Saudi Public Policy and International Arbitration

Abstract

International commercial arbitration has been increasingly popular for resolving disputes among parties and for its intrinsic feature of an alternative dispute resolution mechanism rather than litigation. Saudi Arabia has gone through reforms, including in its international arbitration law. The reforms mainly focused on the aligning of arbitration and enforcement practices with international conventions and standards. The reforms also tried to address the party’s autonomy and freedom to choose terms and seats for arbitration. In Saudi Arabia, with new Saudi Arbitration Law 2012 focuses on permitting parties to resolve their disputes. However, the Saudi Arbitration Law 2012 succeeded in establishing a legal framework for the Kingdom with three core principles, namely party autonomy, procedural justice and cost-effectiveness, which were based on the UNCITRAL Model Law. Saudi Arabia's Law is mainly influenced by Sharia Law, which creates challenges and barriers in the recognition and enforcement of an award, especially regarding compatibility with international laws and conventions. In the Arbitration Act 1996 (English Law) Section 68(2) (g) and Section 103(3) provide provisions that recognition or enforcement may be refused if contrary to public policy. This research conducted a comparative study between the Saudi Arbitration Law and English Law to critically analyse both jurisdictions regarding the arbitration environment. The analysis revealed that there is general incoherence between domestic and international arbitration mechanisms. It is important for Saudi Arabia to reform its current public policy to ensure transparency and fairness and promote future-oriented arbitration that aligns with Saudi Vision 2023. In this regard, this research undertaken supports four key recommendations: 1) development of the Quasi-Judicial Committee; 2) limiting the power of judges in the refusal of foreign awards; 3) re-defining the incorporation of Sharia Law and its influence on public policy; and 4) the implementation of the core principle of English Law by the Saudi Arbitration Law 2012 through reforms. Finally, the research limitations and future work recommendations are outlined at the end of this research.