The New “Government Tenders & Procurement Law” opens a promising executive course for arbitration industry in KSA
Published Date: 16/12/2019
Mr. Yassin bin Khaled Khayat, Chairman of Saudi Centre for Commercial Arbitration (SCCA), extended his thanks and gratitude on behalf of SCCA to the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al-Saud and His Highness Crown Prince Mohammed Bin Salman for the sustained organizational support for institutional arbitration in the Kingdom. Reflecting the strategic governmental desire to both lay the foundations of this vital industry and enable its legislative framework to positively improve the business and investment environment in the Kingdom.
This statement was made following the new Government Tenders and Procurement Law coming into force in early December. The Law was issued by the Council of Ministers Resolution No. (649) dated 13/11/1440 H. An important innovation for the Kingdom, the Law granted the contracting government authorities the right to recourse to arbitration to settle their commercial disputes after obtaining the Minister of Finance’s approval to include an arbitration clause in the contract. Previously, an agreement to arbitrate government contract disputes could only be entered into with approval of the Prime Minister.
Khayat lauded, “The new Government Tenders and Procurement Law, along with its Implementing Regulations, issued by the resolution of Minister of Finance, H.E. Mr. Mohammed bin Abdullah Al-Jadaan, is a new chapter for the arbitration industry in its relationship with government institutions and state-owned companies in the Kingdom. The Law grants them the right to include the arbitration clause in contracts, including their major development projects, to settle the commercial disputes that may arise therein with no need to obtain an exception from the Council of Ministers (as previously required). Now, it is only required to obtain the approval of the Minister of Finance and comply with the restrictions set out in the Implementing Regulations.
"Day after day, the Kingdom becomes an increasingly attractive environment for business and investment - particularly in the context of the continuous modernization of its legislative framework supporting business growth - further supporting the national development plans and achieving the goals of Vision 2030,” added the SCCA Chairman.
On his part, Dr. Hamed bin Hassan Merah, CEO of the SCCA, confirmed that SCCA is delivering the requisite technical expertise - as per international best practices - to resolve disputes and provide arbitration and mediation services in more than 15 specialized technical areas. The arbitration is conducted in a manner guaranteeing the rights of and achieving the objectives sought by parties to the contract in light of the SCCA’s knowledge, experience and practical competency. Most recently manifested in the issuance of a specialized manual to assist contracting parties in the drafting of terms and conditions of their dispute resolution provisions.
“After years of work in the arbitration industry in the Kingdom, SCCA possesses the requisite operational and technical expertise to provide commercial alternative dispute resolution in a manner that is responsive to all the different customer groups and the various particulars of each conflict. All delivered as part of SCCA's continuous endeavours to adopt best standards and practices applied in this industry, including ongoing development of innovative dispute resolution products and services that enhance the environment for growth of business and investment in the Kingdom,” Dr. Merah added.