Focus on: Enforcement of Foreign Judgments and Arbitral Awards in Saudi Arabia: A Legal and Practical Guide

1. Introduction

Saudi Arabia has undergone significant legal reforms to enhance its dispute resolution mechanisms, making the Kingdom more accessible for international businesses seeking to enforce foreign judgments and arbitral awards. The enforcement of foreign awards has become far more streamlined in recent years, reflecting the country’s commitment to legal modernization and judicial efficiency.

One of the most significant recent developments in this regard is the introduction of the Administrative Enforcement Law (Royal Decree No. M/15 of 1443H) dated 27/1/1443H, corresponding to 4 September 2021. This law simplifies the process of enforcing judgments against administrative entities, ensuring a clearer and more structured pathway for enforcement.

Previously, enforcing a judgment against a government entity was an uncertain process, as there was no legislative framework in place for doing so, creating challenges for businesses seeking to recover debts or enforce contractual rights against public bodies. With the introduction of the Administrative Enforcement Law, there is now a dedicated enforcement mechanism that allows private entities to seek enforcement against government bodies through the Board of Grievances. This reduces bureaucratic hurdles and ensures compliance with final judgments, providing a much-needed procedural structure for enforcement against administrative authorities.

In addition to simplifying enforcement against government bodies, the Administrative Enforcement Law also provides a structured approach for administrative entities seeking to enforce judgments against private sector parties. By establishing clear procedures and timeframes for compliance, the law enhances both transparency and predictability in administrative enforcement, aligning Saudi Arabia with global best practices. This marks a significant milestone in the Kingdom’s ongoing legal modernization efforts under Vision 2030, further strengthening its attractiveness as a destination for international investment and business operations.

This article explores the legal framework, enforcement procedures, common obstacles, and strategic considerations for parties seeking enforcement in Saudi Arabia.

 

2. Legal Framework for Enforcement

The enforcement of foreign judgments and arbitral awards in Saudi Arabia is primarily governed by several key legislative instruments. The Enforcement Law (Royal Decree No. M/53 of 1433H) establishes the procedural framework for enforcement, covering foreign judgments and arbitral awards. The Administrative Enforcement Law (Royal Decree No. M/15 of 1443H) specifically governs enforcement in cases involving administrative entities. Additionally, the Implementing Regulations issued under these laws provide further procedural details, ensuring consistency and clarity in the enforcement process. The enforcement landscape is also shaped by international treaties and conventions that Saudi Arabia has ratified, which facilitate the recognition and enforcement of foreign judgments and arbitral awards.

Saudi Arabia is a signatory to several bilateral and multilateral agreements that facilitate the recognition and enforcement of foreign judgments and arbitral awards. These include the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which Saudi Arabia ratified with a reciprocity reservation. The Kingdom is also a party to the 1966 ICSID Convention, which applies to investment disputes, the 1983 Riyadh Arab Agreement for Judicial Cooperation (the Riyadh Convention), covering enforcement among Arab League member states, and the 1996 GCC Convention for the Execution of Judgments (the GCC Convention) applicable within Gulf Cooperation Council countries. These treaties play a crucial role in streamlining enforcement processes by reducing procedural barriers and ensuring foreign judgments are treated in accordance with established international norms.

 

3. Jurisdiction of Saudi Courts

Foreign judgments in Saudi Arabia are enforced through the Enforcement Courts, except for administrative matters, which fall under the jurisdiction of the Board of Grievances. A foreign judgment must meet specific criteria to be enforced in Saudi Arabia, as outlined in Article 11 of the Enforcement Law. The judgment must be final and binding under the laws of the issuing jurisdiction, and there must be reciprocity between Saudi Arabia and the issuing country.

Further, the foreign court must have had proper jurisdiction over the case, and the defendant must have been duly notified and represented in the foreign proceedings. Additionally, the judgment must not conflict with Saudi public order or Sharia principles, nor with any prior Saudi court decision on the same matter.

Certain types of judgments are not enforceable in Saudi Arabia. These include judgments relating to Saudi real estate (in rem disputes), judgments that involve interest (riba), which is prohibited under Islamic law, and criminal and administrative judgments unless covered by international agreements.

 

4. Enforcement of Foreign Arbitral Awards and Judgments

The enforcement of foreign arbitral awards and judgments is dependent on compliance with the requirements under the Enforcement Law. The first condition that must be met is for there to be reciprocity in enforcement between Saudi Arabia and the jurisdiction in which the foreign judgment or arbitral award was issued. Saudi Arabia enforces arbitral awards under the New York Convention and other relevant treaties. For foreign court judgments, the number of jurisdictions in which there is a treaty of reciprocity with Saudi Arabia is more limited, predominantly being the Gulf and Arab States that are party to the Riyadh Convention and the GCC Convention.

If reciprocity is established, further requirements that must be verified by the Enforcement Court, as outlined in Article 11 of the Enforcement Law, include:

1. Finality and Binding Nature – The judgment must be final and binding in the jurisdiction where it was issued.
2. Jurisdiction – The issuing court must have had proper jurisdiction over the case, and the subject-matter of the dispute must not be under the exclusive jurisdiction of the Saudi courts.
3. Due Process – The defendant must have been duly notified and had the opportunity to present their defense in the foreign proceedings.
4. Public Order Considerations – The judgment must not contradict Saudi public order (meaning Sharia principles)
5. Non-Contradiction – The judgment must not contradict a prior Saudi judgment on the same dispute.

