Cultural Issues in Dispute Resolution in Saudi Arabia - Essay Example

Topic: INTERNATIONAL ARBITRATION: AN EXAMINATION OF CULTURAL ISSUES IN DISPUTE RESOLUTION IN SAUDI ARABIA     International arbitration overview International arbitration refers to one of the most renowned ways of solving conflicts arising because of commercial international agreements as well as any other international relationship issue. As we all know, dispute in the world are inevitable. This is because e of the fact that they will always have to socially or commercially interact. On the process of interaction or commercial transactions people are bound to differ in one way or another. The entire of all that means that disputes as well as their solutions are part and parcel of our life as human beings and very essential for that matter. Human beings solve their disputes depending on the nature of the dispute, the cultures of the people involved in the disputes and the party involved in the settlement of the dispute in so many ways (Abbas,  2008). Examples include family disputes, business disputes and even learning institutions disputes. Arbitration is one of the means through which disputes are solves as far as trade is concerned. This arbitration is actually one of the oldest ways of settling disputes. It was so popular because of the fact that it was very cheap and very fast as far as dispute settling is concerned. It involves adjudicators who are a panel of arbitral panel or an individual in the process of dispute settlement. This arbitration also deals with the settlement of culture disputes. This is whereby two parties that are involved may be from a background of different cultural (William, 1998). Over the last five decades the international arbitration has remained very popular in its demand from people to settle conflicts in the world of trade. There are a number of reasons as why many parties would rather have their disputes settled by this international arbitration. One of the main reasons is that they would rather avoid the local practices, which are done by the national courts as well as the uncertainties that accompany them with. It is also one of the quickest means of conflict solving; it is also very efficient in all of its decision-making, the enforcement of the agreements in the process are very precise, it has a great commercial expertise or rather for the time it has been in existence it has proved to be very effective and efficient. Also another very important advantage with it is the level of confidentiality it has proved (Abbas, 2008). It is also describes as being a form of a hybrid dispute resolver. This is because it gives room for flexibility to the parties involved to design their own arbitral procedures. This international arbitration varies with reference to the country that is practicing it. It is not respected and highly in demand because of the fact that it is international but simply because it involves practices of different rules and laws. This means that any party can be perfectly well served through its proceedings. It is very well known to solve disputes in a very neutral way. This is because it embraces the legal requirements of all the parties that are involved and then solved the issue in a more neutral way. Unlike other local means whereby the national courts may have different laws and rules of doing it hence bring even more complications to the dispute (Harvey, 2003). This explains why many parties usually opt for the international arbitration way of solving disputes. Saudi Arabian Just like any other country, Saudi Arabia is a country that is governed by some cultural practices and taboos. Actually, when a dispute is between parties of very different cultural background, then it means that the resolution may somehow take long to be settled due to a crash in terms of the rules and the regulations. However, these cultural issues in trying to settle a dispute are bound to happen. Saudi Arabia is one of the greatest petroleum importer countries in the whole world. Its economy is based on the export of the petroleum and its byproducts. It is also know to have adhered strongly to the Islamic beliefs. This means that all the import barriers as well as the economic regulations that have been put forth are of extreme stringent to them. This is centrally to what the trade policies demands of the WTO country members. This means that some of the country’s cultural practices are not allowed in the World Trade Organization. Therefore, this led to a series of negotiations to allow it to be a member in the trade organization (Harvey, 2003). It should be noted that even far before it was recruited as a member in the organization, it always adopted the process of Arbitrator to settle its dispute especially those pertaining the foreign counterparts. It actually started its process of negotiating to be a member of the world trade organization not only to have its products open for export in the whole world but also to have it disputed settled in an international platform. After a series of successful negotiations, it became the 149th member of the World Trade Organization in the year 2005, the eleventh day of December. This then gave it a chance to be taking its trade disputes to the World Trade Organization. How Saudi Arabian culture conflict with international