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Running Head: THE NEW SAUDI ARBITRATION LAW AND ITS COMPATIBILITY WITH INTERNATIONAL BUSINESS TRANSACTION 1

THE NEW SAUDI ARBITRATION LAW AND ITS COMPATIBILITY WITH INTERNATIONAL BUSINESS TRANSACTION 16

Title: THE NEW SAUDI ARBITRATION LAW AND ITS COMPATIBILITY WITH INTERNATIONAL BUSINESS TRANSACTION

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Introduction

Arbitration in Saudi Arabia benefits the international business community as it ensure that the disputes incurred in the markets are solved without having o follow legal procedures in the country’s courts. The country allows that the disputes are settled between two parties which are in conflict and hence an understanding is met in a precise manner. After the arbitration, the internal business people should accept the outcome of the arbitration process so as to ensure that the available time is safeguarded for them to continue doing their business. (United States, 2007). 

The two parties should present enough evidence for the arbitrator to give the final judgment which should be accepted and respected by the involved parties. This ensures that the disputes occurring in the market are solved within a short duration of time hence saving them a time which can be used to increase the rates of production of their organization.

This is the mostly used method of disputes solving especially in the commercial businesses and the international transactions which may not be familiars with the court’s rulings of the country. The arbitration used by Saudi Arabia government ensures that the employees’ contracts are highly protected to protect them from the exploitation brought by the international communities with an aim of benefiting their businesses without caring about the welfare of the of their workers.

The terms in which the employees were employed should be kept to ensure that the commercial contracts are done as per the law. In countries like Saudi Arabia, arbitration is termed as mandatory as it helps in solving the available disputes without having to go to courts and hence it is used as an alternative court which does its processes in a precise and a simple manner. The international investors in Saudi Arabia sat and came out with procedures to which their disputes should be solved without having to exploit any of the parties.

The future disputes of the parties should be held to arbitration to ensure that the parties do not subject themselves to such problems again. However, the arbitration of the country can therefore subject the affected parties to mediations which enables them to come to better and reasonable understanding. The arbitration used in Saudi Arabia should be binding and hence a proceeding is given to control the two involved parties are brought to an understanding, agreement and a legislation. (Willy, 2010). 

Advantages of arbitration

The international investors are exposed to limited rights of review and are therefore able to enjoy the appeals of the arbitration awards. According to the Saudi Arabia’s arbitration, it evident that the arbitration is not similar to the judicial proceedings, the expert determination, mediation and the alternative disputes resolution. The international investors in Saudi Arabia enjoy the following advantages associated with arbitration:

· It enables the involved parties to choose the tribunal to which their disputes should be subjected to

· It is always faster than solving disputes through the court litigation

· The arbitration proceedings are confidential hence are not made public

· The arbitration awards are easily enforced as compared to the courts verdicts in Saud Arabia

Disadvantages of arbitration

Moreover, the international business people in Saudi Arabia face the following disadvantages in situations whereby the arbitration process is employed as a way of solving disputes.

· The arbitration awards cannot be directly enforced

· The discoveries in arbitration are nonexistent

· The enforcement of some measures in arbitration cannot be easily enforced

· Arbitration gives the international business community very limited avenues for an appeal

· In times when the arbitration is biding, the parties are sometimes denied an access to the judges who are entitled to disputes solutions.

Arbitration selection process

Arbitration is the accepted principal as it solves the problems experienced in the international commercial transactions whereby people from the entire world get united to do business. The efficiency and the effectiveness of Arbitration differ from one country to the other due to the nature in which the countries are ruled by their respective leaders. (Elkouri, 2016). 

In the Kingdom of Saudi Arabia, arbitration is commonly used as it is the most effective and hence the problems are solved without subjecting the business people or countries into conflicts. Despite this, the manner in which business have been run in the Saudi Arabia community as required by law has been rough due to the continued interruptions by the local people.

The roughness in which the law of arbitration has been subjected to has not been consistent for the past few years and therefore the community required by the law of the land has been working to make the reformation of the seriously affected aspects. The top government officials and the legal community are been trying to influence the law hence affecting its functionality. (Ola, 2016).

