Arbitration: Speedy settlement under new rules

RIYADH: The committee chairman of commercial arbitration at the Council of Saudi Chambers shed light on Monday on the advantages of the new Saudi rules of arbitration, including greater transparency, speedy settlement of disputes, and the opportunity given to non-Sharia graduates to arbitrate.
Khalid Abdulaziz Alnowaiser was speaking at a special forum on the new “rules of arbitration and its impact on investment in Saudi Arabia” at the Council of Saudi Chambers (CSC) under the aegis of Bandar bin Salman bin Mohammed, adviser to Custodian of the Two Holy Mosques King Abdullah. The forum was organized by the Commercial Arbitration Center and the International Chamber of Commerce in the Kingdom.
In his presentation, Alnowaiser explained the rules as well as their advantages and disadvantages, stressing that the new rules are considered a real shift in the field of legislation and law, as they have made amendments to many provisions and plugged the gaps in the old system. As a result, the new rules address many of the concerns that were felt by both local and foreign investors about resorting to the Kingdom’s courts because of the slow disposal of cases and delays in the implementation of the provisions.
He said the new system covers, for the first time in the history of the Kingdom, domestic and international laws as well as other important aspects. He added that its text and provisions were derived from the Act on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law in 1985.
The provision of the new rules emphasize the need to establish transparency, as well as to clarify the rules to all parties, including investors, and simplify the arbitration procedures. It also delineated the time frame of the arbitration and the execution of the judgment.
Moreover the new system recognizes modern means of communication, as well as the need to approve international arbitration and specify its status, in addition to the establishment of Saudi arbitration and the eligibility of parties to resort to international arbitration centers. It also allowed parties to resort to international rules not stipulated in the Saudi system.
“These new rules of arbitration will give investors faith in the prompt and speedy settlement of their cases, at a low cost, making the Kingdom a promising investment environment,” explained Alnowaiser.
He made some suggestions, such as drawing contingency plans in case of a contradiction between an article in the new Saudi arbitration rules and the procedural regulations for regional arbitration centers, in order not to tangle the investors into a long procedure. He also stressed the need to work on the development of government agencies and administrative departments that are compatible with what the new arbitration system reached in new measures, so as to ensure the effectiveness of this system.
The new judicial system guarantees the independence of the judiciary in the Kingdom, and the multiple levels of litigation, including the Court of Appeal and the Supreme Court. Furthermore, according to Article 26 of the new rules, investors have the right to resort to arbitration to resolve the dispute even if it is with a state entity.
Alnowaiser also added that the Kingdom has signed several international conventions and treaties on investment, including the convention on the implementation of the provisions issued by the Arab League in 1952 and the New York Convention to implement the provisions of foreign arbitrators in 1958. The Kingdom pledged in 1994 to reinforce implementation of foreign judgments within the Kingdom as internationally recognized.
In his recommendations, Alnowaiser called for the establishment of an independent Saudi Economic Tribunal in addition to the general courts and administrative machinery. This will deal with investment and trade issues only, and will have jurisdiction over the appeals filed against the judgments of the tribunals. As such its judgment shall be final and not subject to appeal.
The recommendations also called for developing a specific mechanism to ensure and activate the New York Convention to reinforce the implementation of foreign verdicts issued in 1994 and other relevant international agreements.
His recommendation also confirmed the need to start holding training sessions for those interested in arbitration domestically and internationally.