ABSTRACT
This chapter examines the issues related to arbitration as a mechanism for the settlement of banking disputes in Saudi Arabia. It discusses the arbitrability of banking disputes; the arbitration clause in financial transactions; the concept of duality in the Saudi legal system; and alternative remedies when arbitration fails to serve its objectives. In all legal systems around the world, contradiction of public policy is a great threat to the arbitral process. The banking and general legal systems of Saudi Arabia are structured in quite a strange manner owing to the obvious conflict between Shari'a principles and the way in which conventional banks function. The banking system is the heart of any modern economy and a strong economy cannot exist without a sound banking system. Neighbouring states that have laws based on principles similar to those of Saudi Arabia, such as Egypt and the United Arab Emirates, still have a different approach to the issue of banking interest in general.
