Dispute Resolution

1-litigation

The litigation process differs according to the type of dispute and the applicable body hearing the proceedings. This might include the general Shari’ah courts, the BOG and the quasi judicial committees.

It is important that proceeding is initiated in the correct forum, not only to minimize delay in obtaining a decision but also to minimize costs as no interest on the claimed amount will be awarded, nor are legal costs awarded.

The litigation process starts with filing the case with the designated court. Once filed, the relevant court will assign a date and the claimant is asked to notify the defendant directly, or through a police officer, or the court clerk.

The hearing date will depend on the particular court, the location of that court, the importance of the case and the judge’s schedule. If the proceedings are in a general court and that court is in a major KSA city, the hearing should start between one and 6 months after the filing date.

There is a current backlog of cases which means that commercial disputes may take from 6 months to 3 years from commencement to enforcement depending on their complexity.

Hearing dates for similar proceedings before the BOG and quasi judicial committees are likely to be sooner, and the proceedings generally take a shorter period to conclude, with the quasi judicial committees being the most efficient and expedient.

2-Arbitration:

Arbitration in Saudi Arabia is governed by the Arbitration Regulation issued on 25/5/1983  within amendments been added by royal decree No 34 in 2012 and ministerial decision No 156 in 2013 and its rules of implementations. The law governs agreements to arbitrate, the appointment of arbitrators, the conduct of proceedings, judicial supervision and enforcement. Arbitral awards have the same effect, and can be enforced in the same way, as court judgments.

As the law requires the “authority originally competent to hear the dispute” (the “Authority”) to supervise the arbitration, the arbitration process is more akin to litigation than in other jurisdictions. The Authority in respect of most commercial disputes is the Board of Grievances.

Key Provisions of the law and the application of Shari’ah include:

  • A requirement that the arbitrators be male, Muslims.
  • The proceedings be conducted in Arabic.
  • That the arbitrators apply Saudi Arabian law regardless of the choice of the parties as to governing law(this is also the case in the courts which do not recognize a conflict of laws doctrine).
  • The government and government authorities cannot participate in arbitration.