Companies in dispute stand to gain from the shared views of Qatar and Saudi Arabia on the advantages of commercial mediation, according to the general counsel of Qatar International Centre for Conciliation and Arbitration (QICCA) in a paper titled ‘Saudi Arabia and Qatar: Converging Views on Commercial Mediation’.
Dr Minas Khatchadourian said, “The converging views of Qatar and Saudi Arabia on the benefits of commercial mediation are of great importance, particularly where the parties have their place of business in different states or the parties’ place of business is different from the state in which a substantial part of the obligations under the settlement agreement is performed or with which the subject matter of the settlement agreement is most closely related.”
“The prominence of mediation in the Kingdom of Saudi Arabia is expected to be bolstered significantly by the recently enacted Commercial Courts Law (Royal Decree No M/93 issued on 15 Sha’ban 1441 corresponding to April 15, 2020) and by the expected Qatari law establishing the ‘investment and trade court’, as well as a new Mediation Law to support the means of alternative dispute resolution,” Khatchadourian explained.
He said Qatar and Saudi Arabia were among the 52 countries that signed the most recent convention prepared by the UN Commission on International Trade Law (UNCITRAL) on cross-border mediation (Singapore Convention on Mediation).
Furthermore, Khatchadourian said Qatar and Saudi Arabia have both ratified the Singapore Convention on Mediation, as a very interesting step towards the use of mediation when dealing with the resolution of cross-border commercial disputes, “addressing a problem whereby mediation was repeatedly turned down as an alternative dispute resolution option because a settlement might not be readily enforceable in a different jurisdiction.”
“Qatar’s ratification triggered a six-month countdown to the convention application, which came into force in September 2020 for the first three countries that ratified it – Singapore, Fiji, and Qatar. Saudi Arabia’s ratification followed on May 5, 2020 and the convention entered into force there on November 5, 2020.
“In accordance with Article 14 (1) of the Singapore Convention on Mediation, the contracting states agreed that the convention would enter into force six months after the deposit of the third instrument of ratification, acceptance, approval, or accession,” he said.
Khatchadourian said mediation is an “efficient” and “attractive” means to resolve disputes, particularly as it can allow parties to preserve commercial relationships. It can avoid all unnecessary costs, delays, and time management associated with more formal methods of dispute resolution, such as litigation and arbitration, he said.
“Therefore, Saudi Arabia and Qatar are considered jurisdictions where any entity or person may request from its competent courts, the enforcement of an international mediation settlement agreement falling within the scope of application of the Singapore Convention (Article 1),” he said.
Khatchadourian said in many Mena-GCC jurisdictions, an attempt to resolve a dispute amicably “is becoming an essential tactical ingredient” in any overall dispute resolution strategy “with failure to do so adversely often affecting cost awards.”
“Even without the Singapore Convention on Mediation, it is open to parties who have an existing arbitration agreement contained in their commercial agreements to resort to mediation as a pre-arbitration or pre-litigation step,” he said.