Article 3 of the Saudi Arbitration Law
المادة 3 من نظام التحكيم · الباب الأول: أحكام عامة
The article sets out when arbitration is international under the Law, provided its subject is a dispute relating to international trade.
Official text (Arabic)
This article has not been amended since the law was issued.
يكون التحكيم دولياً في حكم هذا النظام إذا كان موضوعه نزاعاً يتعلق بالتجارة الدولية، وذلك في الأحوال الآتية:
1 - إذا كان المركز الرئيس لأعمال كل من طرفي التحكيم يقع في أكثر من دولة وقت إبرام اتفاق التحكيم، فإذا كان لأحد الطرفين عدة مراكز للأعمال فالعبرة بالمركز الأكثر ارتباطاً بموضوع النزاع، وإذا لم يكن لأحد طرفي التحكيم أو كليهما مركز أعمال محدد فالعبرة بمحل إقامته المعتاد.
2 - إذا كان المركز الرئيس لأعمال كل من طرفي التحكيم يقع في الدولة نفسها وقت إبرام اتفاق التحكيم، وكان أحد الأماكن الآتي بيانها واقعاً خارج هذه الدولة: أ - مكان إجراء التحكيم كما عيَّنه اتفاق التحكيم، أو أشار إلى كيفية تعيينه.
ب - مكان تنفيذ جانب جوهري من الالتزامات الناشئة من العلاقة التجارية بين الطرفين.
ج - المكان الأكثر ارتباطاً بموضوع النزاع.
3 - إذا اتفق طرفا التحكيم على اللجوء إلى منظمة، أو هيئة تحكيم دائمة، أو مركز للتحكيم يوجد مقره خارج المملكة.
4 - إذا كان موضوع النزاع الذي يشمله اتفاق التحكيم يرتبط بأكثر من دولة.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 3 explained in plain English
This article sets the standard for describing arbitration as international. The basic condition is that its subject is a dispute relating to international trade, and then one of the following cases must apply:
- Different states of the principal place of business: where the principal place of business of each of the parties is in more than one state at the time the arbitration agreement is concluded. If one of them has several places of business, the one most closely connected with the subject of the dispute governs, and if one or both of them have no specific place of business, his habitual residence governs.
- The same state with a foreign element: where the principal place of business of the parties is in the same state at the time the agreement is concluded, but one of the following places is outside that state: the place of arbitration as fixed by the agreement or as the agreement indicates how it is to be fixed, or the place of performance of a substantial part of the commercial obligations, or the place most closely connected with the subject of the dispute.
- Where the parties agree to resort to an organization, a permanent arbitral body or an arbitration center whose seat is outside the Kingdom.
- Where the subject of the dispute covered by the arbitration agreement is connected with more than one state.
The importance of this description appears in Article 2, since the Law applies to international commercial arbitration conducted abroad if its parties agree to subject it to its provisions. Article 4 also allows the parties to authorize others, including arbitration centers inside or outside the Kingdom, to choose the procedure.
To assess whether your dispute is international arbitration, you can consult a lawyer specialized in arbitration, international cases and foreign investment.
Practical example
A company in Riyadh and another in Dammam, both with their principal place of business in the Kingdom, concluded a contract to carry out a substantial project in Jordan. If the dispute between them relates to international trade, the place of performance of a substantial part of the obligations being outside the Kingdom makes the arbitration international under paragraph (2) of the article.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 3 of the Saudi Arbitration Law
Does arbitration become international just because one party is foreign?
The article's standard is the location of the principal place of business of each party at the time the arbitration agreement is concluded, with the condition that the dispute relates to international trade, not the party's nationality.
If we choose an arbitration center outside the Kingdom, is the arbitration international?
Yes, if the parties agree to resort to an organization, a permanent arbitral body or an arbitration center whose seat is outside the Kingdom and the subject of the dispute relates to international trade.
What if one of the companies has more than one branch in different states?
The one most closely connected with the subject of the dispute governs.
More articles on Scope and General Provisions of Arbitration
- Article 1
The article defines three key terms in the Arbitration Law: the arbitration agreement, the arbitral tribunal and the competent court.
تدل العبارات الآتية الواردة في هذا النظام على المعاني الموضحة أمامها، ما لم يقتض السياق خلاف ذلك : 1 - اتفاق التحكيم : هو اتفاق بين طرفين أو أكثر على أن يحيلا إ
- Article 2
The article sets the scope of the Arbitration Law and excludes personal status disputes and matters in which conciliation is not permitted.
مع عدم الإخلال بأحكام الشريعة الإسلامية وأحكام الاتفاقيات الدولية التي تكون المملكة طرفاً فيها ؛ تسري أحكام هذا النظام على كل تحكيم، أياً كانت طبيعة العلاقة الن
- Article 4
The article allows the parties, where they may choose a procedure, to authorize others, such as an individual or an arbitration center, to choose it.
في الأحوال التي يجيز فيها هذا النظام لطرفي التحكيم اختيار الإجراء الواجب الاتباع في مسألة معينة، فإن ذلك يضمن حقهما في الترخيص للغير في اختيار هذا الإجراء، ويعد
- Article 5
The article requires applying the provisions of any document, such as a model contract or international agreement, to which the parties agree to subject their relationship, so long as it does not contravene Islamic Sharia.
إذا اتفق طرفا التحكيم على إخضاع العلاقة بينهما لأحكام أي وثيقة (عقد نموذجي، أو اتفاقية دولية أو غيرهما)، وجب العمل بأحكام هذه الوثيقة بما تشمله من أحكام خاصة با
- Article 6
The article regulates how notices between the parties to arbitration are delivered when they have no special agreement, and excludes judicial notices concerning annulment of an arbitral award.
1 - إذا لم يكن هناك اتفاق خاص بين طرفي التحكيم في شأن الإبلاغات فيتم تسليم الإبلاغ إلى المرسل إليه شخصيًّا - أو من ينوب عنه - أو إرساله إلى عنوانه البريدي المحد
- Article 7
The article treats a party's continuing with arbitration while aware of a violation, without objecting within the agreed time or within 30 days, as a waiver of his right to object.
إذا استمر أحد طرفي التحكيم في إجراءات التحكيم ـ مع علمه بوقوع مخالفة لحكم من أحكام هذا النظام مما يجوز الاتفاق على مخالفته أو لشرط في اتفاق التحكيم ـ ولم يقدم ا
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.