The Enforcement of Foreign Arbitral Awards in Saudi Arabia - Dissertation Example

Its adherence to the Shari'a law and its impact on commercial arbitration and foreign arbitration enforcement are also explored in depth. To this end, the research perused several conventions such as UNCITRAL’s Model Law, the New York Convention, the Washington Convention, and the Riyadh Convention. This study concluded that the modern arbitration mechanism in Saudi Arabia typifies the classic hybrid theory of control and regulation. It has to loosen regulation, which is primarily driven by the restrictive Shari’a Law on one hand while on the other, it has to impose certain regulatory controls in order to protect the public interest and reconcile international arbitration conventions with the Shari’a law. In addition, the legal framework for arbitration remains insufficient. The implications of this fact in the enforcement of foreign arbitral awards are significant. The absence of clear and specific laws on commercial arbitration and the enforcement of foreign arbitral awards create several challenges, particularly in terms of fair and credible examination of applications for awards enforcement and in providing a speedy arbitration resolution.  

International arbitration is an excellent mechanism to settle disputes. It is, in fact, an alternative to a formal judiciary because of its legal characteristics. Decisions from arbitration tribunals are binding and lawfully enforceable in most states because they assume the mantle of a legitimate contract. Today arbitration has been made even more important by the drastic integration of the international community driven by various globalizing forces such as the United Nations (UN) and the World Trade Organization (WTO) as well as the emergence of regional and economic blocks such as the European Union and the Organization of Petroleum Exporting Countries (OPEC). The emergence of these forces led to closer interactions and stronger relationships among states and peoples. While this development has been largely positive and beneficial, it has also produced a constant stream of conflicts—conflicts between states, between states and private entities, states and individuals, and so on. The international system today has to govern not just states but also non-state entities that have acquired multinational characters and legal personalities. Thus, it was a good thing that international arbitration was institutionalized. Many countries are signatories to several arbitration conventions. For instance, in 2009, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, most commonly known as the New York Convention, had 142 of the 192 members of the UN as signatories. The WTO also mandates all courts of the ratifying states to enforce and recognize private agreements that cover those agreements regarding arbitration.

The high degree of adherence is not without due cause. An examination of records of cases reveals that international arbitration is less complex, less expensive, more efficient, and, hence, welcome for many countries.