At GTR KSA, we took part of a panel discussing the recent developments in KSA, and the fast evolution of The Kingdom’s risk profile.
The pace at which The Kingdom is overhauling its legal systems is impressive. Like a sports car rocketing towards Vision 2030, Saudi Arabia went from 0-100 in a flash.
The modernization of the legal system has not stopped at the introduction of technologies to facilitate court hearings, exchanging court documents, and enforcement of verdicts, it went beyond that by successfully updating existing regulations and introduced new ones to efficiently and quickly resolve commercial disputes. In short, “The Saudi Arabia of today is nothing like the Saudi Arabia of five years ago” as we said on the GTR KSA panel.
We are already reaping the benefits of these newly introduced technologies and regulations. In our Riyadh office, we have seen – first hand – a significant shortening of the duration of commercial litigation; in most recent cases we were able to get verdicts within 90 days from filing the claim in court!
Other than the impressive speed of Saudi Commercial Courts and technologies currently used, the most important developments we are watching closely are the support of mediation as an alternative to dispute resolution, and the regulations concerning security and collateralization; the combined effect of these developments is a game changer for remediation and recovery of receivables.
The Saudi legislator demonstrated The Kingdom’s commitment to support mediated settlement by setting up a domestic framework to ratify and enforce mediated settlements, as well as being among the first to ratify the Singapore Convention [FULL NAME HERE]. The current mediation framework allows amicable restructuring agreements to be directly enforceable if debtors do not honour the agreed terms; ultimately saving creditors significant time and costs to enforce their rights.
Developments in the security and collateralization regulations now allow for a very wide array of asset types to be used as collateral to secure credit. The availability of a public collateral registry further adds to the certainty and reliability of the framework. The regulations allow for ample flexibility in choosing the type of security agreement; including the allusive retention of title (which was previously not available under Saudi laws and regulations).
The combined effect of the mediation regulations as well as those for the security and collateralization means that mediated settlements can be concluded and secured by registered collateral. If the debtor does not honour the agreed terms, acceleration and enforcement against the collateral can be done very quickly and with minimal costs.
We have already started applying the aforementioned regulations to successfully ratify mediated and register collateral to secure our clients’ exposures; ultimately improving the chances of recovery and reducing the risk of loss given defaults.
Our local presence in Riyadh not only supports companies exporting to Saudi buyers but is available to support Saudi exporters trading with companies in The Middle East, North Africa as well as Asia Pacific. Through our network of offices, we can now support Saudi exporters to recover their trade receivables from any of the markets where we are present. In addition to the efficiency, responsiveness, and reliability that RA is known for, Saudi exporters have direct access to our Riyadh office to meet us and discuss their cases face-to-face.
We are very excited by the impressive developments taking place in Saudi Arabia and are very proud to be taking part in these advancements through our Riyadh office.
We look forward to assisting you with recovering your trade receivables. For inquiries, please contact us on [email protected]
