Transformation of KSA’s arbitration system set to help boost investment

Transformation of KSA’s arbitration system set to help boost investment
The Royal Commission for Riyadh City has set a target to attract up to 500 foreign companies to set up their regional headquarters in the capital. (Shutterstock)
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Updated 09 June 2021

Transformation of KSA’s arbitration system set to help boost investment

Transformation of KSA’s arbitration system set to help boost investment
  • Arbitration is the preferred method for dispute resolution for investors

JEDDAH: The commercial arbitration process in Saudi Arabia has undergone a full transformation in recent years, with advances likely to help increase foreign direct investment, as the government aims to attract hundreds of international organizations to set up regional headquarters in the Kingdom, a legal expert told Arab News.

According to a study by the Saudi Center for Commercial Arbitration (SCCA), the Kingdom’s commercial alternative dispute resolution (ADR) ecosystem has changed a lot in the last decade, improving how businesses operate and access justice in the country.

ADR is any means of settling commercial disputes, where negotiation has failed, without going to court. It includes options such as mediation, arbitration and conciliation. ADR is also seen as a quick and cost-efficient resolution of disputes.

“Arbitration is the preferred method for dispute resolution for investors, and resorting to arbitration will definitely attract more foreign and local investments and investors,” Dr. Osama Ghanem Al- Obaidy, adviser and professor of law at the Institute of Public Administration in Riyadh, told Arab News.

The SCCA uses best international practices and follows the uniform arbitration rules of the UN Commission on International Trade Law, which are trusted by international companies.

Dr. Osama Ghanem Al-Obaidy Adviser and professor of law at the Institute of Public Administration in Riyadh

The professor highlighted the effects of the coronavirus disease pandemic on arbitration, pointing out that the center conducted hearings remotely and online, so that the travel restrictions during the pandemic did not slow down the process.

“The center also continued to fully operate during the pandemic and continued to provide its services and products (to) businesses, as well as nominations and selection of qualified arbitrators and experts (and) ensuring the integrity, transparency of proceedings and arbitrators,” he said.

SCCA’s efforts will also contribute to the success of Crown Prince Mohammed bin Salman’s ambitious Riyadh Strategy 2030, which was announced in January. The Royal Commission for Riyadh City has set a target to attract up to 500 foreign companies to set up their regional headquarters in the capital over the next 10 years, and the legal ecosystem in a country is often a key factor when companies are making decisions on where to locate.

“The center uses best international practices and follows the uniform arbitration rules of the UN Commission on International Travbde Law (UNCITRAL), which are trusted by international companies.

The list of center arbitrators and experts also covers all fields needed to resolve disputes. As well as the freedom granted to companies to select the governing law and to select the arbitrators as well as choosing the language, time and venue for arbitration,” Al-Obaidy said.

He also highlighted another positive development: The appointment of female arbitrators for the first time in the Kingdom. “Two female arbitrators were appointed, one in Dammam and one in the Makkah region by the appeals administrative court, which is a step in the right direction toward appointing women judges in the near future in the court system,” he said.


Saudi GDP shrinks by 3 percent in Q1 as oil sector contracts

Saudi GDP shrinks by 3 percent in Q1 as oil sector contracts
Updated 14 June 2021

Saudi GDP shrinks by 3 percent in Q1 as oil sector contracts

Saudi GDP shrinks by 3 percent in Q1 as oil sector contracts
  • The main reason for the drop was the 11.7 percent contraction in the oil sector, the General Authority for Statistics

RIYADH: Saudi Arabia’s gross domestic product (GDP) fell by 3 percent in the first quarter compared to a year earlier, according to official data.
The main reason for the drop was the 11.7 percent contraction in the oil sector, the General Authority for Statistics, said in a report on Monday.
However the non-oil sector recorded a positive growth rate of 2.9 percent while the private sector expanded by 4.4 percent.
A weak oil output had hurt Gulf economies even before the arrival of the pandemic a year ago as reduced hydrocarbon revenues made it more difficult for governments to balance their budgets and fund major infrastructure projects.
The new data reveals that Saudi GDP per capita stood at SR19,895 in the first quarter, down by 0.43 percent from the same quarter of the previous year, but up 0.44 percent on the previous quarter.
Despite the contraction of the economy, international trade continued its strong recovery in the first quarter with imports of goods and services growing by 9.1 percent compared to 11.3 percent growth in the previous quarter. Exports increased by 1.9 percent compared to 3.6 percent growth in the previous quarter.
Private final consumption expenditure grew 6.6 percent compared to growth of 1.5 percent in the previous quarter.


