Changes to the Saudi Arbitration Law

Changes to the Saudi Arbitration Law

Arbitration News / 13 August 2012
Notice of Arbitration Case
According to the New Saudi Arbitration Law

The notice of an arbitration case is considered one of the most important measures to commence the proceeding by making the other party well aware of the case and that the arbitration panel has the right to review the case in preparation for the rendering of a definitive judgment.

Due to the importance of this subject, Article 6 of the new arbitration law, issued by the Royal Decree No. M/34 dated 24/05/1433 AH, corresponding to 16/04/2012 AD,raises the role of the arbitrators in determining the notice procedures, based on what the parties have previously agreed to or as specified in the new law.

When the parties have not agreed upon the "notice" procedures, the new arbitration law stipulates in the first paragraph of Article 6 that if there is no special agreement between the parties of the arbitration concerning the notices, the notice shall be delivered to the recipient in person or to his representative, or sent to his mailing address specified in the contract covered by the dispute, specified in the arbitration condition or in the document governing the relationship covered by the arbitration.

Unlike the old arbitration law, it should be noted that Article 6 of the new arbitration law does not specify the party assigned to send the notice of arbitration case. Under Article 8 of the old arbitration law, the clerk of the competent authority, who was appointed secretary of the arbitration panel, was assigned to send all notices and declarations to the parties. Since the new arbitration law does not contain language regulating this matter, it will be necessary to state the same in the executive by-law of the new arbitration law following its preparation, given the new law's significance in invoking the local and international arbitration being conducted through the competent authorities specified in the old law, namely the Saudi Chambers of Commerce and Industry, or through the arbitration centers set forth in the new law.

The second paragraph of Article 6 further specifies that if it is impossible to send the notice to the recipient as per paragraph (a), the delivery shall be considered fulfilled if done by a registered letter to the last known place of business or usual residence or to the mailing address known to the recipient. This procedure relates to arbitration case proceedings that are considered before the arbitration panel. As for notices regarding the invalidity of the arbitration judgment considered by the courts, they are subject to the third paragraph of Article 6 of the new arbitration law which states that the provisions of Article 6 are not to be applied on court notices regarding the invalidity of the arbitration judgment before the courts.

Thus, since the new arbitration system does not specify the data that should be contained in the notice sent to the recipient, the executive by-law of the new arbitration law must do so. Determination of such data may be guided by the Law of Procedure before Shari'ah Courts, Articles 14 to 23, or Article 12 of the executive by-law of the old arbitration law. One can hope that such data will be the same as set forth in the Law of Procedure before Shari'ah Courts.

The executive by-law of the new arbitration law should specify the data that must be contained in the notice of the arbitration case, namely the day, month, year and time of the notice; name, capacity, profession and address of the notifying party, along with the name of his attorney or representative; name, surname and profession of the recipient to be notified, as well as the signature and personal data of the recipient. The name of the notifying party or the name, capacity and signature of the person entrusted with the notice should be stated along with his signature on the original and all copies. The name and headquarters of the arbitration tribunal, as well as the subject of the procedure or notice to be communicated, should also be stated. Such data is essential in order to have binding legal affect upon the parties to the arbitration proceeding.

The notifying party must hand the notice to the notified party in person at his domicile or the domicile specified in the arbitration document or relevant contract before the arbitration panel. If the party being notified is absent or trying to evade receiving notification, the notice shall be handed to his legal representative, the person in charge of his business management, or whoever is related to him as set forth in the Law of Procedure before Sharia'ah Courts.

Based on the above, these procedures are related to the notice given to natural persons. For notice to persons outside Saudi Arabia, the law contains conditions that are somewhat different, but the new arbitration law does not specify these procedures, so hopefully they will be included in the executive by-law to be issued soon.

Dr. Khalid Alnowaiser FCIArb, Saudi Attorney and Chairman of the ICC Saudi Arbitration Committee. You may write him at KHALID@LFKAN.COM