SAUDI ARABIA Law and Practice Contributed by: Zeyad Khoshaim, Abdullah Alajlan, Kamil Mehiz and Sarah Sedky, K&A
• the arbitration agreement must be included in the contract documents; and • contracts performed outside Saudi Arabia are exempt from the value requirement, allowing arbi - tration regardless of contract value, but approval from the Saudi Minister of Finance is needed. 3.2 Arbitrability Under the Saudi Arabian law, certain subject matters are excluded from arbitration. Specifically, Article 2 of the Saudi Arbitration Law states that the provisions of the law do not apply to personal status disputes or matters not subject to reconciliation: • personal status disputes typically involve issues related to family law such as marriage, divorce, child custody, alimony, visitation, endowments, wills, paternity, absence, death, determination of heirs, and inheritance, including real estate dis - putes involving endowments or wills, or matters concerning minors or absentees (see Article 33 of the Saudi Law of Civil Procedures); and • matters not subject to reconciliation refer to issues where settlement is legally prohibited, such as criminal cases against the State, crimes with a prescribed punishment under Shari’ah and matters of public policy. The general approach to determining whether a dis - pute is “arbitrable” in Saudi Arabia involves assessing whether the dispute falls within these excluded cat - egories. If the dispute pertains to personal status or involves issues that cannot be reconciled, it is deemed non-arbitrable and cannot be resolved through arbi - tration. 3.3 National Courts’ Approach In Saudi Arabia, national courts generally do not have the authority to decide on the applicable law in an arbitration agreement as this is left to the par - ties. According to the law and practice, parties to an arbitration agreement typically have the autonomy to determine the applicable law themselves. This choice is usually specified within the arbitration agreement itself or agreed upon during the arbitration proceed - ings. The role of the national courts is primarily to support arbitration proceedings, enforce arbitration agreements, and assist in the recognition and enforce -
ment of arbitral awards, rather than deciding on the substantive law applicable to the dispute. In Saudi Arabia, national courts generally support the enforcement of arbitration agreements. They honour the parties’ choice to use arbitration instead of litiga - tion for resolving disputes. When a dispute is covered by a valid arbitration clause, courts usually enforce the agreement by directing the parties to arbitration. In fact, Article 11 of the Arbitration Law specifies that courts cannot hear a dispute subject to an arbitration clause if the respondent raises a non-jurisdictional defence based on the arbitration clause before pre - senting any other claims or defences. Furthermore, Saudi courts adhere to the principle of competence-competence, which means they recog - nise arbitrators’ authority to determine their own juris - diction. Courts usually intervene minimally in arbitra - tion proceedings, focusing on upholding the parties’ agreement and ensuring compliance with the Saudi Arbitration Law. They also support arbitration when necessary, such as by, for instance, issuing interim orders in support of arbitration (see Article 22 of the Saudi Arbitration Law). However, courts may refuse to enforce arbitration agreements or awards if they conflict with public pol - icy or involve issues considered non-arbitrable under Saudi law. 3.4 Validity Article 21 of the Saudi Arbitration Law embraces the global principle of separability, which treats the arbi - tration agreement as distinct from the main contract. This principle ensures that the arbitration clause is autonomous and independent from the main contract, thereby protecting it from challenges directed at the main contract itself.
4. The Arbitral Tribunal 4.1 Limits on Selection
In Saudi Arabia, parties have complete autonomy in selecting arbitrators, subject to specific conditions outlined in Article 14 of the Saudi Arbitration Law. In short, the chosen arbitrator:
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