Overview

Arbitration in Saudi Arabia has invariably been according to Islamic Sharia Law. However, the process was found to be ​​lengthy and rigid to a great degree. This was by reason of having to bring all applications before a Board of Grievances.

The new enforcement law now provides an easier means of litigating and arbitrating cases. This includes codifying the Sharia law, and also allows for both domestic and international businesses to seek legal recourse in Saudi courts.

Framework of The New Enforcement Law in Saudi Arabia

In its decision, the Saudi courts highlight that Sharia law now allows entities to resolve disputes out of court and agree on a settlement. However, should one party not be able to reach an agreement, they will need to pursue legal recourse by enforcement of judgment. Furthermore, parties may execute other legal rights by applying to a Saudi court to get an execution order.

When in court, the applicant must produce supportive documents (written evidence) stating they have attempted to voluntarily settle the matter with the other party. Depending on the nature of the claim, the judge will decide on a course of action in line with The New Enforcement Law.

Scope of Disputes Under The New Enforcement Law

Under Articles 7 and 9, the Judge is authorized to enforce a judgment on a wide range of disputes, regardless of value and as per provisions that govern summary proceedings. In addition, the enforcement judge is entitled to

• seek assistance from the police or other law enforcement entities

• impose or lift travel bans

• freeze bank accounts

• order imprisonment or release

• issue decrees on asset disclosures

• notify licensed credit agencies

• evaluate insolvency claims

It is important to note, that under Article 2 of the New Enforcement Law, the judge must respect and follow Sharia law unless the Law states otherwise.

Once a judgment has been executed, the debtor must act in accordance with the judgment within 5 days. Should the debtor fail to comply within the said time, they can face penalties, as mentioned under Article 46

Applications Under The New Saudi Enforcement Law

In order to get an execution order from the Saudi court, the application must adhere to Article 34 which outlines execution regulations. Below are the main conditions and procedures the application depends on

The application must be in the matter of an execution document as stated in Article 9:

• Orders, decisions, and judgments made by Saudi courts

• Awards made by arbitrators and approved for execution in accordance with Saudi Arbitration Law

• Reconciliation minutes issued by departments or authorized by Saudi courts

• Commercial documentation including promissory notes, bills of exchange, and checks

• Other verified documents issued by the debtor as a constitution and declaration of the debtor’s validity. (If an objection is raised, the debtor requires to provide their signature on a document stating why they object.)

• The execution document should be in line with Sharia law, comply with the requirements stated in Execution Regulations, Article 9, and should specify the amount due to the claimant.

• If the debtor objects to any commercial paper they must provide the court with a written objection document jointly with the commercial paper.

• When the applicant presents their case to the Execution Court, they require to submit an original copy of any power of attorney.

• The execution judge must be within the jurisdiction that the claimant applies to and should be qualified to handle the application.

• In case of an appeal, a judgment stays unless the decision is by summary execution.

Note: If you are a claimant that is looking to recover payments that were guaranteed to you via check or other commercial documents, we recommend settling the matter via an execution court as the process is faster than via a commercial court.

In view of the above, it is clear that The New Enforcement Law in Saudi Arabia provides entities with an efficient and agile way to enforce arbitration awards. This is an important step that fits well into the 2030 vision to boost international foreign trade.

To know more about the New Enforcement law or how we can assist you with arbitration matters in Saudi Arabia, contact us here.