The winning party obtains the arbitral award, but an award on its own restores no rights unless it is enforced. Meanwhile, the other party wonders whether it can object to it. Both questions are governed by clear rules in the Arbitration Law and the Enforcement Law, and understanding them helps both parties make the right decision at the right time.
The binding force of an arbitral award
As a rule, an arbitral award issued under the Arbitration Law has the force of res judicata and becomes enforceable once the statutory procedures are met. The award is not subject to the ordinary means of challenge available against court judgments, such as an appeal on the merits; instead, an action for its annulment may be brought only in specific, exhaustively listed cases.
The annulment action: when is it admissible?
An annulment action is filed before the competent Court of Appeal within the period set by law, a relatively short period that must be watched as soon as the award is notified. Most importantly, the court does not re-examine the merits of the dispute or review the tribunal's assessment of the facts; its review is confined to specific grounds, the most prominent of which are:
- The absence of an arbitration agreement, or its invalidity or lapse.
- A party's lack of capacity at the time the agreement was concluded.
- A party being unable to present its defence, for example by not being properly notified of the appointment of the arbitrator or of the proceedings.
- The tribunal deciding matters not covered by the arbitration agreement, or exceeding its limits.
- The tribunal being constituted, or the arbitrators appointed, in a manner contrary to the law or to the parties' agreement.
- The award contravening the provisions of Islamic Sharia or public order in the Kingdom.
An annulment action is not a second chance to re-argue the case. If your objection is to the tribunal's assessment of the evidence or its interpretation of the contract, that is not, in principle, a ground for annulment.
Enforcing a domestic arbitral award
To enforce an award within the Kingdom, the holder of the right applies to the competent court for an enforcement order under the Arbitration Law, and enforcement procedures are then pursued before the competent enforcement authority. Before issuing the order, the court verifies certain essential matters, including that the award does not conflict with a prior judgment on the same subject, does not contravene Sharia or public order, and has been properly notified to the party against whom it was issued.
- Obtain the original award or a certified copy, and a copy of the arbitration agreement.
- Prepare a certified translation if the award is not in Arabic.
- Keep proof that the award was notified to the other party.
- Track the statutory periods, since an enforcement application is, as a rule, linked to the expiry of the time limit for an annulment action.
Foreign awards and the New York Convention
The Kingdom is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which gives awards issued in member states a clear route to enforcement in the Kingdom, and likewise for arbitral awards issued in the Kingdom when enforced in member states. An application to enforce a foreign award is filed with the competent enforcement authority, which verifies conditions including reciprocity, that the award does not contravene public order, and that the party against whom it was issued was properly notified and given the opportunity to present its defence.
Practical tips for both parties
- If the award is in your favour, start preparing the enforcement file early, and identify the other party's assets and where they are held.
- If the award is against you, consult a lawyer immediately to assess whether a genuine ground for annulment exists before the time limit expires.
- Consider an amicable settlement after the award, as it may be faster and less costly than compulsory enforcement.
The post-award stage calls for speed and precision at the same time. Our team helps clients assess the award, bring or respond to an annulment action, and pursue the enforcement of domestic and foreign arbitral awards.