the KSA also promulgated the related Implementing Regulations and the Enforcement Law.
The provisions of the new Law of Arbitration are considered modern and harmonized, as they are essentially based on the UNCITRAL Model law.
There are therefore no current plans to reform the arbitration laws in the KSA.
What arbitral institutions (if any) exist in your country? Have there been any amendments to their rules or are there any being considered?
In 2014, the KSA has established the Saudi Center for Commercial Arbitration (“SCCA”) to administer arbitral proceedings in civil and commercial disputes further to parties’ agreements. The SCCA’s jurisdiction does not include personal status, administrative, and criminal disputes, nor does it include matters that cannot be arbitrated, such as Hudud .
In addition to administering arbitration proceedings, the SCCA provides Alternative Dispute Resolution (“ADR”) services that include mediation. The SCCA provides its services, in accordance with international and professional standards, in both Arabic and English.
The SCCA’s staff has been trained by the American Arbitration Association - International Centre for Dispute Resolution (“AAA-ICDR”) and the SCCA provides users with various arbitration and ADR technological tools (such as, video and teleconference, video and audio recording, etc.) and facilities to ensure a rapid and effective settlement of domestic and international commercial disputes.
The SCCA acknowledges the principles of independency, neutrality, integrity, transparency, privacy and responsibility for its litigants in the arbitration procedures.
What are the validity requirements for an arbitration agreement under the laws of your country?
Article 2 of the Law of Arbitration provides that the arbitration agreement may not prejudice the rules of Shariah and International Conventions to which the KSA is a party. The provisions of the Law of Arbitration shall apply to any arbitration, regardless of the nature of the dispute, if such arbitration takes a place in the KSA and is a civil and commercial arbitration.
The provisions of the Law of Arbitration shall not apply to personal status disputes and matters wherein conciliation is not permitted, such as Hudud.
Article 2 of the Law further requires that a person must have legal capacity before entering into an arbitration.
Article 9(2) requires that any arbitration agreement must be in writing. Under Article 10(3), an arbitration agreement will be deemed in writing if:
- it is included in a document issued by the two relevant parties;
- it is in an exchange of documented correspondence, telegrams or any other electronic or written means of communication;
- it appears as a reference in a contract or a mention therein of any document containing an arbitration clause; and
- it appears as a reference in the contract to the provisions of a model contract, international convention or any other document containing an arbitration clause, so long as the reference clearly deems the clause as part of the contract.
Article 10(1) of the Law of Arbitration provides that the arbitration agreement may only be concluded by persons having legal capacity to dispose of their rights (or designees) or by corporate persons.
Article 10(2) of the Law of Arbitration prohibit Government bodies to enter into arbitration agreements except upon approval by the Prime Minister, unless allowed by a special provision of law.
Are arbitration clauses considered separable from the main contract?
Article 21 of the Law of Arbitration provides that the arbitration clause shall be treated as an agreement independent of the other terms of the contract. The nullification, revocation or termination of the contract which includes the arbitration clause shall not entail the nullification of the arbitration clause therein, if such clause is valid.
Is there anything particular to note in your jurisdiction with regard to multi-party or multi-contract arbitration?
The KSA Law of Arbitration and its Implementing Regulations do not provide specific provisions addressing multiparty arbitration. However, multiparty arbitration is recognized under Article 11 of the Implementing Regulations. Specifically, Article 11 provides that "if there are multiple parties to the arbitration, the procedures shall start from the day on which the last party receives the arbitration request."
How is the law applicable to the substance determined? Is there a specific set of choice of law rules in your country?
Article 5 of the Law of Arbitration provides that if both parties to arbitration agree to subject the dispute to the provisions of any document (model contract, international convention, etc.), then these provisions shall apply, provided that they are not in conflict with the provisions of Sharia.
Article 38 of the Law of Arbitration details the rules relating to the law applicable to the subject matter of the dispute, which includes when the parties have not agreed to apply any specific law. This article provides:
1. Subject to provisions of Sharia and public policy in the Kingdom, the arbitration tribunal shall, when deciding a dispute, consider the following:
a. Apply to the subject matter of the dispute rules agreed upon by the arbitration parties. If they agree on applying the law of a given country, then the substantive rules of that country shall apply, excluding rules relating to conflict of laws, unless agreed otherwise.
b. If the arbitration parties fail to agree on the statutory rules applicable to the subject matter of the dispute, the arbitration tribunal shall apply the substantive rules of the law it deems most connected to the subject matter of the dispute.
c. When deciding the dispute, the arbitration tribunal shall take into account the terms of the contract subject of the dispute, prevailing customs and practices applicable to the transaction as well as previous dealings between the two parties.
