LEGAL SUPPORT

Saudi Arabia 2020 | ECONOMY | B2B

Local law firms and government entities are working around the clock to enhance the business environment and legal landscape, one of the major focuses of Vision 2030.

Hamed Merah
HAMED MERAH
CEO
Saudi Center for Commercial Arbitration (SCCA)
Khalid Nassar
KHALID NASSAR
Managing Partner
Khalid Nassar & Partners (KN&P)

How has the role of the SCCA evolved over time?

HAMED MERAH SCCA was established as the official representative of Saudi Arabia internationally and within the Kingdom in all matters related to the enhancement and development of local and international arbitration of commercial disputes. Today, two-thirds of our panel of mediators and arbitrators are non-Saudis, hailing from 23 countries around the world, with expertise in 15 specialized areas of our increasingly diverse economy. The international benchmark for a new center to secure its first case is between five and 10 years, but notably, SCCA was able to register a number of cases in the first 18 months, with some of these claims exceeding USD100 million. Parties are just as comfortable working with SCCA and arbitrating in Saudi Arabia as they are in jurisdictions around the world.

How does KN&P fit into the legal landscape of Saudi Arabia, and what are your key areas of focus?

KHALID NASSAR The idea of starting KN&P was based on two elements: supporting the movement of younger generations in leadership positions and filling in the gap caused by the recent economic situation, where major companies are cutting costs. I sought to create a Saudi firm able to compete with international firms both in terms of quality and fees. Saudi businesspeople are becoming more accustomed to lawyers, but these are often from international law firms—they lack the local know-how, which is where KN&P makes a difference. KN&P focuses on the corporate sector including but not limited to transactions, advisory, restructuring, and capital market, as well providing our clients with litigation/arbitration services related to commercial disputes.

What added value does a flexible arbitration center bring to foreign investors?

HM Arbitration and ADR are, in general, the best ways to manage and resolve disputes that arise among individuals and/or commercial entities that value efficiency and fairness. One of the initiatives promoted by Vision 2030 is the localization of institutional arbitration to enhance the business environment and attract further investment. Increasing and broadening awareness on the legal side continues to drive many of our activities. We have conducted a series of roadshows and industry seminars in the UK, US, KSA, and UAE, and we are delighted that companies have been naming SCCA as the institutional ADR provider in their dispute resolution clauses.

What is your assessment on the current framework around joint ventures?

KN There are some restricted practices by the government where one must have a local Saudi partner; for example, if they seek to acquire EPC licenses, a local partner with an engineering license must represent a minimum 25%. For trading licenses, the minimum required capital is SAR26 million, whereas the foreign ceiling for ownership is 75%. At present, however, they are making exceptions for companies such as Apple and Amazon.

What is the center's approach with regards to SMEs?

HM We provide arbitration and mediation solutions for cases and companies of any size. We have an expedited procedure for disputes of less than SAR4 million, a process which takes less time and costs less, benefiting especially SMEs. Moreover, we have online dispute resolution, which offers lower costs, faster processing times, and more efficient interaction, allowing us to assign arbitrators within 24 hours and have decisions issued within 15 days in emergency situations.

What have been the major developments aimed at enhancing Saudi Arabia's legal landscape?

KN In recent years, the new company law was issued to ensure individuals would be protected in case their establishment experiences financial troubles. Another major step was the implementation of the new Bankruptcy Law. The Ministry of Justice has made extensive improvements to favor the investment climate. All these elements have made a huge difference in the Saudi legal system, and as a result, foreign investors are showing interest in the country.