Arbitration Awards in Saudi Arabia play a vital role in resolving commercial disputes efficiently and fairly. With the Kingdom’s Vision 2030 driving economic openness and attracting global investors, arbitration has become an essential mechanism for international compatibility in business relations.

What Are Arbitration Awards in Saudi Arabia?

Arbitration awards are legally binding decisions rendered to resolve disputes between two or more parties, serving as an alternative to litigation before the courts. These awards may be issued under the arbitration rules of a foreign jurisdiction, conducted within the Kingdom, or through international arbitration governed by international agreements.

In Saudi Arabia, arbitration is regulated by the Arbitration Law, issued under Royal Decree No. M/34 dated 24/5/1433H – 14/04/2012 AD. This law grants the disputing parties broad autonomy to shape the arbitration process in line with the nature of their dispute. For instance, hearings are not required to be held in a fixed location, and the parties are free to agree on the language of arbitration, the procedures to be followed, and the applicable governing law—provided that such agreements do not contravene the principles of Islamic Sharia or public order in the Kingdom.

Saudi Arabia is also a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which facilitates the enforcement of arbitral awards issued in other signatory states.

What Are the Conditions for the Validity of Arbitration Awards?

There are several conditions that must be satisfied to ensure the validity of an arbitration agreement. These include:

• Written Form: The arbitration agreement must be in writing; otherwise, it is deemed void, in accordance with Article 9 of the Arbitration Law.
• Legal Capacity: All parties must have the legal capacity to dispose of their rights, either personally or through authorized representatives, as stipulated in Article 10 of the Arbitration Law.
• Mutual Consent: All disputing parties must mutually agree to resort to arbitration, without any form of coercion or undue pressure.
• Arbitrable Subject Matter: The subject of the dispute must be legally eligible for arbitration under Saudi law. It must not contravene public order and must fall within matters that are capable of settlement through conciliation or arbitration.

What Are the Steps for Conducting Arbitration Awards in Saudi Arabia?

Arbitration procedures in Saudi Arabia are governed by the Arbitration Law and its Implementing Regulations. The main steps can be summarized as follows:

• Agreement to Arbitrate: All parties to the dispute must consent to arbitration.
• Commencement of Proceedings: Arbitration begins on the date the respondent receives the arbitration request. In cases involving multiple parties, proceedings commence on the date the last party receives the request.
• Claimant’s Statement: The claimant must submit a written statement including all relevant information about the parties to the dispute and deliver it to the arbitral tribunal within the specified timeframe.
• Respondent’s Statement: The respondent must file a written response to the claimant’s statement, along with any supporting claims or documents, within the deadline set by the arbitral tribunal.
• Hearing Sessions: The arbitral tribunal may hold hearings to allow both parties to present their arguments and evidence. Alternatively, the tribunal may decide the case based solely on written submissions and documents without convening hearings.
• Record of Proceedings: The tribunal shall document all statements made during the hearings in an official record, which must be signed by the witnesses and the parties present.
• Issuance of Award: After completing the required steps, the arbitral tribunal issues its final award, which must be signed by all arbitrators.

Conclusion

In conclusion, we have examined the key aspects of arbitration awards in Saudi Arabia and provided detailed clarification on their significance and procedures.

If you have any questions or require assistance regarding arbitration awards, please do not hesitate to contact us at Mohammed Al-Khilwi Law Office. Our team will be pleased to support you in navigating and completing all legal procedures smoothly and efficiently.

Disclaimer: This content is not legal advice. No liability is assumed. For legal consultation, please contact us.