2. If the two parties to arbitration expressly agree to authorize the arbitration tribunal to settle the dispute amicably, it may rule on the dispute in accordance with the rules of equity and justice.
For SCCA arbitrations, Article 31 of the SCCA Arbitration Rules provides that the applicable law shall be as follows:
1) Without prejudice to the rules of Sharia, the Tribunal shall apply the rules of law designated by the parties as applicable to the substance of the dispute. Failing such designation by the parties, the Tribunal shall apply the law it determines to be appropriate.
2) If the two parties to arbitration expressly agree to authorize the Tribunal to decide the dispute equitably, it may rule on the dispute in accordance with the principles of equity and justice.
3) In all cases, the Tribunal shall decide in accordance with the terms of the contract, if any, and shall take into account any usage of trade applicable to the transaction.
4) This set of Rules will apply without prejudice to the rules of Sharia, and any international convention(s) to which the Kingdom is a party.
Are any types of dispute considered non-arbitrable? Has there been any evolution in this regard in recent years?
Under the KSA Law of Arbitration, the non-arbitrable types of disputes include personal status and matters wherein conciliation is not permitted, such as Hudud.
In your country, are there any restrictions in the appointment of arbitrators?
Under Article 13 of the Law of Arbitration, when multiple arbitrators are appointed, they shall be odd in number, otherwise the arbitration shall be void.
Article 14 of the Law of Arbitration requires an arbitrator to be:
1. of full legal capacity;
2. of good conduct and reputation; and
3. holding a university degree in Shariah or Law.
If the arbitration tribunal is composed of more than one arbitrator, it is sufficient that the chairman meets the above requirements.
Article 16(1) of the Law of Arbitration requires an arbitrator to have no vested interest in the dispute.
Are there any default requirements as to the selection of a tribunal?
Article 15 of the Law of Arbitration sets out the guidelines for selecting an arbitral tribunal. In essence, the two parties to the arbitration shall appoint the arbitrators.
Should the parties fail to reach an agreement, and the tribunal is composed of one arbitrator, then the competent court shall appoint the arbitrator. If the tribunal is composed of three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third, presiding arbitrator. If a party fails to appoint his arbitrator or if the two appointed arbitrators fail to agree on appointment of the third, the competent court shall appoint this third arbitrator.
Can the local courts intervene in the selection of arbitrators? If so, how?
The KSA Law of Arbitration requires the appellate court appointing the arbitrators to observe the conditions stipulated in the arbitration agreement as well as the conditions required under its law. The decision of the appellate court appointing the arbitrator shall not be independently subject to any form of appeal.
The appellate court, upon the petition filed by the party seeking to expedite the arbitration, shall appoint the arbitrators in the following situations:
1. the arbitration parties fail to appoint the arbitrators and reach an agreement or a party fails to appoint its arbitrator within fifteen (15) days from receipt of a petition from the other party; and
2. the two appointed arbitrators fail to agree on appointment of the umpire within fifteen (15) days from date of appointment of the last arbitrator.
The appellate court, also upon the petition filed by the party seeking to expedite the arbitration, shall take the necessary measures or actions in the following situations (unless the agreement provides for other means for completing such measure or action):
1. the two parties to the arbitration fail to agree on the procedures for appointment of arbitrators;
2. one party thereof fails to adhere to such procedures;
3. the two appointed arbitrators fail to agree on a matter that requires their agreement; and
4. a third party fails to perform a function entrusted thereto under such procedure.
Can the appointment of an arbitrator be challenged? What are the grounds for such challenge? What is the procedure for such challenge? Has there been an increase in number of challenges in your jurisdiction?
Article 16(2) of the Law of Arbitration provides that an arbitrator shall be barred from considering or hearing a case for the same reasons for which a judge can be barred, even if neither party so requests.
