Reservation made upon ratification, “the Kingdom of Saudi Arabia hereby declares that the Convention shall not apply to settlement agreements to which it or any of its governmental agencies is a party, or any person acting on behalf of those governmental agencies.”
The official order giving effect to the Singapore Convention was the Royal Decree No (96), issued on 9 April 2020. The decree implements Saudi Arabia’s obligations under the Singapore Convention, with international mediation settlement agreements falling within the scope of the Convention directly enforceable in the courts of the Kingdom of Saudi Arabia from 5 November 2020. This is subject to the reservation that the settlement agreement in question does not relate to the Kingdom of Saudi Arabia, any of its governmental agencies, and any persons acting on behalf of those agencies.
Procedure for Enforcing International Mediated Settlement Agreements
It is likely that international mediated settlement agreements will be enforced in the same manner as arbitral awards, that is, through the Kingdom’s Execution Law. The Execution Law was issued through Royal Decree No. M/53 on 3 July 2012, and provides for the enforcement of certain documents in its execution courts.
- Execution documents falling under the remit of the law include authenticated contracts, commercial papers, and domestic and foreign judgements, court orders, and awards (art. 9 Execution Law). International mediated settlement agreement will need to meet the requirements under art. 4 of the Singapore Convention.
- The execution judge will be required to follow and respect Shari’a principles when undertaking enforcement, unless stipulated otherwise by law (art. 2 Execution Law)
- Over the course of execution, the execution judge is permitted to ‘take all precautionary measures and may order concerned authorities to provide necessary assistance’ (art. 7 Execution Law).
- A party is given five days to from the date of notification of the execution order to meet its obligations, after which the execution judge has powers to order for measures including a travel ban, freezing of assets, property disclosure and seizure orders, and a ban on governmental authorities or financial firms from dealing with the party. (Art. 46 Execution Law)
Other National Mediation Laws
The Commercial Courts Law, issued through Royal Decree No. M/93 on 15 April 2020, sought to reorganize and further empower the KSA’s commercial courts. It also includes provisions encouraging the use of alternative dispute resolution. In particular, it imposes mandatory conciliation and mediation under certain circumstances.
The situations requiring mandatory mediation under the Commercial Courts Law are provided for under the Commercial Courts Regulations, issued through Ministerial Resolution No. 8344 on 18 June 2020. They include disputes valuing between SAR100,000 and SAR1million arising out of commercial contracts, or disputes which contain contractually agreed pre-claim mediation provisions.
The Ministry of Justice’s (MoJ) major ADR initiatives were recently outlined in a comprehensive report released in February 2021. Among the highlights are the following:
- The MoJ launched the Taradhi platform, for the remote provision of mediation services from filing the case up to reaching the mediation result, without having to visit the court. The MoJ has introduced several divisions and departments, including its own Conciliation Centre, and empowered notaries to notarize mediated settlement agreements.
- The MoJ has implemented the mediation system through a series of services and decisions, aiming to increase the percentage of successfully mediated cases. The goal is to reduce the influx of lawsuits, fast-track decisions, and provide means for ADR through non-profit organizations and the private sector - including the SCCA. Men and women can register as mediators or conciliators.
- Within the initiative for implementing the mediation system, the MoJ has approved new procedural rules for mediation and conciliation offices, aiming to make mediation a viable option for resolving disputes.
- The MoJ has recognized mediation records as ‘enforcement instruments’ after approval by the Conciliation Center. The step enhances mediation and conciliation procedures in Saudi Arabia and promotes the resolution of disputes through mutual consent.
- Saudi Arabia ratifies the United Nations Convention on International Settlement Agreements Resulting from Mediation
- Saudi Arabia Signs The First International Convention On Mediation, Relevant To World Trade Dispute Settlement Agreements
- Saudi Arabia Signs International Mediation Settlement Agreement
Contributor: Saudi Center for Commercial Arbitration (SCCA)