The Emirati oil deal that has infuriated Israeli environmentalists

The Emirati oil deal that has infuriated Israeli environmentalists
Updated 14 June 2021

The Emirati oil deal that has infuriated Israeli environmentalists

The Emirati oil deal that has infuriated Israeli environmentalists
  • The pipeline was first set up as a joint venture between Israel and Iran in 1968 when the two countries were friendly. That partnership collapsed after the 1979 revolution that brought the ayatollahs to power

JERUSALEM: The first cargo ships from Dubai that docked last year in the Mediterranean port of Haifa were met by celebration in Israel. Flags waved. Reporters gathered. The prime minister walked the pier and gave a speech about the fruits of making peace.
There was zero fanfare, however, when oil tankers began arriving at the smaller Israeli port of Eilat on the Red Sea in an arrangement with Emirati partners. Rather than washing machines and cleaning supplies for consumers, the ships unloaded oil to be transferred through a pipeline across Israel to the Mediterranean.
The companies involved say this land bridge is the shortest, most efficient and cost-effective route to transport oil from the Gulf to the West. But the risks to the environment are far too great, say their opponents who are hoping to end the deal.
About a month after Israel normalized ties with the United Arab Emirates last September, Israel’s state-owned Europe-Asia Pipeline Company (EAPC) announced the new collaboration.
The deal was signed in Abu Dhabi with MED-RED Land Bridge, a company with Emirati and Israeli owners. In attendance was then-US Treasury Secretary Steven Mnuchin.
EAPC’s roots are in the Arabian Gulf. It was first set up as a joint venture between Israel and Iran in 1968 when the two countries were friendly. That partnership collapsed after the 1979 revolution that brought the ayatollahs to power.
The Israeli pipeline still operates in both directions but well below capacity in recent years, energy experts say. With the UAE stepping into the role once held by Iran, EAPC hopes to increase quantities by “tens of millions of tons per year.”
The influx of ships set to dock alongside the fragile coral reefs in Eilat and the large amounts of oil to pass through Israel have outraged the country’s biggest environmental advocates.
Fresh in their minds is an offshore oil spill in February that blackened much of Israel’s Mediterranean coast with tar. And in 2014, one of EAPC’s own pipelines ruptured, spilling 5 million liters of crude oil into a desert nature reserve.
“Most of the details (of the deal) are confidential by law. We know just a little bit, but the little bit makes us very anxious,” said Noa Yayon, head of the legal department at the Society for the Protection of Nature.
Eilat’s coral reef is unique in that it has proved to be more resilient to climate change, when many reefs around the globe are dying. It is also a big tourism draw.
But its proximity to the port means that even the smallest leak from one tankers would cause big, possibly irreversible, damage, Yayon said.
“We are of course very happy with the current geopolitical status with the Arab countries in our area, but we don’t think that it has to come with the super-specific risks to our environment,” she said. “We think that we better promote business with these countries based on clean energy and not oil.”
Minister of Environmental Protection Gila Gamliel last Tuesday sent a letter to Israel’s national security adviser saying “the warning lights are already flashing” and demanded the deal be scrapped.
Too much was decided behind closed doors and remains secret, she said.
EAPC has not made public details of the deal.
“From a rate of six tankers a year, we expect an increase to more than 50 tankers a year docking in Eilat,” Gamliel wrote. “The continuation of this deal will be a tragedy for generations, whether from mishaps that may occur or in a wartime scenario.”
Gamliel is being replaced with the swearing in of the country’s new government, and her successor on Monday called the deal a mistake and said the government should oppose it.
EAPC said the new business is part of its routine operations and that it meets the strictest international standards. Plus, the broader geopolitical gains cannot be ignored.
“Israel is expected to benefit greatly from the agreement, which will strengthen the Israeli economy and its international standing, as well as ensure its energy independence and security,” the company said in a statement.
The Society for the Protection of Nature together with other groups have petitioned Israel’s Supreme Court for a temporary order to freeze the deal. Yayon said the state is due to present its official position in coming days.
The Finance Ministry, which oversees EAPC, declined to comment due to the open court case.
A representative of UAE’s National Holding, which owns Petromal, one of the owners of MED-RED Land Bridge, had no immediate comment on the issue.


Dubai’s Shuaa to launch digital wealth platform

Dubai’s Shuaa to launch digital wealth platform
Updated 14 June 2021

Dubai’s Shuaa to launch digital wealth platform

Dubai’s Shuaa to launch digital wealth platform
  • Ex-Visa and Google executive Hadi Raad will lead the company’s digital transformation

DUBAI: Dubai asset management firm Shuaa Capital has appointed a chief digital officer in preparation for the launch of a new digital wealth platform.
Ex-Visa and Google executive Hadi Raad will lead the company’s digital transformation, developing its fintech to utilize artificial intelligence and machine learning.
Drawing from a study by Knight Frank, the Dubai-based company said it wants to target the millennial investor segment which is perceived to be under-served.
“Our intention to launch a new digital wealth platform is in line with our increasing focus on technology, which, as we have previously indicated, will be one of Shuaa’s top priorities going forward,” Group CEO Jassim Alseddiqi said.
The new chief digital officer will drive the company’s product innovation and development, as well as create fintech partnerships.


