Critical overview of the enforcement of foreign arbitral awards in Dissertation - 1

Critical overview of the enforcement of foreign arbitral awards in Saudi Arabia - Dissertation Example The onset of globalization, which is characterized by the drastic integration of international trade into one single market, further underscored this as trade disputes and disagreements between countries emerge with the increase in international commerce. According to Lu, Verheyen and Perera, arbitration has been the most common dispute resolution mechanism today both in the international market and among parties that conduct business with sovereign states that the enforceability of awards has become increasingly important and practical.1 (p. 163-164) According to FINRA, parties may even prefer arbitration than a juridical process because the process is faster and more effective.2 Currently, the multilateral arbitration mechanism that most states are subjected to is the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 otherwise known as the New York Convention. As of 2009, 142 out of the 192 members of the United Nations signed the convention. The majo rity of global trading organizations such as the World Trade Organization (WTO) and the North American Free Trade Association (NAFTA) also accede to this convention. It mandates all courts of the ratifying states to enforce and recognize private agreements and â€Å"arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought, and arising out of differences between persons, whether physical or legal.†3 Saudi Arabia has been receptive of foreign arbitration awards in the past and rarely elevated disputes to international fora but its courts do not automatically endorse foreign judgments.4 In April 19, 1994, the country signed the convention. Some changes have been effected with regards to enforcement of arbitration awards. When Saudi signed the convention, a royal decree (No. M/11 of 16/7/1414) was released, which provided that recognition and enforcement of foreign awards should be limited to those made in the territory of States, which have also acceded thereto.5 This among other factors such as the persistence of Islamic law and the effects it entail in doing business in the country has made the situation complicated and at times problematic particularly in terms of the enforcement of arbitral awards. This problem would be investigated by this research, with the initial expectation that there are numerous variables that hinder and limit such enforcement particularly in the religious and bureaucratic spheres. 3.0 Scope of the Study In pursuing the research objective, this research would focus on two important conventions that Saudi is party to: the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 and the Riyadh Convention. These mechanisms would be used as the standards by which arbitration awards enforcement are either successful or a failure exclusively in the Saudi experience. 4.0. Methodology Since this is a descriptive and analytical research, this study will not use models for empirical inquiries. Instead, this researcher will use a combination of ‘black-letter' doctrinal analysis and ‘law in context' approaches. The idea is to capture the complexity of having to discuss the general subject of