The termination of the law will affect commercial disputes experienced by the international community in Saudi Arabia and hence the a strategy should be put in place safeguard the law which have seen the country undergo successive developments in terms of economy and infrastructures. Again a team should be put in place to make the required examinations on how the arbitration worked in Saudi Arabia during the ancient day so as to make changes to the points which are of no use. However, considerations should be done so as make the needed reformations to avoid the exploitation of the international community.

Which different considerations are done, the international community will be attracted to the country therefore improving the economy of the country. This will again ensure that the country develops a mechanism of enforcing the foreign arbitral awards and hence reducing the termination of the existing contracts.

Due to the flexibility and the capacity in which Saudi Arabia is run, it is important to ensure that arbitration is developed so as to differentiate both national and the international arbitration. Different instruments are used to detect the differences therefore coming up with a way attracting more investors from the international communities. (Elkouri, 2016). 

The National and the international communities’ policies should be established by the Saudi Arabia’s government and hence a policy put in place for the regulations of the Arbitral tribunals and therefore improving the manner in which judgments are done in their courts of law.

Due to the pressure experienced by the Saudi Arabia’s government to internationalize the arbitration, people should be appointed to examine, discuss, evaluate and make the needed presentation according to the market’s stands. This should therefore give the team a responsibility to look for system in which the international community will be harmonized by meeting their own standards of arbitration.

Investment arbitration rules

Due to different disputes underwent by the international community, a historical research should be carried out so as to give out the historical background of the arbitration by the Muslims and the foreigners in the country. According to a research carried to determine the manner in which different businesses are carried out in Saudi Arabia, it is evident that the country is in need of well developed systems of arbitration due to the lack of legal permission to carry out businesses like banking and some other commercial activities made to uplift the economy of the Islamic Nation. (Gomez-Acebo, 2016). 

Due to the refusal by the country to permit some businesses to be carried out, investors have been unable to run their business smoothly hence some running away. This therefore becomes a big blow to the country as the amounts of revenue collection reduce significantly. This lives the foreigner complaining since they are denied chances of participating in the foreign arbitral awards due to the undeveloped arbitration of the Arabic Kingdom.

Arbitration should take great care of the business people to encourage their productivity and hence to motivate them to continue working. For the business to be able to coordinate the all the business activities taking place in the country, a process of evaluating the arbitration practice should therefore be used in Saudi Arabia. This will be effective as it will be used as a tool to unite the international business people to make their transactions with harmony.

Before the Arbitration was brought to existence in the Arabic Kingdome, there was disunity between the foreigners and the Arabs in Saudi Arabia. Before it was introduced in the Arabic markets, the social and the cultural lives of the people was different from the current live with the arbitration in place. The manner in which disputes were solved in the ancient times before brought conflicts to the business people therefore other could end up fleeing the country to other countries whereby disputes were solved accordingly.

Public Policy In International Arbitrations

Before the arbitration was brought, there existent many social injustices which in one way scared away investors. This was because people could not consult or share ideas with other hence making the business face different challenges which could lead to their termination.

Comparing the lives of the business people in the days before the Arbitration was introduced in the country and the current lives when arbitration is put in place in the country to control different organization, it is evident that it is easy to carry out businesses as compared to the past years. This has encouraged the business people and the international community to identify the gaps existing in the markets so as to look for ways of safeguarding the welfare of the customers by the provision of quality goods and services.

Arbitration has helped in solving the tribal conflicts amongst the people in the Saudi Arabia by discouraging discriminations and hence putting in place mechanisms of punishing those found guilty of interfering with the business class. The people from other international country in the entire world are looking forward to having their businesses set in the Arabic Kingdome due to the strategies put in place to improve the international business transactions.

The government through the introduction of arbitration encourages the foreigner to receive equal treatments in the same manner as the Arabs in the Saudi Arabia without having to look at their backgrounds, races, language and their sex which could build a foundation to exploitation of the investors. It is through the arbitration laws whereby the internal relations, external relations and other relations are encouraged and hence enabling the foreigners to freely interact with the buyers without getting limited by the government. (Gomez-Acebo, 2016). 

  Arbitration A Technique Used To Solve Disputes Outside The Courts

Due to the quality management by the Saudi Arabia government, the arbitration law has become very compatible with the international business transactions which have made it cheap to run all the business organizations. The compatibility has been brought by the technique in which tribal conflicts are solved therefore harmonizing the market for an effective business. Moreover, settlement disputes are again solved accordingly to enable the foreigners to live in a secure environment by reducing the possibility of terror attacks.

