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Arbitration as an Alternative Means for Ordinary Courts in Settling Disputes

Arbitration now occupies a wide range of attention in the present day in terms of performance and development; as it is considered an alternative means for the judiciary in the settlement of disputes; especially with regard to the commercial and international disputes, which made Saudi Arabia give it this attention lately in line with the new economic measures pursued by the Kingdom; as it issued the new Arbitration System issued by Royal Decree No. (M/34) on 24/5/1433 AH; and that is for the purposes of finding alternative solutions to reduce the burden on the ordinary courts. Therefore, I will give a brief overview for the comparisons between the arbitration and ordinary courts.

When comparing arbitration and the courts, we should refer to the several points characterizing arbitration, which made it one of the most important alternative means for settling disputes, namely:
  • Speed in the Dispute’s Settlement: – For example, the commercial transactions are based on two basic principles, which are trust and speed; as they are features characterizing this era. The ordinary courts may prolong the period of the dispute; not as an inherent attribute in these courts, but due to the nature of the judicial proceedings; furthermore, the limited number of judges before the continued increase in the number of cases has led to the accumulation of cases before the courts for many years.
  • End of Dispute without Litigation and Altercation between the Litigants: – Since they voluntarily chose and agreed on the arbitrators, this mutual agreement is a good basis for the implementation, and to erase the effects of the litigation. The atmosphere of arbitration proceedings and the location for reviewing the arbitral proceedings removes any sense of litigation.
  • Specialization: – Sometimes when the judge reviews the case he might need to assign an expert to obtain his professional opinion on the case, while we find that the arbitrator is often an expert in the subject of the dispute; for example, if a dispute is submitted for one of the construction contracts, the litigants may choose an engineer to settle the litigation, whereas they do not have that option before the State courts; since the dispute presented before the judge is beyond the scope of his specialization or practical experience, so it takes time for him to understand it; thus consuming more time to review it, unlike the arbitrator; as the main reason for choosing him is based on his specialization in the subject of the dispute.
  • Confidentiality: – The basic principle in its proceedings and hearings is confidentiality, whether in terms of the disputed right or the mutual defenses between the disputing parties. Arbitration is a successful method to resolve the commercial disputes, which are characterized by their sensitivity; as the traders are generally keen on not informing the third parties about their financial positions, the nature of transactions they make, and the people they deal with; so the arbitration limits the attendance as narrowly as possible, and the arbitral hearings are not public, and so the parties alone receive the sentences of the arbitral decisions. It is not permissible for any person other than the parties to attend without the permission of the litigants in writing and it will be recorded in the minutes.
  • Conclusiveness of the Arbitral Decision: – The arbitral decisions are not subject to the appeal methods known by the rulings issued from the courts, and they have many chances to become conclusive.
  • Flexibility: – The arbitration can be conducted in any country and in any language under the leadership of the arbitrators of any nationality, and the Arbitral Tribunal will be flexible in the arbitration proceedings; as it will not comply with the literal proceedings of the Procedural Law, while fully complying with the main principle, which is the provision of adequate, fair and equal chance to the parties to present their claim or defense. The arbitration hearings can be determined at any time and on any date, even on Fridays and public holidays.
  • Adoption of the arbitration method attracts investments that do not wish to be subject to foreign laws; as arbitration allows multinational companies to choose the applicable law in the event of any dispute; thus considering arbitration as a way out for the issue of conflict of laws.
  • Keeping the Friendly Relations between the Litigants: – In arbitration, the parties mutually and willingly consent in advance to the ruling reached by the Arbitral Tribunal, since they were the ones who chose the arbitration members, which helps in sustaining the relations between them. Confidentiality is one of the most important benefits of the Arbitration System, unlike the publicity of the ordinary court; such confidentiality helps in the continuation of the relationship between the two parties.

Rulings of the Foreign Arbitrators and their provision with the Force of Res Judicata

Arbitrators have the force of res judicata, and it will be enforceable after being appended to the implementation order as indicated in Article (9), paragraph (2) of the Implementation System, which states that if the ruling of the foreign arbitration was included in any violation of the provisions of the Islamic Sharia or Public Order in the Kingdom, the violating section will not be implemented as stated in Article (9), paragraph (1) of the Implementation System. Furthermore, the ruling of the foreign arbitrators must not conflict with any ruling or order made in the same object from the competent judicial authority in the Kingdom.
In regard to the body entrusted with the implementation of the arbitrators’ rulings, it is worth mentioning that the arbitration has witnessed an amendment to the competence of the implementation of the foreign arbitrators’ rulings, and that was with the issuance of the Saudi Implementation System through the Royal Decree No.(53) on 13/8/1433 AH; as the Article (96) thereof abolished the competence of the Board of Grievance in implementing the rulings of the foreign arbitrators after maintaining the competence of its implementation for a long time as stipulated in paragraph (G) of Article (13) of the Board of Grievances System. Therefore, the arbitration implementation body has been unified in regard to the national and foreign arbitration ruling; and its competence became the responsibility of the implementation departments at the public courts as stipulated in Article (8).
Finally, the Legislator’s interest was evident in determining a judge specialized in enforcing the foreign rulings, and that was in Article (14) of the Implementation System, which stipulates that the judicial rulings and orders, the arbitrators’ rulings and the documented releases issued from a foreign country must be submitted to the implementation judge specialized in implementing the foreign rulings; in order to verify that the document has met the implementation conditions and to place the implementation seal on it.

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