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Saudi Arabia modernises its approach to international arbitration

01 May 2014
The Kingdom of Saudi Arabia (the KSA) has recently taken a number of positive steps to modernize its dispute resolution legislation and policies, particularly those relating to arbitration. In 2012 the KSA enacted:

(a) Royal Decree No. M/34 dated 24/05/1433H, corresponding to 16/04/2012 (the Arbitration Law) that introduced significant UNCITRAL-inspired amendments to the old regime; and

(b) Royal Decree No. M/53 dated 13/8/1433H, corresponding to 14/07/2012G  which supplements the Arbitration Law by confirming that applications for the execution of foreign judgments and arbitration awards can be lodged with an execution judge.

Building on this new foundation, the KSA Council of Ministers has recently approved the establishment of the Saudi Centre for Commercial Arbitration (SCCA) based in Riyadh. As with other successful arbitration centres in members-States of the Gulf Co-operation Council (the GCC), the SCCA will operate under the auspices of the local chamber of commerce, the Council of Saudi Chambers.

In providing its approval for the establishment of the SCCA, the Council of Ministers has expressly excluded disputes concerning administrative matters, personal/family law disputes and criminal cases, as well as any other disputes which are not capable of being resolved through private settlement.  It is too early to speculate on the content of SCCA's rules, although they are likely to be based on one of the sets of commonly-used international rules (including the regionally favoured UNCITRAL Rules).

It is clear that steps are being taken to modernise and build an operative and competitive framework for arbitration in the KSA.  Given that the economy is strongly driven by foreign investment in large scale projects these developments will be welcomed by investors.

Mohamed ElGhatit

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