Tag: Dispute Resolution

KSA construction claims are either against the contractor by the owner or against the owner by the contractor, similarly, construction claims may also be made between the contractor and the subcontractor. They are a prevalent part of the construction business, and their successful management plays a large role in whether the contractor can stay in business long-term. In this highly volatile economy, things are changing at a faster than ever pace. This is your guide to navigating KSA construction claims in the current climate.

Why Do KSA Construction Claims Happen?

Construction claims occur when goals or expectations on either the contractor’s or the owner’s end are not met. In most cases, it is due to a breach in the agreed-upon timeline, services provided, or money. KSA construction claims can happen as a result of errors, change orders, poor project planning, or a change in the scope of the project. If not managed correctly, the successful completion of the project may be at stake.

Proper KSA claim management involves 4 steps:

• Claim prevention – This is when detailed project plans are created, including the scope, requirements, and timeline. After the contract has been enacted, you are no longer allowed to revisit this phase.
• Claim mitigation – Reducing the chance of a claim is best achieved through a realistic and well-developed scope as well as the utilization of risk management plans.
• Pursuing claims – To pursue a claim, the amount of time the project is delayed and/or the additional costs involved should be defined.
• Resolving claims – If parties cannot reach an agreement on their own, then the claim may go into negotiations, arbitration, mediation, and even litigation.

The Rights of Contractual Parties

COVID-19 brought about unprecedented times. Every industry has had to pivot and adjust, including the construction industry. As a result of the pandemic, three doctrines were enacted under KSA law regarding construction claims.

• Force majeure (Quwa Qahira) – A situation in which a construction property is delayed or unable to be completed due to unforeseen circumstances.  The key is that these unforeseen circumstances must be outside of the party’s control.
• Emergency situation (Al Dhorouf Al Tari’a) – A situation in which hardship makes it extremely difficult to complete the job within the defined timeline (however not impossible).
• Impossibility (Istihala) – A project is unable to be completed because it is impossible for one reason or another as a direct result of COVID-19.
• Saudi Law stipulates that during these unprecedented times, one or both parties may have the right to extend or delay deadline, request additional costs, or suspend and terminate the contract.

When Does Force Majeure Take Effect? 

According to the KSA Supreme Court in its decision no. m/45 dated 08/05/1442H, Force Majeure can be enacted if COVID-19 makes it impossible to meet the contract’s terms. The party claiming force majeure must prove beyond a shadow of a doubt that COVID-19 is the reason the project is unable to be completed or must be suspended.

For instance, one of the most well-known byproducts of COVID-19 is the delay in the production and shipment of goods. If you cannot finish a construction project due to the inability to obtain goods in a timely manner, force majeure may be enacted in such circumstances.

When Does Emergency situation (Al Dhorouf Al Tari’a) Take Effect? 

Hardships due to COVID-19 can make it all but impossible to successfully complete a project. Potential hardships due to COVID-19 include:

• Delay in obtaining the required materials.
• Lowered productivity due to social distancing.
• Difficulty accessing the construction site.
• Employees out of work due to COVID-19.

Criteria required to meet the Emergency situation (Al Dhorouf Al Tari’a):

• The contract must have gone into effect prior to COVID-19, meaning that neither party had an opportunity to put provisions in place.
• COVID-19’s effect must be clear and unavoidable.
• COVID-19 is the only cause of the breach of contract.
• The claim has not been settled in any way.
• The effects of the COVID-19 pandemic were not addressed by another specific KSA law or the relevant competent authority.

When Does Impossibility (Istihala) Take Effect? 

Similar to hardship, impossibility or Istihala is a situation in which it is deemed impossible to finish a construction project. In order to avoid a claim, due to impossibility, you must be able to prove that the contract cannot be honored due to the unforeseeable events of COVID-19. A couple of examples include:

• The inability to get the needed materials to continue with or finish the construction project.
• Lack of the needed workforce due to an outbreak of COVID-19 or voluntarily choosing not to work in order to further protect themselves and high-risk family members.