As per the Saudi Law of Procedure before Sharia Courts, the appointment of arbitrators can thus be challenged if any of the following occurs:
1. either the arbitrator or his/her spouse has a case similar to the case before the arbitrator;
2. the arbitrator, or his/her spouse, has a dispute with a litigant or his/her spouse after the lawsuit was filed and pending with the judge, unless that [latter] lawsuit was filed with the intention of disqualifying him/her from considering the case before the arbitrator;
3. the arbitrator’s divorcee with whom he has a child or one of his relatives or in-laws up to the fourth degree has a dispute before the judiciary with a litigant in the case, or with his wife, unless the case was brought with the intention of disqualifying the arbitrator;
4. a litigant is the arbitrator’s servant or the judge had habitually dined or lived with him/her, or if he had received a gift from him shortly before the lawsuit was filed or thereafter; or
5. if enmity or friendship exists between the arbitrator and a litigant such that it is likely he/her would not be able to judge impartially.
In addition, Article 16(3) of the Law of Arbitration provides more generally that an arbitrator may be challenged in the presence of circumstances giving rise to justifiable doubts as to his impartiality or independence, or if he lacks the qualifications agreed to by the parties.
Further, under Article 18(1), the appellate court may dismiss an arbitrator when it causes unjustifiable delay to the arbitration proceedings.
As far as we are aware, there are no statistics available revealing the frequency of arbitrator challenges being raised in court.
What happens in the case of a truncated tribunal? Is the tribunal able to continue with the proceedings?
Article 17(3) of the Law of Arbitration states that the submission of a disqualification petition before an arbitration tribunal shall result in suspension of the arbitration proceedings. An appeal against the arbitration tribunal's decision rejecting the disqualification petition shall not result in suspension of the arbitration proceedings.
Article 17(3) of the Law of Arbitration provides that if the petition to disqualify an arbitrator is accepted, whether by the arbitration tribunal or by the competent court when considering an appeal, all previous arbitration procedures, including the arbitration award, shall be deemed null and void.
Article 19 of the Law of Arbitration states that, if the mandate of an arbitrator expires due to death, disqualification, dismissal, recusal, disability or any other reason, a replacement shall be appointed according to the procedures followed in the appointment of the arbitrator whose mandate has expired.
Therefore, the arbitral tribunal shall continue if a replacement was appointed.
Are arbitrators immune from liability?
Neither the Law of Arbitration nor its Implementing Regulations address arbitrator liability.
Under general Shariah principles, an arbitrator may be held liable for losses caused by intentional wrongful behavior or gross negligence.
Article 16 of the SCCA Arbitration Rules provides that members of the tribunal, the emergency arbitrator, the administrator and the SCCA board shall not be liable to any party for any act or omission in connection with any arbitration under these rules, except to the extent that such a limitation of liability is prohibited by applicable law.
Is the principle of competence-competence recognised in your country?
Yes. Article 20(1) of the Law of Arbitration provides that "the arbitration tribunal shall decide on any pleas related to its jurisdiction, including those based on absence of an arbitration agreement, expiry or nullity of such agreement or non-inclusion of the dispute subject-matter in the agreement."
What is the approach of local courts towards a party commencing litigation in apparent breach of an arbitration agreement?
Article 11 of the Law of Arbitration provides that a court before which a dispute, which is the subject of an arbitration agreement, is filed shall dismiss the case if the defendant raises such defense before any other claim or defense. This shall not preclude the commencement or continuation of the arbitration proceedings or the rendering of the arbitration award.
How are arbitral proceedings commenced in your country? Are there any key provisions under the arbitration laws relating to limitation periods or time bars of which the parties should be aware?
Article 27(1) of the Law of Arbitration states that the arbitration proceedings will commence on the day a request for arbitration made by one arbitration party is received by the other party, unless otherwise agreed by both parties.
Article 3 of the Implementing Regulations states that, in the absence of a special provision of law, the periods mentioned in the Law and its implementing regulations shall commence on the following day of the notification unless otherwise agreed by the parties.
Article 11 of the Implementing Regulations states that in case of multiple parties of arbitration, the procedures shall commence on the day on which the last party receives the arbitration request.
As regards limitation periods and time bars, as a general Sharia principle, claimants never lose their legal right as a result of the passage of time. However, in practice, KSA courts may refuse to hear cases when claimants fail timely to raise their claims, i.e. after a long period of time has elapsed since the basis for the claim has arisen, unless claimants provide a legitimate justification for the delay in bringing their claim.
What happens when a respondent fails to participate in the arbitration? Can the local courts compel parties to arbitrate?
To our knowledge, there is no legal authority that suggests that Saudi courts will compel parties to arbitrate. However, when a valid arbitration agreement/clause is present in a contract, Saudi courts will refuse to hear the case.
