The case was rejected by the Commercial Department due to the presence of an arbitral agreement. The claimant raised an appeal on the ground that the respondent did not initially request for arbitration in the first hearing. This appeal was rejected by the Examination Committee which approved the judgment of the Commercial Department pursuant to that the first hearing was an exchange of documents and information regarding the case and did not contain any defenses or requests by the respondent. It is useful to point out that the SAL 1983 and the succeeding Implementing Regulations did not provide for writing as a condition of validity of arbitration or confirmation.
Although the provision of Article 5 of the SAL 1983 stated that the arbitration instrument shall be filed to the authority originally competent to hear the dispute, as well as signed by the parties or their representatives. 12 With consideration to these two issues, it seems that writing is not a condition of arbitration, 13 but a condition of enforcement. Therefore, the arbitration agreement can be confirmed with various means such as recognition and testimonial or presumption based on the general provisions of Sharia.
The Principle of Separability is considered of the most important guarantees of the effectiveness of arbitration clause. It means the independence of the arbitration clause contained within the contract from the rest of that contract. 14 Therefore the nullity and invalidity of the main contract do not influence the invalidity of the arbitration clause. 15 This principle had not been stipulated under SAL 1983 which raised controversy among legal scholars in the Kingdom about the possibility of the recognition of this principle in the case of the invalidity of the contract. 16 However, because of the lack of an explicit provision through the SAL 1983 or even its Implementing Regulations and according to the general provisions of the contracts in Sharia, the nullity of the main contract results in the nullity of all its conditions. Unless there exists a provision of the independence of the arbitration clause within the underlying contract.
Therefore, the new Arbitration Law of Saudi Arabia 2012 (SAL 2012), 17 as we shall see later, has dealt with this deficiency and stipulated explicitly the Principle of Separability. 18 3.
The Arbitral Tribunal Under SAL 1983, the arbitral process can be handled by one or more arbitrators as it is left to the freedom of the parties, but it is stipulated, in the case of more than one arbitrator, that the number of arbitrators should be odd. 19 Based on this law, three conditions should be met in the selected arbitrator. 20 Firstly is for the arbitrator to be experienced.
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