Possible Relief Options Under KSA Law

If your construction claim is deemed to meet the criteria for any of the three doctrines enacted as a result of the pandemic, then the following relief options may be available:

• Payment – The contractor has the right to request additional payment for the project if the cost of materials, labor, and additional resources needed for the job have increased as a result of COVID-19.
• Suspension/termination of contracts – If the other party does not agree to additional payment or an extended deadline, the contract can be suspended until normalcy is restored or terminated.
• Contract amendments – KSA courts may also grant amendments to contracts to reduce required quantities of service when materials are difficult to come by.

The Bottom Line

It is important to note that these are guidelines set forth by the KSA Supreme Court. They do not replace current construction claim Saudi laws but are rather an extension of them due to the extenuating circumstances brought about by COVID-19. The KSA Judiciary is responsible for addressing construction claims that are not able to be resolved between the parties involved.

Hammad & Al-Mehdar are the most trusted attorneys in Saudi Arabia, offering a full suite of business and corporate legal services. We provide a local presence with powerful, international capabilities to ensure you receive unrivaled focus and expertise in all corporate matters, including construction claims. Contact us today for more information on how we can help you with your legal needs.

Even the best-laid plans go awry. While most companies enter into business relationships with the best of intentions, conflicts do occasionally arise. Pursuing resolution through traditional litigation in the courts can be a slow and contentious process. Parties involved in commercial disputes are more and more frequently utilizing mediation to settle their disputes.
Read on to understand more about mediation and the accompanying legal framework in Saudi Arabia.

What is Mediation?

Mediation is a voluntary, alternative form of dispute resolution where the parties discuss their dispute with the assistance of a neutral third party whose goal is to assist them in reaching a settlement. Mediators are individuals trained in negotiation techniques, listening skills, and conversation facilitation. The primary responsibility of the mediator is to:
• Provide an established process for the parties to privately discuss concerns;
• Assist in communicating each party’s point of view;
• Keep meetings focused; and
• Strive to help the parties agree on a resolution to be documented in a binding settlement agreement
Mediation has numerous benefits for the parties involved in the dispute. It is often a more affordable and efficient path to resolution. Mediation is a confidential process that avoids the public spectacle and resulting PR implications of a trial. Mediation is also more likely to preserve the relationship of the disputing parties, as it is more collaborative and less contentious than litigation. An additional benefit of mediation is that it is a preferred method of dispute for international investors. Proactively agreeing to first attempt mediation to resolve commercial disputes can make a business relationship more attractive to foreign entities.

What Rules Govern Mediation in Saudi Arabia?

The rules and procedures governing mediation in Saudi Arabia are defined primarily by (1) the Saudi Center for Commercial Arbitration (SCCA); and (2) Saudi Arabia’s ratification of the Singapore Convention on Mediation.

Saudi Center for Commercial Arbitration

The Saudi Center for Commercial Arbitration (SCCA) is a not-for-profit organization established to administer arbitration procedures for civil and commercial disputes. The parties must agree to refer their dispute to SCCA. SCCA is considered the preferred method of dispute resolution for investors based on its work to create a safe dispute resolution environment for Saudi Arabian nationals and foreign investors.
The SCCA has produced a comprehensive document detailing the rules for mediation performed by SCCA. The parties are authorized to agree on specific mediation rules, but in the absence of such an agreement, the mediation will be governed by the SCCA mediation rules. Notable mediation rules include:
• Appointment of Mediator. The parties can agree to the appointment of a specific mediator. If they do not agree on a mediator, each party shall strike unacceptable names from the list and order the remaining names by preference. The administrator shall then select a mediator based off those lists.
• Mediator Impartiality. The chosen mediator must follow the Code of Ethics for Mediators. Among other things, this requires the mediator to ensure there are no facts that would create a conflict of interest before agreeing to serve as mediator. During the course of mediation, the mediator must disclose any facts they become of aware of that could create a conflict.
• Process. The parties and mediator will conduct a preliminary conference to determine the manner in which the mediation will be conducted, including the mediation timetable. The mediator is authorized to conduct separate meetings with each party and/or their representatives. The parties should voluntarily exchange relevant documents, but the mediator can request that they exchange additional information.
• Settlement. The mediator does not have the power or authority to impose a settlement. Their role is to facilitate agreement between the parties.
• Confidentiality. Mediation conferences and communications are private. Outside parties may only attend with the permission of the parties. The mediator must keep any information divulged throughout the process confidential. The mediator cannot be compelled to share confidential information in any adversarial proceeding or judicial forum. The parties are also required to maintain the confidentiality of the mediation.
• Termination. A mediation is considered termination if:
o The parties sign a settlement agreement;
o The mediator declares that further efforts are not likely to achieve resolution;
o The party declares the mediation proceedings are terminated;
o The administrator provides written notice to the parties of delinquency of payment; or
o Where there has been no communication between the mediator and any party for 21 days after a mediation conference.
The SCCA has been quick to react to changing circumstances, as exemplified by its issuance of a COVID-19 Emergency Mediation Program to ensure prompt and fair resolution of business disputes. Our firm is experienced in representing clients in mediation proceedings in Saudi Arabia in compliance with the SCCA rules and regulations.

