SAUDI ARABIA Law and Practice Contributed by: Zeyad Khoshaim, Abdullah Alajlan, Kamil Mehiz and Sarah Sedky, K&A
Additionally, Article 12 requires the court to refer the parties to arbitration if an agreement to resort to arbi - tration is reached while the dispute is being consid - ered before the competent court. There have been few instances where courts have denied requests to compel arbitration due to viola - tions of the arbitration agreement, such as failing to follow agreed-upon pre-arbitration steps. Recently, however, courts have generally deferred these mat - ters to the arbitral tribunal, in accordance with Article 20 of the Arbitration Law. 5.6 Jurisdiction Over Third Parties Although the Arbitration Law does not address multi - party arbitration directly, Article 13 of the Implement - ing Regulations allows the arbitral tribunal to approve the intervention or joinder of a third party, provided that all parties, including the third party, give their explicit consent. In the absence of such consent, the tribunal cannot assume jurisdiction over third parties. Under Article 23 of the Saudi Arbitration Law, an arbitral tribunal is permitted to award preliminary or interim relief if granted the authority to do so by the parties. Therefore, the tribunal may, at the request of either party, issue provisional or precautionary meas - ures as deemed necessary based on the nature of the dispute. The tribunal may also require the requesting party to provide a financial guarantee to cover the enforcement of these measures. If the party against whom the order is issued fails to comply, the tribunal can authorise the other party to take necessary steps to enforce the order or request enforcement from the competent authority. The tribunal’s interim measures are binding and enforceable. 6.2 Role of Courts The competent Saudi court can order provisional or precautionary measures. Parties can file such requests prior to commencing arbitration proceed - ings, or upon request by the arbitral tribunal during arbitration proceedings (see Article 22 (1) of the Saudi Arbitration Law). 6. Preliminary and Interim Relief 6.1 Types of Relief
Although the Saudi Arbitration Law does not specifi - cally address whether interim relief can be granted in support of foreign-seated arbitration, there is no indication that it would be excluded if the Saudi court has jurisdiction to hear the interim relief request. The Arbitration Law does not mention emergency arbitrators. However, under the 2023 SCCA Arbitration Rules (ie, the leading arbitration rules in the Kingdom) an emergency arbitrator can issue interim orders (see 2023 SCCA Rules, Appendix III, Article 7 (2)). These orders have the same effect as those issued in regular arbitration. The interim award or order is binding from the date it is issued, and the parties agree to comply immediately, waiving any rights to appeal or judicial review. The 2023 SCCA Rules, Appendix III, Article 7 (3) grants the emergency arbitrator the power to award provisional or precautionary measures deemed nec - essary, including maintaining or restoring the status quo, preventing imminent harm, providing injunctive relief or preserving evidence relevant to the dispute. If a party fails to comply with precautionary meas - ures issued by the arbitral tribunal, the other party may seek assistance from the competent authority to enforce these measures, as outlined in Article 22 of the Arbitration Law. 6.3 Security for Costs Saudi law does not cover security for costs when filing claims. Additionally, it is uncommon for Saudi courts to require claimants to provide security for costs in disputes before Saudi courts. However, Article 54 of the Saudi Arbitration Law allows a court to require a guarantee or financial secu - rity when it orders the suspension of enforcement of an award. The Saudi Enforcement Law further permits enforcement courts to mandate security for claims through the precautionary sequestration of movable and immovable assets (see Articles 32 and 42 of the Saudi Enforcement Law). The applicant might need to provide cross-indemnity secured by a bank guarantee to cover any costs or losses incurred by the debtor due to these measures.
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