Non Arbitration Agreement Template for Saudi Arabia

A Non Arbitration Agreement is a legal contract that specifically excludes arbitration as a dispute resolution method, ensuring that any conflicts between parties will be resolved through the Saudi Arabian court system. This document provides clarity and certainty about the judicial forum for dispute resolution, preventing parties from being compelled to use arbitration procedures when they prefer traditional litigation.

When do you need this document?

You need a Non Arbitration Agreement when entering into commercial relationships where you want to ensure disputes are handled by Saudi courts rather than arbitration panels. This is particularly important for government contracts, joint ventures with local partners, or situations where you require the enforceability and recognition that comes with Saudi court judgments. Companies often prefer this approach when dealing with complex commercial disputes that benefit from the specialized expertise of Saudi Commercial Courts, or when local law requires court jurisdiction for certain types of contracts.

Key legal considerations

The agreement must clearly identify all parties and specify the scope of disputes covered by the non-arbitration clause. You should include detailed provisions about court jurisdiction, outlining which Saudi courts will have authority over different types of disputes. The document should address preliminary dispute resolution steps, such as mandatory negotiation periods, before court proceedings can commence. Consider including provisions about the applicable law, legal costs, and enforcement procedures. It's crucial to ensure that the exclusion of arbitration doesn't conflict with any mandatory arbitration requirements under Saudi law or international treaties that Saudi Arabia has ratified.

Legal requirements in Saudi Arabia

Under Saudi Arabian law, your Non Arbitration Agreement must comply with the Law of the Judiciary (Royal Decree No. M/78) and Civil Procedures Law (Royal Decree No. M/1) to ensure proper court jurisdiction. The agreement should specify whether disputes will be heard in Commercial Courts under the Law of Commercial Courts (Royal Decree No. M/93) for business-related matters. You must ensure the document complies with the Commercial Law (Royal Decree No. M/32) and consider the Enforcement Law (Royal Decree No. M/53) for judgment execution. The agreement should be drafted in Arabic or include certified Arabic translation for enforceability in Saudi courts. All parties must have legal capacity under Saudi law, and the document should include proper notarization and witnessing requirements as per local legal practice.