Singapore Convention

On May 5, 2020, Saudi Arabia ratified the United Nations Convention on International Settlement Agreements Resulting from Mediation (the “Singapore Convention”). The requirements of the Singapore Convention will enter into force in Saudi Arabia in November 2020.
The Singapore Convention requires signatories to enforce international settlement agreements. The convention details the requirements necessary to establish a valid settlement agreement and instances where a signatory can refuse to enforce. The Singapore Convention is an important missing piece to the international dispute resolution enforcement framework.
Becoming a party to the Singapore Convention is a significant step for Saudi Arabia, demonstrating its commitment to international commercial relationships. When a Saudi Arabian entity seeks mediation with an international entity, it is important to understand the implications of the Singapore Convention and to ensure any written settlement agreement qualifies for international enforcement.

Whether you are drafting a contract that includes a requirement for mediation or you are already embroiled in a dispute, it is important to work with an attorney skilled in representing clients in mediation. The Hammad & Al-Mehdar law firm is a leading legal service provider in Saudi Arabia with over 35 years of experience. We have a long history of successfully assisting clients throughout mediation of commercial disputes. Contact us today to learn how we can help you with your commercial business matters in Saudi Arabia.

The Saudi Arabia judicial system has a long history and continues to see changes and adaptations to address the demands of the country and its citizens. One of the most recent judicial developments is the enactment of the Commercial Courts Law (CCL) by the government of the Kingdom of Saudi Arabia which came into full force and effect on June 8, 2020. The CCL is an effort to streamline and modernize Saudi Arabia’s court system and includes a number of measures that clarify the jurisdiction of Commercial Courts and provide additional efficiency and flexibility making Saudi Arabia a more attractive business market.

Read on to learn more about the CCL, its key features, and implications for foreign investors.

Jurisdiction of the Commercial Courts

The CCL defines and expands the jurisdiction of the Commercial Courts. Previously Commercial Courts existed in major urban centers in Saudi Arabia. The new law requires all general courts to develop judicial circuits to handle commercial disputes including assignment of specific judges with experience in commercial disputes. This mandate ensures that the Commercial Courts will have jurisdiction in every area of Saudi Arabia allowing for consistency in handling commercial matters across the country.

The Commercial Courts handle all disputes related to commercial matters, including the following:

• Disputes between merchants relating to the commercial business or a commercial contract;
• Lawsuits brought under a commercial contract against a trader where the value of the claims exceeds one hundred thousand riyals;
• Disputes between the partners of a Mudarabah (profit-sharing) agreement;
• Claims and violations of
o The Companies Law;
o The Bankruptcy Law;
o Intellectual property laws; and
o Other commercial laws
• Lawsuits and other requests related to appointment of a judicial receiver, trustee, liquidator, or expert; and
• Claims for damages arising from a lawsuit previously heard by the Commercial Courts.
For international disputes, the general rules of international jurisdiction under the CCL should apply. Generally, the Commercial Courts of Saudi Arabia will have jurisdiction in an international dispute if:
• The defendant in the matter is a Saudi Arabian citizen or company; or
• The dispute involves assets located in Saudi Arabia or a contractual obligation with fulfillment in Saudi Arabia

There are exceptions to this international jurisdiction, including if the parties contracted for disputes to be resolved through arbitration or in the courts of another jurisdiction. The ability to contractually agree to a jurisdiction outside of Saudi Arabia also allows parties to avoid the application of Saudi rules or other more stringent Saudi Arabian laws. However, there is no confirmed view whether two Saudi parties can agree to refer their dispute to a non-Saudi jurisdiction.

