Neom is designed as a controversial free trade zone, a legal oasis so to speak, offering Western investors security and familiarity amid Saudi Arabia`s conservative and Shariah-based legal landscape. If companies know that they can invest in Saudi Arabia in accordance with Western rules, standards and best practices, the reasoning is that they will invest more. Your personal data will only be kept for as long as necessary in accordance with the retention periods established for the purposes for which they were collected and to comply with legal, regulatory, accounting or reporting obligations. This period may vary depending on individual circumstances. We regularly review our retention period to ensure that we do not retain your data longer than necessary. Saudi Arabia has been a signatory to the New York Convention for some time. The New York Convention provides for the enforcement of foreign arbitral awards in the courts of signatory States. Upon signing the New York Convention, Saudi Arabia made the following declaration: “On the basis of reciprocity, the Kingdom declares that it will limit the application of the Convention to the recognition and enforcement of arbitral awards rendered in the territory of a State Party.” The enforcement law also requires reciprocity in Article 11 and, in accordance with the regulations implementing the Enforcement Act (Regulations), the burden of proof of compliance with this criterion lies with the performing party. As signatories to the New York Convention, the Riyadh Convention, the GCC Convention and the ICSID Convention and 21 bilateral investment treaties, the reference to relevant international treaties should, in most cases, be sufficient to demonstrate reciprocity. However, if the award originates from one of the few countries not covered by these contracts, it is not clear how this criterion could be satisfactorily demonstrated by either party. On the other hand, the observance of Sharia law is not strictly limited to foreign rewards; Sharia law is the foundation of the Saudi judicial system itself.
However, it will be rare (if ever) for a domestic Saudi arbitral award to encounter Sharia compliance issues for obvious enforcement reasons. The most likely Sharia problems that may arise in the enforcement of foreign arbitral awards are interest subsidies or economic losses, which are considered “speculative” under Sharia law. The Enforcement Rules stipulate in Article 9.1 that an arbitral award that is not in conformity with Sharia law “shall not be enforced to the extent of such a conflict”, i.e. it may be enforced, but excludes elements that contradict Shariah. Therefore, knowledge of what is enforceable in Saudi Arabia is relevant not only from the outset of a claim, but also for risk sharing during contract negotiations and administration. Riyadh, for example, has long faced international criticism of the guardianship system, which assigns every woman a male relative – a father, brother, husband or son – whose consent was required for various important decisions throughout a woman`s life. The law was reformed in August 2019. In July 2020, US-based Air Products & Chemicals Inc. announced plans to build the world`s largest green hydrogen plant in Saudi Arabia.
Air Products will jointly own the $5 billion project, Saudi Arabia`s ACWA Power and Neom.  In May 2022, Indian conglomerate Larsen & Toubro was awarded the contract to build a 2,930 MW solar power plant, a 1,370 MW wind farm, a 400 MW battery storage system and an approximately 190 km power transmission grid.  Many international contractors will have experience with Sharia law operating in golf construction markets. Although Sharia law is unique in the Muslim world and still poses challenges to the unknown, the Gulf states have globally oriented business frameworks that are well understood and reassure the foreign entrepreneurs operating there. The Saudi market, on the other hand, has not yet secured the same international commitment as its smaller neighbors. However, the kingdom has slowly codified its Sharia legal system to become more accessible and therefore more convenient for foreign companies. And will the Saudis change their “Basic Law of Government,” as the UAE did 15 years ago, to allow their own free trade zone? Once these fundamental questions are answered, for example by requiring Neom to follow the Dubai model and use English common law, external investors will know that Neom is the real deal: a place where business can be risky and done in an appropriate and conducive legal climate. “Saudi legal frameworks will create the commercial conditions for the Kingdom`s reputation as a business hub” Saudi Arabia has long been an economic powerhouse in the Middle East, but with an economy focused primarily on oil, this has not led to a broader global profile comparable to other regional markets such as the UAE.