Sharia-driven policy constraints to enforcement of arbitration awards in the kingdom of Saudi Arabia

Abstract

International arbitration is posited on the intention that its awards will be recognised, binding, and enforceable between different stakeholders. However, recognition and enforcement may vary in different jurisdictions. Courts may have to decide upon competing parties’ rights when enforcing an award. This thesis investigates the key challenges and barriers in recognition and enforcement of arbitral awards in the Kingdom of Saudi Arabia (KSA), where applicable law is grounded in Sharia (traditional Islamic jurisprudence and local customs) and compatible international laws and conventions. Although current Saudi legislation is considered to meet international regulatory systems and standards, there are still many reservations about it from international legislators and legal communities. Arbitration awards should be registered in the KSA and validated by the Kingdom’s courts, because current enforcement and recognition of foreign arbitral awards is subject to Islamic law, which can be problematic for the recognition and enforcement of foreign arbitration awards. This is related to Sharia implications of international arbitration conditions, and a lack of familiarity and knowledge of foreign arbitration among the Kingdom’s judiciary, along with the general incoherence between domestic and foreign arbitration mechanisms. The findings of the analysis undertaken in this thesis support five key recommendations to overcome these challenges: (1) establishment of a quasi-judicial committee; (2) defining arbitration for domestic and foreign arbitral awards; (3) providing and clarifying conditions for enforcement; (4) limiting the judges’ capacity to refusal of arbitral awards; and (5) clarifying the grounds for public policy and limiting automatic incorporation of sharia law. The implications of this research, its limitations, and directions for future studies are also outlined.