SAUDI ARABIA Law and Practice Contributed by: Zeyad Khoshaim, Abdullah Alajlan, Kamil Mehiz and Sarah Sedky, K&A
immediately. These may include attachment of the debtor’s existing and future assets, notices to credit-information agencies, enforcement against amounts owed to the debtor, and other statutory measures (see the New Enforcement Law, Article 18). • Upon the applicant’s request, the Enforcement Court may impose additional measures, including a travel ban and asset-tracing measures, particularly where there are indications that the debtor is con - cealing or dissipating assets (see the New Enforce - ment Law, Articles 19, 20 and 21). • Enforcement procedures are primarily conducted through electronic means. Ordinary procedures may be used where electronic measures are not available or appropriate (see the New Enforcement Law, Article 62). Enforcement When Annulment Proceedings are Commenced Article 54 of the Saudi Arbitration Law specifies that filing a request for annulment does not automatically suspend the execution of the arbitral award. However, the court can grant a stay of execution if requested by a party, provided the request is based on “sound grounds”. The court must make a decision on the stay within 15 days of receiving the petition and may require a bail or financial guarantee. If a stay is granted, the court will decide on the annulment action within 180 days from the date of the stay order. Under Article 55 of the Saudi Arbitration Law, the fol - lowing applies. • A petition for enforcement will not be accepted before the deadline for filing a request for annul - ment has passed. The court will issue an order for enforcement only after verifying that: (a) the award does not conflict with any existing court judgments in Saudi Arabia; (b) the award does not violate Shari’ah or the public policy of the Kingdom of Saudi Arabia – if the award contains both violating and non-vi - olating parts, only the parts that do not violate these principles may be enforced; and (c) the award was properly notified to the party against whom it was rendered.
• An order granting enforcement cannot be appealed, but an order denying enforcement can be appealed within 30 days. • In practice, a competent court would not issue an order declaring the award enforceable until the request for annulment is resolved (usually one deci - sion is issued where the court rejects the annul - ment request and declares the award enforceable). Foreign Awards and Annulment Proceedings Pending at the Seat A foreign arbitral award that has been set aside in the jurisdiction where it was issued will usually not be enforced in Saudi Arabia as long as such award is not considered a final award as per the applicable law in the jurisdiction. If annulment proceedings are ongoing at the seat (and the award is not deemed final in accordance with applicable law in the jurisdiction where it was issued), the Saudi Enforcement Court will reject enforce - ment as such award does not satisfy a condition for enforcement of foreign awards as per Article 11 of the Enforcement Law (and Article 9 of the New Enforce - ment Law). Special Cases Against the Saudi State or a Saudi Governmental Entity If the award pertains to a commercial transaction with the Saudi State or a Saudi governmental enti - ty, enforcement proceedings must be commenced before the specific Administrative Courts (BoG) (see the Law of Enforcement before BoG issued pursuant to Royal Decree No M/15 dated 27/01/1443H (4 Sep - tember 2021G)). The enforcement judge may not issue enforcement against publicly owned assets. 12.3 Approach of the Courts Saudi Arabian courts are generally pro-enforcement regarding arbitral awards. They strictly adhere to the specified grounds for annulment and typically inter - pret the public policy ground narrowly. According to data released by the SCCA in 2022, in collaboration with the Saudi Ministry of Justice, for the period from January to September 2022 (the “Study Period”), Saudi enforcement courts enforced 522 domestic and foreign arbitral awards totalling SAR871
798 CHAMBERS.COM
Powered by FlippingBook