If there is a challenge to the jurisdiction of the Commercial Courts, it must be made at the first hearing and it should decide by the court within 20 days of the challenge. This change discourages frivolous jurisdiction challenges and reduces the ability of parties to delay proceedings indefinitely by challenging jurisdiction.

Expanded Private Sector Involvement

The CCL specifically authorized the Commercial Courts to use the services of private sector businesses to assist with the following court functions:
• Alternative dispute resolution (ADR), including mediation;
• Notification and service of claims and judgments;
• Registration of case filings;
• Management of court rooms and other court departments;
• Facilitating exchange of documents; and
• Providing expert opinions for the dispute
Private sector companies are more efficient at these administrative tasks. This change will result in increased efficiency for the Commercial Courts, expediting the administration of claims handled by the courts. Allowing outside expert opinions will also ensure quality expert advice is presented to the courts for complicated claims.

Alternative Dispute Resolution

In addition to allowing private sector involvement for ADR, the CCL places increased emphasis on using alternate methods for resolving any disputes. In addition to encouraging ADR, the law will make ADR mandatory in certain types of cases. The category of cases that will be subject to mandatory ADR have yet to be defined. The goal of increased ADR efforts is to avoid lengthy and expensive litigation for every commercial matter.

Notice, Filing, and Statute of Limitations

The CCL introduces a number of changes meant to streamline claims and ensure only claims with merit are brought before the court.

• Serving Notice: Additional addresses are authorized for service of notice, including electronic addresses used by the parties in court submissions and residential addresses unless another address is chosen. For foreigners, service can be made at any address used by the person in Saudi Arabia. Parties can also authorize their lawyers to accept service on their behalf.
• Filing: For certain cases, the claimant will be required to make a letter of demand for final payment or performance from the other party 15 days prior to filing the case. Additionally, certain cases can only be filed by licensed lawyers. These provisions encourage resolution of matters outside of court.
• Statute of Limitations: Claims that occurred more than five years after the date the entitlement rose are barred unless the defendant authorizes the claim or the claimant provides an excuse for the delay that is accepted by the court.

Introduction of Additional Flexibilities

In addition to the clarifications and efforts to streamline processes introduced by the CCL, it also gives the parties and courts additional flexibility in certain matters, including evidence rules and granting relief.
• Evidence Rules: The parties are authorized to agree either in their contracts or prior to litigation on specific evidence principles, including following evidence laws of another jurisdiction or international bodies as long as they do not contradict the general evidence rules in Saudi Arabia. The general rules of evidence have also been modified to allow for (a) acceptance of document copies when originals are not available; (b) submission of document requests to the other party (right of discovery); and (c) cross-examination of witnesses.
• Granting Relief: The CCL introduced a new procedure that provides additional flexibility in granting relief called a Performance Order. This Order allows the Commercial Court to issue a summary judgment without pursuing a full case hearing. Performance Orders are authorized in cases that involve a written contact with a quantifiable entitlement that is due immediately.

The CCL makes great strides in clarifying the role of the Commercial Courts and unifying their jurisdiction across Saudi Arabia. If you have a commercial conflict in Saudi Arabia, contact the attorneys at Hammad & Al-Mehdar Law Firm today.

Over the last half-decade, Saudi Arabia has proven to be a lucrative investment destination for international investors. This is credited to the government’s decision to open up four burgeoning industries (real estate, recruitment, and employment services, audiovisual and media services, as well as land transport services) to foreign direct investments (FDI).