These safeguards ensure procedural fairness while maintaining the integrity of Saudi Arabia’s legal framework.

If the award satisfies all legal requirements, the judge issues an enforcement order under Article 34 of the Enforcement Law. If the debtor fails to comply, execution against assets follows promptly.

 

5. Practical Process for Enforcement

Enforcement applications at the Enforcement Court must be submitted via Najiz, the Ministry of Justice’s online portal. Required documents include a certified copy of the judgment or award, proof of finality and due process, and Arabic translations by an accredited translator. Once the Enforcement Court verifies that the requirements of article 11 of the Enforcement Law are satisfied, the debtor is notified of the enforcement application and is given five days to voluntarily comply. If the debtor does not comply, the Enforcement Court will take steps to withdraw funds from the debtor’s account and seize assets in order to settle the amount due, and may impose sanctions such as travel bans on the debtor.

Enforcement measures include freezing of bank accounts, seizure of property and assets, public auctions for asset liquidation, and direct payment orders. Each of these steps must be followed precisely, as failure to adhere to formalities can result in delays or rejections.

The debtor is entitled to file an enforcement dispute during the enforcement process, to object to the enforcement for procedural or substantive reasons.

For enforcement against government entities, the Administrative Enforcement Law provides a dedicated pathway through the Board of Grievances, ensuring a streamlined process with specific procedural steps.

 

6. Administrative Enforcement

(a) Enforcing Against Government Entities

Historically, enforcing a judgment against a government entity was challenging due to the lack of a clear legislative framework. The new Administrative Enforcement Law addresses this issue by introducing explicit enforcement procedures.

The law empowers the courts to:

• Issue warnings to government entities to implement enforcement instruments.
• Order the government entity to comply with the enforcement instrument.
• Notify the Ministry of Finance if it is responsible for any delay in enforcement.
• Impose penalties of up to SAR 10,000 per day for non-implementation, except for debts.
• Impose criminal penalties, such as fines or imprisonment, on government employees who obstruct enforcement.

By creating a structured and enforceable mechanism, the law ensures compliance and reduces risks for private entities engaging in contracts or disputes with government bodies.

(b) Enforcement by Government Entities

The new law also clarifies how administrative entities can enforce their rights against private sector parties. Government entities can now enforce:

• Final court judgments issued by the Administrative Courts or any court where the government is a party.
• Arbitration awards where the government entity is a party.
• Contracts involving a government entity.
• Certified documents issued by a government entity.
• Negotiable instruments in which the government is a party.

This structured approach enhances predictability and fairness in administrative enforcement, aligning Saudi Arabia with international best practices.

 

7. Speed of Enforcement

Recent trends indicate a marked acceleration in the speed of enforcement proceedings. The introduction of digital case management systems and procedural reforms has significantly reduced processing times for enforcement applications. In urgent matters, the courts have demonstrated an ability to resolve disputes within a matter of days.

For instance, in a recent case, Z&Co. successfully intervened to prevent the wrongful enforcement of a fraudulent promissory note. The Enforcement Court swiftly assessed the dispute, held hearings, and issued an order rejecting the claim and returning the withdrawn funds within ten days. This rapid resolution highlights the increasing efficiency of enforcement courts in handling urgent matters, particularly in cases involving fraud or immediate financial risk.

The growing efficiency of enforcement proceedings is further supported by:

Enhanced judicial training and specialization in enforcement matters.

Strengthened coordination between the Ministry of Justice and enforcement authorities.

Increased use of real-time electronic communication between courts and relevant government entities.

These developments are positioning Saudi Arabia as a jurisdiction where enforcement proceedings are not only more predictable but also significantly faster than in the past, making the Kingdom increasingly attractive for international businesses and investors.

 

8. Common Challenges and Defenses

One of the main challenges in enforcing foreign judgments in Saudi Arabia is the reciprocity requirement. Saudi courts require proof that Saudi judgments would be enforced in the foreign jurisdiction. If no treaty exists between Saudi Arabia and the issuing country, applicants may need to provide expert opinions or foreign legal confirmations to demonstrate reciprocity.

Public order objections present another challenge. Saudi courts may refuse enforcement if a judgment contradicts Islamic law. Usurious interest, penalties, and certain contractual clauses may be deemed unenforceable. Procedural defenses may also be raised by defendants, who may argue lack of jurisdiction or improper service of process. They may also claim prior payment or settlement of the judgment debt. To mitigate these risks, foreign parties should conduct thorough due diligence to ensure compliance with all enforceability conditions before initiating proceedings.

 

9. Trends and Future Developments

Saudi Arabia is undergoing significant legal transformations to enhance its dispute resolution mechanisms. Several upcoming reforms are expected to further streamline enforcement procedures and improve efficiency. A new Enforcement Law is anticipated to introduce further procedural clarity, while digital transformation initiatives will make court processes faster and more accessible. Increasing judicial training will ensure consistent enforcement of foreign judgments, and greater transparency and investor protections will strengthen Saudi Arabia’s position as a pro-business jurisdiction.

 

10. Conclusion

The enforcement of foreign judgments and arbitral awards in Saudi Arabia has significantly improved, driven by legal reforms, judicial modernization, and international cooperation. However, challenges such as reciprocity, public order considerations, and procedural hurdles remain. By understanding the legal framework, anticipating potential obstacles, and adopting best practices, businesses and legal practitioners can navigate the Saudi enforcement landscape effectively and secure successful outcomes.