The Saudi Center for Commercial Arbitration (the “SCCA”) has confirmed that Saudi law protects the freedom of parties to choose any representative they wish to represent them before arbitral tribunals in the Kingdom, and that using a foreign lawyer was not a ground for annulling an arbitral award.
A comprehensive review of Saudi legislation was carried out by the SCCA with the Ministry of Justice (“MoJ”), with particular attention paid to the Saudi arbitration and enforcement laws.
The SCCA said the legislative and judicial authorities’ shared the same stance of protecting parties’ freedom to choose their legal representative in arbitration, which was aligned with international best practice in the industry and supported the country’s efforts to develop a culture of arbitration, not least as part of the Vision 2030 national economic development strategy.
What does this mean for parties in dispute in Saudi Arabia?
The SCCA/MoJ announcement provides clarity and certainty to foreign parties in particular, who may wish to use their own counsel from outside the Kingdom but had concerns that this could leave the award vulnerable to challenge.
As the SCCA notes, this freedom to instruct counsel is in line with international best practice. This includes the grounds for annulment in the UNCITRAL Model Law on International Commercial Arbitration and the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Award (better known as the New York Convention), neither of which allow for annulment due to use of non-local representatives.
On a broader level, it further underscores the strides that Saudi has taken in recent years to modernise its arbitration framework and business environment generally to appeal to the international community and ensure that investors can have confidence when doing business in Saudi.
It also demonstrates an active approach by SCCA/MoJ to recognise and address the concerns of arbitration users, which bodes well for the future.
SCCA’s study stated that party representation by non-Saudis and non-lawyers in arbitration proceedings is not one of the grounds for annulment specified in Article 50 of the Arbitration Law; thereby putting to rest the hesitation of allowing foreign legal counsel to represent parties in Saudi-seated arbitrations.