According to data from a report by the Saudi Arabian General Investment Authority,

new foreign investor licenses rose by 85% in the first half of 2019, demonstrating how the nation has opened up to FDI. These investments have come from investors from many nations, such as the USA, France, China, India, Egypt, and many others.

The investment opportunities in Saudi Arabia are many and are undoubtedly lucrative. However, it is crucial, primarily when investing in foreign nations, to familiarize yourself with relevant laws, regulations, and compliance requirements. This will safeguard your investment from unnecessary risk.

One of the critical areas to understand before applying for contracts in Saudi Arabia is their laws

What Are Liquidated Damages?

Contracts are an integral aspect of business transactions. They highlight the parties transacting, services to be rendered, and payment details. Such details bring transparency in business and help avoid or resolve issues that may arise as well as protect the rights of both parties.

Even still, complications may arise, and some disputes may occur as one party may fail to honor their obligations. When this happens, it can cause inconveniences and even financial loss for the other party’s business, which warrants compensation. This is why contracts have a liquidation damages clause that offers protection in case there is a breach of contract.

Usually, compensation clauses highlight specific types of breach and the damages that can be recovered for that breach. They are especially useful when ascertaining the value of damages is difficult. Liquidated damages clauses are standard in construction contracts for when work is not completed on time.

Liquidated Damages in Saudi Arabia

With exception to government contracts which are under the Government Tenders and Procurement law, contract disputes are resolved using Sharia (classic law) as Saudi Arabia does not have any other form of contract law. Nonetheless, Saudi courts recognize the right for compensation and delay penalty clauses concerning liquidation damages as per Sharia (classic law).

Sharia rules requires that each party should honor their contract ( O ye who believe fulfill your contracts “ obligations”) [1] , and courts will honor the contract in case of claim for compensation  based on a liquidated damages clause within the contract.

However, Saudi courts when reviewing the compensation claim, will apply the tripartite theory, of the fault, harm, and casual relation when determining such matters. If the claimant could not prove the fault or wrong from the respondent or the actual harm, then the court will not automatically grant him the compensation under the liquidated damages clause.

The Issue of Fairness and Contractual Certainty 

Under Sharia rules, the matter of fair compensation is taken with great seriousness, the court will make sure that the value of compensation listed in a liquidated damages clause is fair and accurate. Even if the other party has breached the contract, you do not have any justification for requesting exorbitant compensation.

If compensation claims are not in line with the actual value of the damages incurred, the court is likely to adjust the compensation amount under the liquidation damages clause to meet actual and direct damages.  Saudi courts only recognize actual and direct damages when considering, as such, loss of future income or other consequential damages and indirect damages that may result from the breach of contract do not qualify for compensation.

As per Sharia rules each party in a contract must have perfect knowledge of the terms indicated therein regarding the transaction and obligations for the same. The terms should be clearly stipulated within the contract. Therefore, for a contract to be enforceable, it must have clear agreements and clauses that do not leave anything to doubt. Anything that leaves room for speculation brings contradiction, or uncertainty will make the contract unenforceable in a Saudi Arabian court.

A contractor can have the right to negotiate a liquidated damages clause to protect himself from any delay of payments by the employer.  However, when drafting such clause, one must pay attention to a major rule under Sharia, which is  “riba”, and translates to interest because it is highly condemned. So, Saudi courts will not enforce any liquidated damages clause that contains any indications of payments or receipt of interest such as late payment commission or service charge.

Government Contracts

For organizations servicing contracts for the Saudi Arabia government, the Government Tenders and Procurement Law is supreme and rules of liquidated damages will be applied as per the contract and the law. Of importance are articles 48 and 84.

Article 48 of the Procurement Law 2006

Article 48 states that recipients of services (Government entity) are entitled to fair compensation if the contractor does not fulfill their contractual obligations within the stipulated period.

The article highlights that penalties for supply contract delays should not exceed 6%, of the value of the contract and penalty for any other contract should not be higher than 10%.

