The Law of Arbitration in the Kingdom of Saudi Arabia is a set of legal rules governing the operations and procedures of arbitration, as well as the process for resolving arbitration disputes in the Kingdom. It was issued on April 16, 2012.
Characteristics of the Law of Arbitration in Saudi Arabia
The provisions of the Law of Arbitration in the Kingdom apply to any arbitration regardless of the nature of the legal relationship subject of the dispute if this arbitration takes place in the Kingdom or is an international commercial arbitration taking place abroad and the parties thereof agree that the arbitration may be subject to the provisions of this law.
The law defines the Arbitration Tribunal as a sole arbitrator or a panel of arbitrators in charge of deciding a dispute referred to arbitration. The competent court having legal jurisdiction to decide disputes agreed to be referred to arbitration.
The arbitration agreement may be concluded either before or after the occurrence of the dispute, and must be in writing; otherwise, it may be void. It must also be issued by both arbitration parties. An arbitration clause that forms part of a contract may be treated as an agreement independent of the other terms of the contract. The nullification, revocation, or termination of the contract which includes said arbitration clause may not entail nullification of the arbitration clause therein.
The two parties to arbitration may agree on the procedures to be followed by the arbitration tribunal and in the absence of such agreement, the arbitration tribunal may, subject to the provisions of Sharia and this law, adopt the arbitration proceedings it deems fit.
The arbitration tribunal may hold hearings to enable each of the two parties to present his case and submit his arguments and evidence. It may, unless the two parties to the arbitration agree otherwise, deem the submission of written briefs and documents sufficient for adjudicating the dispute.
International arbitration under the Law of Arbitration
The Law of Arbitration in the Kingdom stipulates that arbitration must be international if the dispute is related to international commerce, in the following cases:
- If the head office of the parties to an arbitration agreement is located in more than one country at the time of conclusion of the arbitration agreement.
- If the head office of the two parties to arbitration is located in the same country at the time of conclusion of the arbitration agreement and one of the following places is located outside said country, the venue of arbitration as determined by or pursuant to the arbitration agreement, any place where a substantial part of the obligations arising from the commercial relationship between the two parties is executed, and the place most connected to the subject matter of the dispute.
- If both parties agree to resort to an organization, standing arbitration tribunal, or arbitration center situated outside the Kingdom.
- If the subject matter of the dispute covered by the arbitration agreement is connected to more than one country.
Arbitrator conditions under the Law of Arbitration
The Arbitration Law specifies certain conditions for arbitrators, which include: Being of full legal capacity, being of good conduct and reputation, being a holder of at least a university degree in Sharia or law. If the arbitration tribunal is composed of more than one arbitrator, it may be sufficient that the chairman of the tribunal meets such requirements.
An arbitrator must not have any vested interest in the dispute. He may also disclose to the arbitration parties in writing, from the time of his appointment and throughout the arbitration proceedings, any circumstances likely to give rise to justifiable doubts as to his impartiality or independence, unless he has already informed them thereof.
An arbitrator may not be disqualified except in the presence of circumstances giving rise to justifiable doubts as to his impartiality or independence, or if he lacks the qualifications agreed upon by the arbitration parties, and neither arbitration party may disqualify an arbitrator appointed by him, or in whose appointment he participated, except for reasons that became known after the appointment of such arbitrator.
Language of proceedings in the Law of Arbitration
The Law of Arbitration in the Kingdom stipulates that the arbitration must be conducted in Arabic unless the arbitration tribunal or the two parties to the arbitration agree on another language(s). Such agreement or decision may apply to the language of the written statements and notes, oral arguments, and any decision, message, or award made by the arbitration tribunal, unless otherwise agreed upon by both parties or decided by the arbitration tribunal.
The arbitration tribunal may require that all or some of the written documents submitted in the case be accompanied by a translation into the language or languages used in the arbitration. In case of multiple languages, the arbitration tribunal may limit the translation to some of them.
Hearings in the Law of Arbitration
The arbitration tribunal may hold hearings to enable each of the two parties to present his case and submit his arguments and evidence. It may, unless the two parties to arbitration agree otherwise, deem the submission of written briefs and documents sufficient for adjudicating the dispute.
The two parties to the arbitration must be given sufficient advance notice at the addresses they provided to the arbitration tribunal of the date of any hearing, award pronouncement, and any meeting of the arbitration tribunal for the purpose of inspecting the subject matter of the dispute or any other property or the examination of documents.
The arbitration tribunal records the summary of each hearing in minutes signed by the witnesses, experts, attending parties or their agents, and members of the arbitration tribunal. A copy thereof may be delivered to each party unless the two parties to arbitration agree otherwise.
If the arbitration tribunal is composed of more than one arbitrator, its decision must be made by the majority vote of its members. Deliberation must be confidential. If members of the arbitration tribunal fail to reach an agreement and a majority decision is not attainable, the arbitration tribunal may appoint a casting arbitrator within fifteen days from the date of its decision regarding the same. Otherwise, the competent court may appoint a casting arbitrator.
End of arbitration proceedings
The Law of Arbitration in the Kingdom specifies that arbitration proceedings end with the issuance of the final award resolving the dispute or by the issuance of the award ending the dispute or by the issuance of a decision by the arbitration tribunal to end the proceedings in the following cases: If both parties agree to terminate the arbitration proceedings. If the plaintiff abandons the arbitration case, unless the arbitration tribunal decides, upon the defendant’s request, that the latter has a genuine interest in the continuation of the arbitration proceedings until the dispute is decided. If the arbitration tribunal deems, for any other reason, the continuation of the arbitration proceedings pointless or impossible. The arbitration proceedings may not terminate upon the death of either arbitration party or loss of his legal capacity unless a person with capacity in the dispute agrees with the other party to terminate the arbitration. In such case, the deadline for the arbitration may be extended for thirty days, unless the arbitration tribunal decides to extend it for a similar period or the parties to arbitration agree otherwise.
Issuance of the award in the Law of Arbitration
According to the Law of Arbitration in the Kingdom, the arbitration award may be made in writing and must be reasoned and signed by the arbitrators. The arbitration award must include the date of pronouncement and place of issuance; the names and addresses of the parties to the dispute; the names of the arbitrators as well as their addresses, nationalities, and capacities; a summary of the arbitration agreement and of the parties' statements, pleadings, and documents; a summary of the expert report (if any); and a text of the award. The award may also determine the arbitrators’ fees, costs of arbitration, and their distribution between the parties.
The arbitration tribunal must deliver to each arbitration party a true copy of the arbitration award within fifteen days from its date of issuance, and the award or any part of it shall not be published except with the written consent of both parties.
Nullification of arbitration award
According to the Law of Arbitration in the Kingdom, an action to nullify an arbitration award may not be admitted except in the following case: If no arbitration agreement exists, or if such agreement is void, voidable, or terminated due to the expiry of its term, if either party, at the time of concluding the arbitration agreement, lacks, or partially lacks legal capacity, pursuant to the law governing his capacity. If either arbitration party fails to present his defense due to lack of proper notification of the appointment of an arbitrator or the arbitration proceedings, or for any other reason beyond his control. If the arbitration award excludes the application of any rules which the parties to the arbitration agree to apply to the subject matter of the dispute. If the arbitration tribunal fails to observe the conditions required for the award in a manner that affects its substance, or if the award is based on void arbitration proceedings that affect it.
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