ADR and Arbitration in the Saudi Legal System: A Critical Assessment

Introduction to Alternative Dispute Resolution

The benefits of using arbitration — and alternative dispute resolution (ADR) more broadly — in lieu of formal adjudication in the courts have attracted a growing amount of interest from the private sector around the world. Davis and Katbeh (2009) point out that this trend is especially evident in the politically unstable Middle East. As they observe, "Increasingly, commercial alternative dispute resolution (ADR) programs are being created throughout the world. These ADR centers provide a model of peaceful dispute resolution for other countries, particularly when they are located in a geographic area known for political conflict" (Davis & Katbeh, 2009, p. 67).

Certainly, Saudi Arabia is no stranger to political conflict, but there are some interesting aspects concerning commercial dispute resolution that are virtually unique to the Saudi legal system. Vogel (2000) reports that in cases where disputes involve parties from countries other than Saudi Arabia, the Saudi courts give full sway to those parties' legal systems, even if the outcomes differ from conventional Saudi laws. As Vogel explains, "Commercial agreements often provide for foreign law to govern the parties' interactions and any disputes between them, and commercial arbitration or alternative dispute resolution may often produce different outcomes than would result were the case brought before regular courts" (p. 8). In most countries, national laws and practices prevail when disputants come before the courts. Vogel notes that, "States are jealous of their monopoly over family laws such as divorce. In such matters, state-legislated and court-enforced rules and requirements are usually considered public policy, which must hold over any contradictory settlements" (2000, p. 8).

The need for restorative justice. In developed as well as developing nations, there is a need for a formal avenue — including alternative dispute resolution — to pursue restorative justice when events deprive disputants of their legal rights (Levad, 2012).

The development of ADR: a comparison between developed and developing countries. Commercial dispute resolution systems differ from country to country on two fundamental aspects of self-determination and control by the disputants involved: (a) control over the overall system design, and (b) control within a given case using a specific process provided by that overall system design (Bingham, 2004). According to Bingham (2004), the design of the commercial dispute resolution approach used in a given country includes: (a) choices regarding which cases are subject to the process, (b) which process or sequential processes are available — mediation, early neutral evaluation, or binding arbitration, for example — (c) which due process rules apply, and (d) other structural aspects of a private justice system.

The nature of commercial disputes. Disputes of a commercial nature that are brought before arbitrators span the complete gamut of contractual provisions, including most especially performance and costs (Vadi, 2010).

ADR and International Institutions

The role of international institutions such as the United Nations Commission on International Trade Law (UNCITRAL) in enhancing ADR is to provide "a fixed, predetermined process to settle disputes" (Choi, 2003, p. 1234). The Model Law provided by UNCITRAL, for example, "provides countries with a template that they can adopt for their national laws in order to 'provide a hospitable legal climate for international commercial arbitration'" (Griffith & Mitchell, 2002, p. 185).

References

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