Arbitration Saudi Arabia is one of the countries that do not have a distinction as far as the settlement of the religious and state issue is concerned. This means that during the proceedings of the arbitration the state matter as well as the religious issues. This is because religious factors must be taken into consideration at the time of arbitration and Sharia is applicable in Saudi Arabia and its effect has to be taken into consideration at the time of arbitration. A very good example is the fact that they have to pray five times every day. During such times of prayer, the religious rules demands that the businesses must be shut down. This means that requirements have to be accommodated in the arbitration. This explains why arbitration international commercial in this country is termed to be troubled. This is because it deals with different arbitrations. Also there are a number of other differences that have resulted. Apart from the religious matters, also the issue of gender differences has brought. The Saudis has therefore, been forced to exclude some of their issues from taking them to arbitrates not only because of compromise but also because they would be contrary to the public order. This has then led to the conclusion that the public policies and the perception of the public order in the Saudi Arabia is very much different from the western culture. This means that since most of the countries, which are members of the World Trade Organization, are from the western culture then there is definitely some conflicts, which are bound to arise between them and the Saudi Arabia. A very good example of a law that really brings about conflicts between the Saudi and the arbitrate is the one that deals with the Diwan Al-Mazalem as the exclusive jurisdiction as far as all the disputed involving the foreigners are concerned. contractors or companies and their Saudi sponsor and such disputes are not amenable to commercial international arbitration. Public order in Saudi Arabia is determined by reference to the Shari’a (including its measure of the common good of humanity), and not just the parties involved in a dispute. In addition to that, the issue of enforceability and award and the fact that Saudi Arabia is a signatory to the New York Convention provides no security to foreign corporations who have entered into contracts in or with Saudi Arabian entities, in terms of enforceability of arbitral awards because of a different perception of public policy in Saudi Arabia. This leaves the other nations with many fears as far as the issue of investments and signing of any business contract with the country is concerned. In Saudi Arabia, also the issue of interest is of great importance as far as their Islamic jurisdictions are concerned. This is whereby their law called Sharia prohibits interest or riba. The main conflict that has arose due to this kind of a cultural practice is the issue of not having any court case or proceedings that have been able to deal with the awarding or even the enforcement of a law against any party in the religion of Islam that prohibits the payment of interest even in their domestic laws (David, 2005). Definitely, there must be interest gaining as far as the business world is concerned. The classical or rather the typical rules which have been set under the so-called Shari’a has seriously restricted the ability or the possibility to appoint the arbitrators; this is because the candidates require are meant to have the same qualifications just as a of judge, this includes being male as well as a Muslim. This is then is the position, for example, in the Oman as well as Saudi Arabia (Alan et el, 2007). The problem with this is that it limits the existing options that regards to the appointment of the arbitrators. A very good example is the issue if serving wine to the Saudi Arabian who are members of the international Arbitral Panel or the other party (Alan, 2004). This act can result into some very severe implications. This is because is alcohol is completely condemned in the Islamic religion. If in any case the seat of the arbitration is in Maccah or in Medina, then all of the non-Muslim parties as well as the arbitrators can never represent or even attend those arbitral proceedings because only the Muslims are meant to enter the city or rather allowed entry into the two cities.  The above Islamic rule then brings about a very serious conflict because definitely the other western countries will not agree to hold any proceeding in the above named cities. On the other side, these two cities are very important as far as the Saudi Arabian people are concerned. They would definitely also want some of the meetings to be held there (Essam, 2009). This means that the countries that are not of a Muslim background must then send a representative who is a Muslim. In most cases the representative may not be as much conversant with the issues that are to be handled during that session. As a result, they may prefer not too send any hence there arising a conflict. The issue of cultural conflicts then brings about a conclusion. Despite the fact that tha International Arbitration is the most preferred or rather trusted mode of any Dispute Resolution, it also has a disadvantage. This is because all the cultural issues are involved in the International Arbitration must then be clearly sorted out to ensure that the proceedings in the International Arbitration are very a successful, smooth as well as amicable dispute resolution procedure. This holds even more truth when the issue is considered from the point of view of Saudi Arabia being one of the parties. The reason being that there shall always be some aspects of conflict as far as the requirements of the arbitrate are in contrast with the laws of the Saudi Arabia (Yves, 1998).  