Article 35 of the Law of Arbitration states that if either party fails to appear at a hearing after notification or to submit required documents, the arbitration tribunal may continue the arbitration proceedings and issue an award in the dispute, based on available evidence.
In what circumstances is it possible for a state or state entity to invoke state immunity in connection with the commencement of arbitration proceedings?
The regulations of the KSA generally prohibit the government and government bodies from resorting to arbitration.
Article 10(2) of the Law of Arbitration states that government bodies may not agree to enter into arbitration agreements except upon approval by the Prime Minister, unless allowed by a special provision of law.
In what instances can third parties or non-signatories be bound by an arbitration agreement or award? Can local courts order third parties to participate in arbitration proceedings in your country?
Neither the Law of Arbitration nor its implementing regulations expressly address this question. The language of relevant rules, including ones relating to awards and enforcement, is limited to governing the parties to the arbitration. It should be noted, however, that as a matter of Saudi Companies law, shareholders may lose their limited liability status assuming certain guidelines are violated.
Article 13 of the Implementing Regulations to the Law of Arbitration provides that the arbitration tribunal may allow the intervention of a third party or join a third party subject to agreement of the parties to the arbitration and the third party.
For SCCA arbitrations, Article 7 of the Saudi Center for Commercial Arbitration (SCCA) Arbitration Law allows joinders, where:
1) a party wishing to join an additional party to the arbitration shall submit to the Administrator a notice of arbitration against the additional party. No additional party may be joined after the appointment of any arbitrator, unless all parties, including the additional party, otherwise agree. The party wishing to join the additional party shall, at that same time, submit the notice of arbitration to the additional party and all other parties. The date on which such notice of arbitration is received by the Administrator shall be deemed to be the date of the commencement of arbitration against the additional party. Any joinder shall be subject to the appointment of arbitrators provisions included in these Rules;
2) the request for joinder shall contain the same information required of a notice of arbitration and shall be accompanied by the appropriate filing fee;
3) the additional party shall submit an answer in accordance with the provisions of Article 5; and
4) the additional party may make claims, counterclaims, or assert set-offs against any other party in accordance with the provisions of Article 5.
What interim measures are available? Will local courts issue interim measures pending the constitution of the tribunal?
Article 22 of the Law of Arbitration states that the competent court may, upon the request of either party, order provisional or precautionary measures prior to commencing arbitration proceedings, or upon request by the arbitration tribunal during arbitration proceedings. Said measures may be revoked in the same way, unless otherwise agreed by the two parties to arbitration.
Article 23(1) of the Law of Arbitration provides that the arbitration tribunal shall, upon the request of either party, order either party to take, as it deems fit, any provisional or precautionary measures required by the nature of the dispute. The arbitration tribunal may require the party requesting such measures to provide sufficient financial guarantee for the execution of such measures.
As regards SCCA arbitrations, Article 6(1) of the SCCA Arbitration Rules provides emergency, provisional and precautionary measures, in which a party may apply for emergency relief before the constitution of the tribunal.
After the constitution of a tribunal, Article 23(1) of the SCCA Arbitration Rules provide that at the request of any party, the tribunal may order or award any interim, provisional or precautionary measures it deems necessary, including injunctive relief and measures for the protection or conservation of property. Article 23(2) provides that an interim measure may be for example and without limitation, to:
a) maintain or restore the status quo pending determination of the dispute;
b) take action that would prevent, or refrain from taking action that is likely to cause, (i) current or imminent harm or, (ii) prejudice to the arbitral process itself;
c) provide a means of preserving assets out of which a subsequent Award may be satisfied; or
d) preserve evidence that may be relevant and material to the resolution of the dispute.
Are there particular rules governing evidentiary matters in arbitration? Will the local courts in your jurisdiction play any role in the obtaining of evidence?
Neither the KSA Law of Arbitration, nor its Implementing Regulations, nor the SCCA Arbitration Rules impose limitations on evidence, assuming such evidence does not violate principles of Sharia.
What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your country?
Neither the Law of arbitration, nor its Implementing Regulations set out a code of conduct specific to legal counsel. However, for this purpose, the Saudi Code of Law Practice, may be consulted. The Code of Law Practice was promulgated by Royal Decree No. M/38 dated 28/7/ 1422H (October 15, 2001), and is available on the Saudi Bureau of Experts’ website (https://www.boe.gov.sa/ViewSystemDetails.aspx?lang=en&SystemID=126&VersionID=156).