Article 84 of the Procurement Law

Article 84 is somewhat a buildup of article 48. In this article, services that are not completed on time are subject to a penalty, which will be based on the average daily cost of the project. However, in line with article 48, the maximum penalty is set at 10% of the contract.

Are Liquidation Clauses Worth It?

In general, contracts are used to ensure that the terms of a transaction are clear and can be verified if need be to avoid unnecessary conflicts. However, due to laxity or other unforeseen circumstances, one party may be unable to fulfill their contractual requirements.

In that case, compensation to the other party for delay in performance or damages is only fair. The determination of fair compensation after a breach of contract can be challenging. Liquidation clauses eliminate such complications as the appropriate compensation for foreseeable breaches is included in the contract, provided such clause is fair and for direct and actual damages.

Ensuring Your Liquidation Damages Clause is Enforceable

Any minor infringement of Sharia contract rules or lack of clarity of terms can render a liquidation damages clause unenforceable in Saudi Arabian courts. In order to avoid such risks, it is crucial to work with a lawyer well versed in the same to ensure that contract terms are in line with Sharia guidelines.

Hammad and Al-Mehdar is a leading law firm in Saudi Arabia that offers international-standard corporate legal services. Want to expand your investment portfolio into Saudi Arabia? Reach out to us for all your corporate legal needs.

The Singapore Convention (United Nations Convention on International Settlement Agreements Resulting from Mediation) is a recent United Nations Treaty intended to promote international economic integration. The Treaty provides a regulatory framework for the right to invoke and enforce settlement agreements among parties of states that ratify the agreement. The Convention enhances international trade by promoting mediation as an alternate and faster method of resolving trade disputes.

The Treaty was adopted on December 2018 and opened for signature on by August 7, 2019. Forty-six countries, including the Kingdom of Saudi Arabia, signed the Treaty becoming the first UN treaty to receive the highest number of signatories upon its commission. Singapore’s Prime Minister, Lee Hsien Loong, officiated the ceremony hailing the document as a powerful affirmation of multilateralism that establishes a mechanism for the enforcement of cross border meditated settlement agreements.

The Kingdom of Saudi Arabia was represented by Bader Al-Haddab from the Ministry of Commerce and Investment Undersecretary for Policies and Regulations who signed the Convention on behalf of the Kingdom, on August 7, 2019.

Summary of the Provisions of the Singapore Convention

Article 1: Provides for the scope of application of the Convention stating that it shall apply to international settlement agreements resulting from mediation concluded in writing by parties seeking to resolve a commercial dispute. It also provides the exemptions for its application such as in agreements concluded to resolve disputes arising from trade by a consumer for household purposes, inheritance, or employment laws. Agreements concluded through the court process are also exempted from the scope of the Treaty.

Article 2: Provides essential definitions of terms used in the Convention. This helps in providing clarity in and comprehensive understanding of the terms in situations where a party has multiple or no places of business.

Article 3: Addresses the key obligations of the Parties to the Convention with respect to enforcement and allowing a disputing party to appeal a settlement agreement. The article mandates disputing parties from member states to recognize a settlement agreement as proof that a dispute raised has been resolved.

Article 4: Lists the requirements for reliance on the settlement agreement. This includes the submission of a signed agreement and evidence that the agreement resulted from meditation. Since member countries have different forms of communication, this article acknowledges electronic communication and translations of agreements where the agreement is not written in the official language of the Party.

Article 5: Provides ground for action when a competent party refuses to grant enforcement.

Article 6: Provides for parallel application where an arbitral tribunal, court, or competent Party may adjourn its decision following the grant of the relief sought under the Convention.

Article 7: Where a settlement agreement is to be relied upon, this section allows flexibility to an interested party to avail themselves in the manner and to the extent allowed by the law.

Article 8: Outline the two reservations of the Convention. The first reservation allows a party to exclude the scope of the Convention to which government agencies are a party and the second allows for a declaration to be made to the extent that the parties have agreed.

Article 10: Appoints the Secretary-General of the United Nations as the depository of the Convention

Article 11: Governs the signature, ratification, acceptance, approval, and accession to the Convention by members

Article 12: Permits regional integration of organizations comprising of sovereign states and with competence over matters governed by the Convention to sign, ratify, approve, and accede to the Convention. This provides the organizations with rights and obligations of being a part of the Convention.