It has been a serious issue and even great worry for the nation to get involved in the arbitration international dispute settlement. This is because the nation has had some fears of ending up compromising its religious laws on the process of trying to adhere to the regulations of the  international arbitrates. The Saudis has therefore, been forced to exclude some of their issues from taking them to arbitrates not only because of compromise but also because they would be contrary to the public order. This has then led to the conclusion that the public policies and the perception of the public order in the Saudi Arabia is very much different from the western culture (James, 2009).  This means that since most of the countries, which are members of the World Trade Organization, are from the western culture then there is definitely some conflicts, which are bound to arise between them and the Saudi Arabia. One of the article which is actually article 2 of the law of arbitrate, dictates that arbitrates shall not be accepted in matters where the option of reconciliation does not apply. This means that for some of the conflict which according to the Saudi Arabia cultural law dictates other punishment or penalty other than the reconciliation itself, means there will definitely be a conflict (Sherzod, 2009). This is because if the other party is the one that has insisted to take the matter to the arbitrate while the Saudis want the matter settled in their cultural way then it means that there will definitely be a great deal of a conflict. One of the procedures of the World Trade organization has within its scope of operations, is the issue of regulating trade between its member countries. This means only those countries who have agreed to participate in the negotiations as well as the deals with regulation of the trade between the participating countries; it also has the role of creating a platform for the purpose of facilitating all the international agreements of trade. This is actually the most important function as far as it is concerned to its member states. This means that is has a function of settling dispute resolution among all the member states for enforcing the adherence of the member states or signatories of the agreement to the WTO agreements which executed by authorized representatives of governments of the member countries subject to the ratification of the municipal parliaments of the respective states.. This means that for nations like Saudi which have other domineering laws due to their culture, will always be in conflict with the other country members during any dispute settlement (Sherzod, 2009). Conclusion In conclusion, it is important to note that there is usually a conflict existing between the Saudi Arabian cultures with the international Arbitration. The main cause of the conflict being the religious culture that exists in the country which basically goes contrarily to the rules and the regulations of the world trade organization. This is because the organization is not only comprised of countries that are of Islamic origin. Therefore, there arises some conflict of interest between the two parties. This leaves the other nations with many fears as far as the issue of investments and signing of any business contract with the country is concerned. This is because if the other party is the one that has insisted to take the matter to the arbitrate while the Saudis want the matter settled in their cultural way then it means that there will definitely be a great deal of a conflict.       Reference  Essam, T. 2009 .Practitioner's guide to arbitration in the Middle East and North Africa.  London: Juris Publishing, Inc.  Abbas,  A. 2008. Business and management environment in Saudi Arabia: challenges and opportunities for multinational corporations. Canada: Taylor & Francis  Alan, R. 2004. Law and practice of international commercial arbitration. Oxford: oxford university press.   Alan, Y., Jan, B. & Yasuhei, T. 2007.The WTO in the twenty-first century: dispute settlement, negotiations, and regionalism in Asia. Cambridge: Cambridge University Press.  David, E. 2005. Culture and customs of Saudi Arabia. Green wood: Greenwood Publishing Group  Harvey, T. 2003.Culture shock Saudi Arabia. Green wood: Greenwood Publishing Group James, C. 2009. Trade disputes and the dispute settlement understanding of the WTO: an interdisciplinary assessment. Emerald: Emerald Group Publishing  Sherzod, S. 2009. Retaliation in the WTO dispute settlement system.  Saudi Arabia:  Kluwer Law International.  William, E.1998. International Arbitration: treaties and procedure. A supplement to "International Tribunals”.  New York: Peace society Yves, D. 1998. Dealing in Virtue: International Commercial Arbitration and the Construction of a Transnational Legal Order.  Chicago: University of Chicago Press.  Read More