Generally, the KSA requires arbitrators to be of a good conduct, holding a bachelor degree of Shariah or law and shall be bound by the ethical codes and other professional standards of the state in which the parties are admitted to practice law.
Article 13 of the Law of Arbitration provides that arbitrators shall be of full legal capacity, good conduct and reputation and holding a bachelor degree of Shariah or Law.
The SCCA Arbitration Rules do not mention any specific ethical codes or professional standards for arbitrators other than them being a dedicated arbitrator.
How are the costs of arbitration proceedings estimated and allocated?
The Law of Arbitration gives the parties the right to specify arbitrators’ costs. Article 24 provides:
1) Upon appointment of an arbitrator, a separate contract shall be concluded with the arbitrator specifying fees.
2) In the absence of such agreement, the competent court shall decide the matter pursuant to a non-appealable decision. If the arbitrators are appointed by the competent court, said court shall determine their fees.
The SCCA Arbitration Rules specify the costs of arbitration. Article 34(1) provides that the tribunal shall fix the costs of arbitration in its award. The tribunal may allocate such costs among the parties if it determines that allocation is reasonable, taking into account the circumstances of the case including the extent to which each party has conducted the arbitration in an expeditious and cost-effective manner.
Such costs may include fees and expenses of the arbitrators, costs of assistance required by the Tribunal, including its experts, fees and expenses of the Administrator, reasonable legal and other costs incurred by the parties, any costs incurred in connection with a notice for interim or emergency relief pursuant to Articles 6 or 23, and any costs associated with information exchange.
Article 3(1) of the Appendix Arbitration Costs and Fees to the SCCA Arbitration Rules provides that the final fee shall be determined based on the sum in dispute in accordance with the SCCA guidelines.
Can pre- and post-award interest be included on the principal claim and costs incurred?
As the KSA applies the rules and principles of Shariah, pre- and post-award interest cannot be incurred since interests are in violation of Shariah.
What legal requirements are there in your country for the recognition of an award?
Article 53 of the Law of Arbitration provides that the request for enforcement of an arbitral award shall be accompanied with the following:
1. the original award or an attested copy thereof;
2. a true copy of the arbitration agreement;
3. an Arabic translation of the arbitration award attested by an accredited authority, if the award is not issued in Arabic; and
4. a proof of the deposit of the award with the competent court.
What is the estimated timeframe for the recognition and enforcement of an award? May a party bring a motion for the recognition and enforcement of an award on an ex parte basis?
The timeframe for the enforcement of the award will likely depend on the schedule of the Enforcement Court and will usually be between 60 to 120 days.
A party may not bring a motion for the recognition and enforcement of an award on an ex parte basis.
Does the arbitration law of your country provide a different standard of review for recognition and enforcement of a foreign award compared with a domestic award?
The law of Saudi Arabia requires different standard of review for recognition and enforcement of a foreign award. Pursuant to the KSA Law of Enforcement, the foreign arbitral award may only be enforced on the basis of principles of reciprocity and the enforcement judge shall ensure the following:
1. the Saudi courts do not have jurisdiction with regards to the dispute;
2. the litigants, in the case the award was rendered, were properly represented and were able to defend themselves;
3. the award is in final form as per the law of the court that rendered the contested decision;
4. the award does not contradict a judgment or order issued on the same subject by a judicial authority of competent jurisdiction in the Kingdom; and
5. the award does not contain anything that contradicts Saudi public policy.
Does the law impose limits on the available remedies? Are some remedies not enforceable by the local courts?
There is no statutory cap on remedies. Any award, irrespective of how large it may be, is enforceable so long as the party has a legitimate case.
There are, however, some types of remedies that are contrary to Sharia and not enforceable. These include punitive damages, and any amount that includes interest charges.
In addition, damages awarded in Saudi courts are ordinary limited to actual, quantifiable, and direct damages. Indirect or consequential damages, such as loss of anticipated profits are not ordinarily recoverable.
Can arbitration proceedings and awards be appealed or challenged in local courts? What are the grounds and procedure?