The law is implemented by the country’s rulers who are people of honor, truthfulness, honesty, experience and authority which mandates them to punish whoever is found exploiting the lives of the foreigners through unfriendly practices which are made to lower their morale and dignity. The international investors are accorded a lot of respect by the law which enables them to get attracted to the business code of conduct of the country.

The law again gives those in authority enough training for them to acquire the knowledge needed by them to settle the occurring suits and disputes amongst the business people. Due to the establishment of the Arbitration law, a large population of the unemployed gets jobs to run businesses on behalf of their employees therefore becoming able to run their families. Again, the living standards of the people are improved by reducing the dependency rates. This will again reduce the crime rates in the country as majority of the citizens are employed and are able to cater for their needs without having to rely on other people for survival.

Arbitration law has given all people equal opportunities without having to consider their gender hence increasing the rates of production of the country. The amounts of goods produced within a day are high due to the increased man power available in different markets. Women are allowed to occupy different job capacity hence ensuring that they are able to cater for their needs without depending on their husbands. The laws again brought free interaction of the people from the entire world to the conducive environment offered by the government of the land.

The law presumes the traditions, habits and the customs of the people. The people are able to receive different supports from other metaphysical powers hence realizing the truth about production. The ability of the arbitration law to obey the traditions of the people in Saudi Arabia has made it easy for communities to reach to fair and useful solutions of problems related to international unity and production of the investors. (Born, 2016). 

  Commercial Arbitration

However, the market arbitrators are therefore established so as to settle the commercial matters of the Arabs and the foreigners. The marketplace arbitrator has created room for international investors, politicians and traders to purchase and make sales of all what they require. The market arbitrators brought in place by law ensure that all the disputes associated with trade and the arguments of the people in the market pace are solved in the most precise way possible.

This will ensure that harmony prevails in the markets place therefore giving the customers a chance to select and make informed decision about the items they require. The customers are again given a very humble environment hence going for quality products without their decisions getting influenced by the sellers. It is because of this that the business will prevail due to reduced congestion in the market which might result to theft and other social crimes resulting from congestion in the markets and towns in which a business is set.

Whenever the arbitration process becomes disorganized, the investors in a country are discouraged and hence others end up withdrawing from their businesses from the country. A procedure is used in Saudi Arabia so as to ensure that all the investors are taken a great care of hence enabling them to continue their production efforts. Different strategies such as the use of formal procedures are always made applicable for the business people from other international country to settle their settlement disputes on where each should locate his business.

According to various researches carried out about the history of arbitration in Saudi Arabia, it is evident that the theory about arbitration developed later after the emergency of Islam and it brought peace as many international countries converge together with an aim of doing business. It has enabled the sharing of different products produced from different countries in the entire world. The countries are able to share whatever product they cannot produce hence enabling the people to live enjoyable lives as they are able to acquire whatever product they need.

According to the arbitration law, a profitable competition is controlled by the top government officials to ensure that the investors are not exploited by the cartel existing in the country. It will therefore ensure that the buyers are provided with quality products at reasonable prices so as to attract them again in the business entity.

Enforcement

The law prohibits the over pricing of the products supplied to the buyers, supply of poor quality products, the supply of dirty goods which might get contaminated easily and provision of low quantity products to the buyers hence reducing the possible exploitation. The law provides the consumers with enough rights for them to be provided with products which do not affect their dignity. The government through the arbitration law ensures that all the stakeholders in the market are taken care of so as to make their welfare catered for.

This will motivate everybody in the market whoever is concerned with the productivity of a country therefore ensuring that the citizens’ welfare is not mistreated.

The law is enforced so that the investors are not discouraged by the cultures and the customs of the country. The discouragements of the international business people make it impossible for the business people to continue working therefore reducing the productivity of the country in which the country is set.

According to the Islamic beliefs, the laws were put in place to enable the people to benefit from the quality goods produced by the international business people. The significance of the arbitration law is witnessed as many companies put in place in Saudi Arabia are producing quality goods which do not affect the welfare and the health of the customers. The goods produced by each company are controlled by the arbitration law which does not permit the production of harmful goods. (Born, 2016). 

When a company is caught producing harmful products, it is subjected to a court of law where the law might dictate it for a closure within a set period of time. This will again ensure that every product produced by the company meets the set standards to avoid consumer’s exploitation.

