Mohamed Kohail, shown in an undated handout photo, may yet be saved from a public beheading in Saudi Arabia. (Canadian Press)

The Saudi supreme court has rejected the death sentence of a Canadian man and asked the lower court to revise its ruling, CBC News has learned.

Mohamed Kohail of Montreal was convicted of murder and sentenced on March 3, 2008, to a public beheading following a schoolyard brawl in 2007 in the city of Jeddah, an incident that left one dead.

A capital punishment sentence must have the approval of the Supreme Court Council before it is referred to the king, who is considered the ultimate authority, CBC's Dan Halton reported.

This latest decision means the lower court will now consider the top court's recommendations and possibly come up with a new ruling, a potentially important step for Kohail, Halton reported.

Kohail's younger brother, Sultan, 17, was convicted in April of similar charges and sentenced to spend one year in prison and 200 lashes. The victim's family appealed, and he is facing a new trial in front of the same judges who sentenced his older brother to death.

Liberal MP Dan McTeague, who has been lobbying both the Saudi and Canadian governments on behalf of the family, said the decision puts the Kohails in a legal "no-mans-land." He also stressed the brothers "are not out of the woods yet."

"The time in the interim does allow for other negotiations that could allow Mr. Kohail [to] go free," McTeague told CBC News on Tuesday from Ottawa. "We're in a bit of a neutral zone."

The incident took place after Sultan's schoolmate accused him of insulting a girl at the school, in the city of Jeddah. Sultan then allegedly called his older brother, asking Mohamed Kohail to defend him.

Then, according to the younger brother's account, Mohamed Kohail arrived to find a group of men waiting for him, some armed with clubs and knives. In the fight that followed, an 18-year-old student died.

The Kohail brothers grew up in Saudi Arabia but have been Canadian citizens since 2005, and lived in Montreal before returning to Saudi Arabia in 2006.