Arbitration awards are not subject to appeal. An action to nullify an arbitration award may only be admitted in the following cases:
1. if no arbitration agreement exists, or if such agreement is void, voidable, or terminated due to expiry of its term;
2. if either party, at the time of concluding the arbitration agreement, lacks legal capacity, pursuant to the law governing his/her capacity;
3. if either arbitration party fails to present his defense due to lack of proper notification of the appointment of an arbitrator or of the arbitration proceedings or for any other reason beyond his/her control;
4. if the arbitration award excludes the application of any rules which the parties to arbitration agree to apply to the subject matter of the dispute;
5. if the composition of the arbitration tribunal or the appointment of the arbitrators is carried out in a manner violating the Arbitration Law or the agreement of the parties;
6. if the arbitration award rules on matters not included in the arbitration agreement (nevertheless, if parts of the award relating to matters subject to arbitration can be separated from those not subject thereto, then nullification shall apply only to parts not subject to arbitration); or
7. if the arbitration tribunal fails to observe conditions required for the award in a manner affecting its substance, or if the award is based on void arbitration proceedings that affect it.
The competent court considering the nullification action shall, on its own initiative, nullify the award if it violates the provisions of Sharia and public policy in the KSA or the agreement of the arbitration parties, or if the subject matter of the dispute cannot be referred to arbitration under this Law.
Can the parties waive any rights of appeal or challenge to an award by agreement before the dispute arises (such as in the arbitration clause)?
The parties may not waive the right to challenge an award by agreement.
To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
As previously mentioned, the Saudi government and government bodies are prohibited from resorting to arbitration, and may only do so only after obtaining the approval of the Prime Minister.
Assuming an approval from the Prime Minister is granted and a government body enters into an arbitration proceeding, if an award is rendered against a government body, the typical enforcement courts will not have jurisdiction to enforce awards against such government body. Rather, the Royal Court will be the court with competent jurisdiction to enforce awards against government bodies.
To what extent might a third party challenge the recognition of an award?
The recognition of an award cannot be challenged unless by parties who have a direct interest in the case.
Have there been any significant developments with regard to third party funding in your jurisdiction recently?
Neither the KSA Law of Arbitration nor the the SCCA Arbitration Rules address the issue of third-party funding. As such, there are no clear regulations governing third-party funding in Saudi Arabia. To our knowledge, there is no available record of the whether there has been any cases involving third party funding in the KSA.
Is emergency arbitrator relief available in your country? Is this frequently used?
Yes. The SCCA recognizes, and provides full procedural details regarding emergency relief under Article 6 of the SCCA Arbitration Rules. To our knowledge, there is no available track record of the frequency of its use.
Are there arbitral laws or arbitration institutional rules in your country providing for simplified or expedited procedures for claims under a certain value? Are they often used?
Yes. The SCCA recognizes expedited procedures. As an appendix to the SCCA Arbitration Rules "[t]he Expedited Procedure Appendix, in force as of October 15, 2018 – Safar 6, 1440 provides parties with a fast track, simplified and reduced cost procedure. The Expedited Procedure shall apply in any case where the aggregate amount in dispute does not exceed 4,000,000 SAR exclusive of costs of arbitration if the arbitration agreement was concluded after October 15, 2018." To our knowledge, there is no available track record of the frequency of its use.
Have there been any mass (arbitration) claims in your jurisdiction?
The relevant arbitration laws in the KSA do not create any limitations on mass arbitrations. However, there are no precedents available on whether mass arbitrations have taken place in the KSA.
Have measures been taken by arbitral institutions in your country to promote transparency in arbitration?
The SCCA is supportive of and promotes transparency in arbitration proceedings.
Generally, the KSA has attempted to improve transparency in its judicial system by publishing, for the first time, hundreds of court judgments in 2013.
Is diversity in the choice of arbitrators and counsel (e.g. gender, age, origin) actively promoted in your country? If so, how?
The SCCA has created a new list of arbitrators that promotes diversity. This list includes around 200 arbitrators with different backgrounds, speaking different languages, and coming from a wide range of professions. This list, however, is not yet publicly available.
Have there been any developments regarding mediation in your jurisdiction?
Yes, mediation in the KSA is provided for in the SCCA Mediation Rules which came into effect on 31 July 2016. There is currently no state legislation governing mediation in the KSA.
Have there been any recent court decisions in your country considering the setting aside of an award that has been enforced in another jurisdiction or vice versa?
Yes, if such an award was not in compliance with the principles of Shariah or public law.
Is corruption an issue that is regularly raised in your jurisdiction? What standard do local courts apply for proving of corruption?
The KSA seeks to eliminate corruption through the National Anti-Corruption Commission (Nazaha) which aims for a transparent governmental system by applying the Kingdom’s anti-corruption laws and regulations such as, the Anti-Money Laundering Law (2012), Anti-Concealment Law (2004) and Anti-Bribery Law (1992).