Hi A.Samarian,
This sounds like a configuration issue. We don't specify collation in any of the scripts for MS SQL so it will use the default collation. The error sounds like something in your database has the SQL_Latin1_General_CP1_CI_AS collation. Even if you have Arabic_CI_AS as the database default maybe some table got created with the latin collation.
I suspect the error is happening in the stored procedure mp_Users_SelectPage, probably on this line:
AND [Name] LIKE @UserNameBeginsWith + '%'
try changing it to this:
AND [Name] COLLATE DATABASE_DEFAULT LIKE @UserNameBeginsWith + '%' COLLATE DATABASE_DEFAULT
Let me know if that fixes it.
Hope it helps,
Joe