The Effectiveness of the International Investments Arbitration - Essay Example

The chapter will evaluate the extent of the role of these courts in the effectiveness of arbitration by criticizing and analyzing the SAL, and the practice of the courts. 1. The Role of National Courts at the Beginning of Arbitration The need for the interference of national courts at this stage, as well as the process of applying the arbitration agreement, are highlighted in two cases stated by the SAL; these cases are addressed in the following sections. 1.1 Binding to the Arbitration Agreement Arbitration draws its legal legitimacy from the arbitral agreement between the parties.

6 this agreement .7 This approval takes two forms: either within the original contract between the parties that promises to refer the future dispute to arbitration or in a separate agreement between the two parties. . In this case, the court does not recognize the arbitration agreement and considers the non-raising requests of the arbitration agreement at the beginning as an implicitly conceding on arbitration". In case No. 179/1410,14 the plaintiff raised a claim before the BG, regarding bonuses.

After the presentation of the arguments of both the parties in the first session, the defendant in the second session requested to refer the dispute to arbitration due to the existence of an arbitration agreement between the two parties. The Commercial Department refused to continue hearing the case because of the existence of an arbitration agreement. The Examination Committee rejected the judgment and upheld that not insisting on arbitration initially was comparable to "implicitly conceding on arbitration".

15 The second cases request a referral to arbitration before any defenses or other demands. In these cases, the Saudi courts do not distinguish whether the request is at the first or second session, or even after the issuance of a judgment in absentia, as long as it is the first request of the defendant. In case No. 205/1415,16 between Saudi and Turkish companies, the Commercial Department issued a sentence in absentia in favor of the claimant. Based on the existence of an arbitration agreement between the parties, the Turkish company appealed.

The Examination Committee revoked this judgment and held that the BG had no jurisdiction because of the existence of an arbitration agreement. In case No 10/1416,17 between Danish and Saudi companies, the defendant claimed that the Saudi company bought medicines and did not pay the cost.