US father-son duo admit helping ex-Nissan chief Ghosn flee Japan

US father-son duo admit helping ex-Nissan chief Ghosn flee Japan
Updated 14 June 2021

US father-son duo admit helping ex-Nissan chief Ghosn flee Japan

US father-son duo admit helping ex-Nissan chief Ghosn flee Japan
  • Ghosn was out on bail while awaiting trial on four counts of financial misconduct, which he denies, when he managed to slip past authorities onto a private jet, transit in Turkey and land in Lebanon

TOKYO: An American father-son duo admitted their role in orchestrating former Nissan chief Carlos Ghosn’s audacious escape from Japan as they made their first appearance before a Tokyo court on Monday.
Former special forces operative Michael Taylor, 60, and his 28-year-old son Peter were extradited by US authorities over claims they smuggled Ghosn out of the country in a music equipment case as he awaited trial.
At the Tokyo district court, the pair said they did not contest the facts laid out by prosecutors in an indictment, effectively conceding their role in the saga.
“Is there any mistake in what the prosecutor just read?” the judge asked each man in turn. Both replied no.
Michael Taylor was led in first to the courtroom, with his hands cuffed in front of him. He wore plastic slippers, dark trousers and a white shirt with no tie.
His son was brought in after, with both men wearing facemasks.
The pair face up to three years in prison if convicted of helping Ghosn — currently an international fugitive living in Lebanon, which has no extradition treaty with Japan.
Ghosn was out on bail while awaiting trial on four counts of financial misconduct, which he denies, when he managed to slip past authorities onto a private jet, transit in Turkey and land in Lebanon.
On Monday, prosecutors laid out again the almost cinematic details of the December 2019 escape, including that the Taylors hid Ghosn in a case to slip him past security at an airport.
“You helped him escape,” he said to the two men, who listened to proceedings through a translation earpiece.
Ghosn’s flight was hugely embarrassing for Japanese authorities, with US prosecutors calling it “one of the most brazen and well-orchestrated escape acts in recent history.”
The Taylors fought their extradition to Tokyo, claiming they could face torture-like conditions, and have not commented on their case since arriving in early March.
Local prosecutors declined to comment on their arraignment before the trial, but Japanese media said both men admitted wrongdoing during questioning.
Public broadcaster NHK has said Peter received 144 million yen ($1.3 million) from the Ghosns for their help.
The Asahi Shimbun daily said the pair spent most of the money on preparations for the escape, including the costs of chartering a private jet, claiming that they were not paid for their help.
Ghosn remains at large in Lebanon, where he was questioned last month by French investigators over a series of alleged financial improprieties.
Among the allegations are improper financial interactions with Renault-Nissan’s distributor in Oman, payments by a Dutch subsidiary to consultants and lavish parties organized at the Palace of Versailles.
The questioning took place with his defense team and a Lebanese prosecutor present. Ghosn was heard as a witness as he would need to be in France to be formally indicted.
Others involved in the Ghosn case have faced legal proceedings, including his former aide at Nissan, Greg Kelly, who is also on trial in Tokyo for his alleged role in underreporting the tycoon’s income.
And a Turkish court has sentenced two pilots and another employee of a small private airline to four years and two months in prison for their role in Ghosn’s escape.
Ghosn switched planes in Turkey on his way to Lebanon, and the three Turks were charged with involvement in a conspiracy to smuggle a migrant.
A Lebanese national still at large is also suspected of orchestrating Ghosn’s escape from Japan.


Riyadh hotel rates highest in three months

Riyadh hotel rates highest in three months
Updated 14 June 2021

Riyadh hotel rates highest in three months

Riyadh hotel rates highest in three months
  • Occupancy stood at 42.8 percent while the average daily rate was SR544.31 ($145)

DUBAI: Riyadh’s hotel industry reported its highest room rates in three months, according to preliminary May 2021 data from STR.
Occupancy stood at 42.8 percent while the average daily rate was SR544.31 ($145), the research company said on Monday.
Revenue per available room, a key industry metric known as RevPAR, was SR332.85.
“Each of the three key performance metrics were up from April, but despite the month-over-month increase, occupancy and RevPAR came in lower than earlier pandemic-affected months,” STR said. “Year-over-year percentage increases are substantial because of the comparison with the months most affected by the pandemic in 2020.”
The Kingdom had only just started to open up to international tourists when the pandemic closed hotels and resorts.
The recent easing of travel restrictions and the return of international flights has lifted prospects for the sector.