SAUDI ARABIA Law and Practice Contributed by: Andreas Haberbeck, Derayah LLPC
13.3 Circumstances to Challenge an Arbitral Award Article 49 of the Arbitration Regulation, 2012, provides that arbitral awards that are made in accordance with its rules may not be appealed in any form. However, under Article 50 of the Arbitration Regulation, 2012, an application for nullity of an award may be lodged with the competent court, for example, because of procedural defects. Furthermore, Article 50 (1)(d) of the Arbitration Regula- tion, 2012, provides that an award may be declared null if there is a failure to “apply any of the rules of law that the parties to the arbitration had agreed should be applied to the subject matter of the dispute”; and Article 50 (2) of the Arbitration Regulation, 2012, pro- vides that the competent court shall rule of its own motion that an award is void if “it contains material contrary to the provisions of Islamic Law and public order in the Kingdom”. This, obviously, leaves the door open to re-hearings of the dispute, whether the award was rendered in Saudi Arabia or abroad. Nevertheless, unless the par- ties have agreed otherwise, a ruling of nullity by the competent court does not invalidate the agreement to arbitrate. Therefore, in most cases, a ruling of nullity should lead to a new arbitration or to the rectification of the award by the original arbitral tribunal. 13.4 Procedure for Enforcing Domestic and Foreign Arbitration Applications for the enforcement of arbitration awards must be lodged with an enforcement judge. Pursuant to Royal Decree No M/11 of 16 Rajab 1414 Hejra, corresponding to 29 December 1993, Saudi Arabia ratified the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958, with effect from 18 July 1994, albeit subject to an express public policy reservation, which is commonly understood to mean that no part of an award that conflicts with Islamic law is enforceable in Saudi Arabia. Under Article 9 (6) of the Enforcement Regulation, 2012, applications for the execution of foreign arbitra- tion awards must be lodged with an execution judge.
more, it is now possible to conduct arbitrations in Saudi Arabia in a language other than Arabic and to appoint non-Muslim arbitrators. In commercial dis- putes, the parties are free to agree to the procedures of an international arbitration body, such as the Char- tered Institute of Arbitrators or the ICC, or to the pro- cedural rules of another country, or to determine their own procedural rules. Failing such an express choice, the procedural rules applicable under Saudi Arabian law govern the arbitration. New procedures Under the new Arbitration Regulation, 2012, no involvement of the courts is necessary in principle until the award is deposited with the competent court by the arbitral tribunal. Prior to that stage, the involve- ment of the courts will only be necessary if invoked by a party or the arbitrators; for example: • because the parties fail to agree on a sole arbitra- tor; • the respondent fails to appoint its arbitrator within 15 days of having been notified of the claimant’s appointment; • there is an application for the recusal of one or more arbitrators; • the parties or the arbitrators apply for provisional measures; • no agreement is reached with an arbitrator over their fees; or • the arbitrators are unable to reach a decision. 13.2 Subject Matters Not Referred to Arbitration Disputes relating to personal status may not be sub- mitted to arbitration. In general, cases involving the government or government agencies may not be submitted to arbitration without a Royal Order. How- ever, under the Government Tenders and Procurement Regulation, Royal Decree No M/128 of 13 Dhul Qada 1440 Hejra, corresponding to 16 July 2019, disputes under government procurement contracts may be submitted to arbitration with the permission of the Minister of Finance, provided that this takes place before the Saudi Centre for Commercial Arbitration.
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