Multi-tier dispute resolution clauses

Despite the international Business Transactions being concerned with credit course and hence focusing in the discussion of the foreign laws governing the business sector in a given country, it is also made to control both the national and the international trade. The private international business with operate under the rules put in place by the arbitration process hence making it for the foreigners to run businesses in different countries.

The law controls three basic methods in which businesses are done especially in foreign countries. Some of the business methods controlled by the law of arbitration are licensing and franchising, the sales of different goods and services and the investments done in foreign countries.

Arbitration ensures that the law is applied in different areas of diversity such as the commercial transactions, taxation, and antitrust, intellectual property, the conflict law to bring harmony in the market, the civil procedures, contracts and the international law which controls all the businesses run by foreigners to ensure that they do not disobey the law of the country in which they are set in.

Regionalization of arbitration

The arbitration law works more effectively in ensuring that the international business transaction is not affected by the manner in which different activities are carried in a country more so in Saudi Arabia. Due to the continued flow of the international business and the trade and the manner in which the businesses have been contributing positively to the economy of different countries in the entire world, the country in which an international business is set should ensure that the foreigners are not exploited by the locals.

Increased incidences of transnational business laws have led to the protection of the international businesses therefore attracting many investors in Saudi Arabia. As a result of the protection offered to the business people, many job opportunities are created therefore subjecting the citizens of the country to high incomes which enables them to satisfy their basic needs effectively. The people will again be able to take their children to bigger school hence improving their academic performance. (Elkouri, 2016). 

The arbitration laws motivates the investors to identify the available gaps in the markets hence satisfy both the secondary and the primary want of the people in Saudi Arabia. The gaps are filled by making use of the locally available products as well as recycling other to come up with a useful commodity.

According to researches by different investors, the law of arbitration makes it possible for the people to conserve the environment by using all the wastes accordingly to make more useful products which does not affect the environment. Some of the products prohibited by the arbitration are plastics which do not decompose when subjected to the environment therefore others leading to sewage blockage hence polluting the environment.

The international business transactions ensure that legal procedures are put in place to ensure that the businesses are obeying the set standards so as to contribute to the economy of the country. Some of the legal requirements put in place by the law of arbitration are employment of qualified employees to ensure that quality products are produced, supervising the progress of different companies so as to make sure that they are producing the products in which they are legalized to produce.

The international investors are subjected to negotiations and drafting of the commercial contracts which are dictated by the international sales, insurance of the business to cover all the risks, the regulations of the goods entering and leaving a country distributors and agencies, the transfer of technology and the foreign direct foreign investment. The international litigation and arbitration has therefore ensured that the businesses are meeting the set goals and objectives hence reducing the number of losses to be incurred. (Willy, 2010). 

Conclusions

The main focus of arbitration is the transactional aspects to which investments are done accordingly and hence decisions made to allocate risks in the international businesses in a very wide tool which is made to control the transactional insurances of the intended businesses. Different commercial terms associated with arbitration control the cultural issues of the country as well as the economic and the political issues which bring about good governance.

When the international business transactions are not controlled by the arbitration in Saudi Arabia, the business started by the international investors might tend to face different challenges which might again lead to the termination of business. The arbitration gives the international business transactions by the international investors and upper hand to operate under conditions which are not considered by the national investors within the country.

For the arbitration to be successful, different procedures should be followed for the process to be acceptable by many people by solving the problems without favoring a one of the parties. The agreement is met by the international business people to ensure that all the disputes occurring in the market are only solved through arbitration to reduce discrimination. (United States, 2007). 

References

United States. (2007). Arbitration. Washington, D.C.: U.S. Securities and Exchange Commission.

Willy, A. A. P., & Willy, A. A. P. (2010). Arbitration. Wellington [N.Z.: Brookers.

Elkouri, F., Elkouri, E. A., In May, K., In Sanders, P. M., In Sullivan, M. T., & American Bar Association. (2016). How arbitration works.

Born, G. (2016). International arbitration: Law and practice.

Gomez-Acebo, A. (2016). Party-Appointed Arbitrators in International Commercial Arbitration.

Ola, Ø. N. (January 01, 2016). Confidentiality and Public Access in Arbitration. Tidsskrift for Forretningsjus, 4, 291-302.