Arbitration in Administrative Contracts and Saudi Government

Abstract

The International Administrative Contracts are spreading widely in recent days due to globalization and proliferation of public private partnerships that includes unexceptional conditions, which are unfamiliar in the private law. Such contracts or agreements are concluded between different governments and persons or foreign persons and generally these contracts are related to the private law by default. It has been also noticed that whenever there’s a dispute in the court of arbitration, administrative contracts try to step into the administrative law instead of the dispute or conflict. This happens in spite of the fact that the contract that is in dispute is an international administrative contract. However, in administrative contracts, problems arise with Saudi Arbitration Code (SAC) because in most cases, Sharia law is given prominence if any disputes arise between SAC and Sharia law. Further, under Saudi law, in administrative arbitration contracts with governmental organizations, there is requirement of consent from the King or the consent of minister’s council. Although, the intent of the Saudi Arabian government has been to reform the law of arbitration and allow more freedom to the contracting parties to choose the seat and law of arbitration, but in case of administrative contracts, there still remain much of government upper-hand.