Making formalities less complex
Pre-dispute formalities and preparation work have been an added layer of logistical hurdle creditors have had to overcome when undertaking legal action against a debtor.
However, we believe that that will soon be significantly reduced in the Kingdom, with the Apostille Convention coming into effect on 7 December 2022. With the convention coming into force, we should observe that time and costs required to commence judicial recoveries (litigation/arbitration) to shorten and taper down.
For instance, as of the convention’s effective date, powers of attorney issued by exporters, financiers, and lenders appointing RA to represent them in litigations/arbitrations in the Kingdom no longer need to be super-legalised by the Saudi Consulate in the issuer’s country. This should translate not only into dollar and cent savings, legwork required to prepare a file for escalation would be simpler, too.
The Apostille Convention, or the Hague Convention of 5 October 1961 Abolishing the Requirement of legalisation for Foreign Public Documents, is a multilateral treaty that seeks to ease the formalities required for foreign mutual recognition of public documents.
When in force, public documents originating from a contracting state of the Apostille Convention and seeking to be recognised in another contracting state of the Apostille Convention need not be legalised.
Concluding remarks
Despite the easing of documentary preparation work required prior to commencing legal action in the Kingdom of Saudi Arabia, Recovery Advisers continue to advocate mediatory efforts as the resolution method creditors should first consider.
This is because commercial sensibility has always been at the core of our work.
Judicial recoveries, although a viable option in most scenarios, should be a measure of last resort because mediation would almost always be the more cost-effective recovery strategy.
Moreover, given the adversarial nature of judicial recoveries, if avoidable, why risk the further deterioration of a commercial relationship that is strained by defaults.
Support from Recovery Advisers in Saudi Arabia
Recovery Advisers has extensive experience in the Kingdom of Saudi Arabia, enabling the company to effectively and promptly support ECAs, exporters and financial institutions with exposure in the Kingdom.
The Saudi office, which provides services in claims and recovery management, aged receivables management, and international commercial dispute resolution, is led by Mr. Abdullah Alghusn who has more than 8 years of experience in practice.
Contact us to discuss how we can support your business in Saudi Arabia, and worldwide.
