Best Arbitration Law Firms in Saudi Arabia

Arbitration has become a crucial factor in attracting investments and capital, particularly in developing countries that heavily rely on these investments. Arbitration offers several advantages that parties seek to benefit from, aiming to avoid future disputes and reduce reliance on the judicial system. This is because litigation procedures entail prolonging the duration of a dispute, which can extend for prolonged periods due to various reasons.
Generally speaking, arbitration has become an effective tool for enhancing confidence in the investment environment and encouraging foreign investments in developing countries. This is due to its flexibility and promptness in resolving disputes while maintaining good relationships between the conflicting parties.
The concept of arbitration, as defined in Article 1 of the Saudi Arbitration Law No. issued by the royal decree no. 34 in 24\5\1433 H, refers to an agreement between two or more parties to refer all or some specified disputes arising or that may arise between them regarding a particular contractual or non-contractual relationship to arbitration. This agreement can be in the form of an arbitration clause included in a contract or an independent arbitration agreement.
From this definition, it becomes obvious that arbitration is a specialized form of alternative dispute resolution (ADR) that aims to settle disputes and reach an award without resorting to courts and removing jurisdiction from the ordinary judicial system by appointing a sole arbitrator or an arbitral tribunal, as agreed upon by the parties involved.

Advantages of Arbitration
1. Speed: Arbitration is known for its promptness compared to traditional litigation. In the regular judicial system, the accumulation of cases and backlog in courts can prolong the duration of a dispute. Certain disputes require timely resolutions, and delays are often unacceptable. Arbitration provides a mechanism for swift dispute resolution.
2. Freedom: Arbitration offers the freedom to choose the applicable law for resolving the dispute. The arbitration process is not restricted by the formalities and procedural rules of the state's judicial system, as long as basic guarantees of due process are maintained.
3. Confidentiality: Arbitration proceedings are characterized by their confidentiality. Only the appointed arbitrators and the parties' lawyers have access to the dispute, unlike regular litigation, which typically takes place in open court.

Forms of Arbitration Agreement:
The Saudi Arbitration Law recognizes various forms of arbitration agreements, including:
1. Arbitration Clause: This refers to an agreement between the contracting parties to refer any future disputes arising between them to arbitration. Article 9 of the Saudi Arbitration Law states that "an arbitration agreement may be concluded before the dispute arises, whether it is an independent agreement or included in a specific contract." A valid arbitration clause is independent of other contractual terms and does not render the entire contract void if the arbitration clause is valid itself, as specified in Article 21 of the same law.
It is worth mentioning that there is no specific formula for an arbitration clause, although some arbitration centers provide model clauses. For example, the Saudi Center for Commercial Arbitration includes the following provision in its arbitration rules: "Any dispute, controversy, claim, breach, termination, or invalidity arising out of or relating to this agreement shall be settled by arbitration under the Saudi Center for Commercial Arbitration rules."

2. Arbitration Submission Agreement: This refers to a separate arbitration agreement signed by the parties in the event of a dispute concerning the underlying contract. The agreement shall be in writing and signed by the parties or their authorized representatives. A separate arbitration agreement is concluded after the dispute arises.
The arbitration agreement should specify the subject matter of the contract, the type of dispute, the parties involved, their addresses, the procedure for appointing the arbitral tribunal, the number of arbitrators, the place of arbitration, the language of arbitration, the applicable law for the arbitration proceedings, and the law governing the entire dispute. It should be noted that if the arbitration agreement does not specify the subject matter of the dispute, it would be invalid and have no effect.

The impact of arbitration agreements can be divided into two important effects: positive and negative.
The positive effect of an arbitration agreement lies in obligating the disputing parties to resort to arbitration in case of a dispute between them. This effect is binding on the parties involved, but it can also extend to the general and private successors. It should be noted that if a dispute is brought before the regular judicial system despite the existence of an arbitration agreement, whether it is a condition or a submission agreement, the argument shall be made in the first session in the presence of the arbitration condition before any requests or arguments. As a result, the court should refrain from considering the claim. Article 11 of the Saudi Arbitration Law states:
"The court to which a dispute is submitted, in relation to which an arbitration agreement exists, must rule on the inadmissibility of the claim if the defendant makes such argument before any request or defense in the claim."
The negative effect of an arbitration agreement is the refusal of the disputing parties to resort to the regular judicial system. Article 7 of the UNICITRAL Model Law on International Commercial Arbitration also states:
"The court before which an action is brought in respect of a matter which is the subject of an arbitration agreement shall refer the parties to arbitration, upon the request of one of the parties, no later than the date of submission of its first statement on the substance of the dispute, unless it finds that the agreement is null, void, or incapable of being performed."

This means that if one of the disputing parties’ resorts to the regular judicial system, the court shall rule on the inadmissibility of the claim, as we beforementioned, based on the requirement of the defendant's adherence before making any requests or defenses in the claim.

So, if you are looking for a highly experienced law firm in the field of arbitration, ALF Law Firm is the best choice to assist and support you in all these matters. Its legal advisors have extensive knowledge of all the regulations and laws related to arbitration.