"How can the challenges of cross-border enforcement and legal uncertainty be overcome to effectively enforce foreign arbitral awards in the Kingdom of Saudi Arabia (KSA), in light of its drive towards becoming an international arbitration hub and the intrinsic challenges posed by Shari’ah law?".

Abstract

The issue of enforcement of cross border “foreign arbitral awards” in the Kingdom of Saudi Arabia has long presented risks for international investors. Dating back to the seminal cases of ARAMCO and the equally well know Jadwel investors and parties to contracts with Saudi based entities have noted concerns regarding the risk of arbitrability of the agreements, and enforcement of ensuant awards, particularly if they had been granted in other jurisdictions. These risks and challenges are directly relative to the centrality of Shari’ah law in the KSA judicial architecture and the roles previously of the specific quasi-judicial committee, such as the Board of Grievances annulment of awards on the merits, which undermines the principle of finality and the assurance that arbitration brings to parties in dispute for a timely resolution. However, the Kingdom of Saudi Arabia has undergone a transformation in Arbitration Practice, bringing it closer into alignment with international standards. The New Arbitration Law [2012] and New Enforcement Law [2012] are central to these reforms, alongside the development of The Saudi Centre for Commercial Arbitration. Notwithstanding, enforcement of foreign arbitral awards remains subject to question. Problems persist particularly in respect of the issue of public policy and Shari’ah law compliance. It is the position of this researcher, that in order to attract foreign investment in line with the Saudi Vision 2030, these issues regarding enforcement of foreign awards must be understood and addressed. Therefore, this thesis examines the background to Saudi arbitration practice, and in particular focuses on enforcement of a foreign award against an entity in the KSA. This thesis offers comparative analysis with the United Kingdom and Singapore to contrast and highlight the strengths and limitations of Saudi Arabia's legal framework. Identifying the key obstacles in enforcement, in particular, the broad application of the public policy exception, Shari’ah compliance and judicial discretion, which contribute to the unpredictability in enforcement outcomes. The findings and recommendations subsequently suggest that while significant progress has been made, further refinement is needed to ensure legal certainty and attract international investment.