Article 13: Governs the application of the Convention to parties that do not have an existing unified legal system

Articles 14, 15, and 16: Govern the entry into force amendments, and any denunciations made under the Convention

What does the Singapore Treaty Mean for Saudi Arabia?

Being part of the Arabian Peninsula, the legal system in Saudi Arabia is founded on the provisions of the Islamic Sharia law. However, the need for international economic integration liberalized the Saudi legal system through the adoption of arbitration as a conflict resolution mechanism. The New York Convention and Saudi’s Arbitration Law of 2012 introduced the Kingdom to a new era of dispute resolution. The Kingdom, which signed the Singapore Convention in 2019, adds to its international treaties of promoting regional integration creating the following benefits.

• Signing the Singapore convention is a great milestone to the Kingdom of Saudi Arabia, which has relied on meditation as a means of dispute resolution. The Treaty provides the Kingdom with an internationally recognized dispute resolution mechanism that will boost its cross border trade and investment.
• Since the Kingdom of Saudi Arabia has been its doors to foreign direct investment through liberalization of its trade policies, the Singapore Convention will provide a regulatory foundation to support the rise of mediation into the main international dispute resolution arena alongside arbitration.
• Saudi Arabia signed the Treaty in support of the growth of the institutional arbitration and mediation industry from the highest levels of decision-makers in the Kingdom, in pursuit of raising the Kingdom’s legislative and legal environment to a level consistent with the latest international standards applicable in this field.
• The affirmative action to sign the Treaty was based on the 2030 objectives, which prioritize strengthening the Kingdom’s investment standing by implementing international legal and commercial standards with the aim of creating a favorable environment for long-term domestic and foreign investment.
• Lastly, since the Treaty is an international binding instrument, it will bring added advantage bound to build assurance and stability to the Kingdom’s economy, contributing to Sustainable Development Goals.

The Future of Dispute Resolution in Saudi Arabia

International dispute resolution mechanisms through arbitration and mediation are being adopted globally as a way of promoting cross border integration. The basic idea behind the endorsement of the Treaty was to have the modern legal system provide a range of dispute resolution options for disputing parties to pick the mode of justice that is most suited to their needs, subject matter, and desired outcomes. The Singapore Convention hopes to provide an international law that provides parties with the desired dispute resolution options. After signing the Treaty, the next process will be ratifications process. According to Article 14 of the Singapore Convention, the Treaty will only be enforceable six months after three countries ratify it.

To get more information on the impact of the Singapore Convention on Saudi Arabia’s economy, contact us or call us on 966 (0) 920004626.

Although it was classified as the third litigation instance by the new formation of KSA judicature, which was promulgated by Resolution No 303 of the Council of Ministers, dated 19/09/1428 AH, the Supreme Court started to admit the objections for cassation to the judgments issued by the courts of appeal except for 15/02/1440 AH. The court will not consider any objection to the judgments delivered prior to 28/03/1440 AH.

The jurisdiction of the Supreme Court is confined to:

• Reviewing the judgments of death, cutting, stoning, soul retaliation or otherwise, which are given or supported by the Appellate Courts; and
• Reviewing the judgments given or supported by the court of appeal on cases other than those in the previous paragraph or on final matters without addressing the facts, where the subject matter of the objection to the judgments is:

1. A violation of the provisions of the Islamic Sharia and the acts promulgated by the Ruler in compliance therewith;
2. A judgment delivered by a judicial panel not properly formed in accordance with the provisions of this Act and others;
3. A judgment rendered by an incompetent court or circuit; and
4. An incorrect characterization or description of the incident.

It means that the Supreme Court will not consider the subject matter of the dispute or any new evidence or proofs provided by the objector. The Department of Objection Examination in the Supreme Court receives and examines the applications for an objection for cassation in terms of the form and prescribed period. Then, it refers them along with its opinion to the competent circuit to decide admitting or dismissing the application as held thereby.