Sustainability and Challenges of Arbitration in Administrative Contracts: the Concept and Approach in Saudi and Comparative Law

Abstract

Background. The arbitrability of administrative contracts contributes to sustainable dispute resolution within the United Nations’ Sustainable Development Goals 16 (SDG 16). However, different regulation of administrative contracts in comparative law affects the arbitrability of the disputes arising out of them. The question arises – is protection deserved if an administrative contract containing an arbitration clause concluded in violation of the administrative law of the governmental body or without a special approval is invalid, unenforceable, or if the company was unaware of such a requirement? This paper analyses the concept of an administrative contract and its arbitrability in Saudi Arabia and comparative law to provide for sustainable solutions. Methods. The analysis of the applicable arbitration and administrative laws and rules is conducted with the normative method to establish the arbitrability of the disputes arising out of administrative contracts and the concept of the administrative contract. The case analysis reveals if the legislative approach causes difficulties in practice. The dogmatic method is applied to link the reasons for legislative and case law development to the current normative solutions in comparative and Saudi law. The conclusions on the existing problems and possible solutions shall be based on the analytical method. Results and Conclusions. Government contracts are of great importance and their exclusion from arbitration contradicts the set goal of sustainable dispute resolution mechanism. Differences in comparative law in terms of the notion of the administrative contract and the arbitrability may diminish the positive effects of arbitration in administrative contracts, as they may endanger equal access to dispute resolution as part of the sustainable development goals, be enforceable, or even cause discrepancies between states that annul the arbitration awards and others that still enforce the awards despite their annulment.