In recent years, Saudi Arabia has emerged as a leading jurisdiction in the Middle East for international arbitration. Driven by its Vision 2030 economic diversification agenda, the Kingdom has undertaken significant legal and institutional reforms aimed at fostering an arbitration-friendly environment aligned with global best practices. This article provides an overview of the legal framework, key institutions and current trends shaping the landscape of international arbitration in Saudi Arabia.
Saudi Arabia's 2012 Arbitration Law: Modernized and Aligned with International Standards
International arbitration in Saudi Arabia is governed by the Arbitration Law of 2012 (Royal Decree No. M/34), which marked a significant shift toward aligning the Kingdom's arbitration framework with international standards.
Based primarily on the UNCITRAL Model Law, the 2012 Arbitration Law applies to both domestic and international arbitrations, provided the seat of arbitration is within Saudi Arabia, or if parties agree for it to apply (Article 2).
The Law emphasizes party autonomy, procedural flexibility and the enforceability of arbitral awards, including those rendered abroad, subject to the New York Convention, to which Saudi Arabia acceded in 1994.
While party autonomy is respected, any award must still not violate Saudi public policy or Sharia principles (Articles 2, 5, 25, 38, 50(2) and 55(2)(b)). This has practical implications, for instance, awards granting interest (riba) are generally unenforceable, reflecting the Kingdom's adherence to Islamic legal principles.
Historical Evolution of Arbitration in Saudi Arabia
The roots of arbitration in Saudi Arabia date back to 1923, when the first known arbitration clause was included in a concession agreement between King Abdulaziz, the Kingdom's founder, and Major Frank Holmes, an agent of Eastern and General Syndicate Ltd., to drill for oil in the Al-Ahsa region. This clause established arbitration as the mechanism for resolving disputes, defining its scope, procedure, and the finality of awards (SCCA Profile March 2025 Edition, p. 4).
Key milestones in the evolution of arbitration in Saudi Arabia include (SCCA Profile March 2025 Edition, p. 5):
- In 1983, an Arbitration Law was enacted (consisting of 48 articles), replacing provisions in the Commercial Courts Law and other laws. The Riyadh Arab Agreement for Judicial Cooperation was also signed, which is a significant multilateral treaty aimed at fostering judicial cooperation among Arab League member states.
- In 1994, Saudi Arabia acceded to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
- In 2012, the new Arbitration Law was enacted, which is based on the UNCITRAL Model Law, as discussed above.
- In 2014, the Saudi Center for Commercial Arbitration was established, as discussed in the next section.
Institutional Arbitration: The Role of the SCCA
Established in 2014, the Saudi Center for Commercial Arbitration (“SCCA”) has emerged as the Kingdom of Saudi Arabia's premier arbitral institution. It operates as a financially and administratively independent, not-for-profit legal entity, offering a comprehensive range of alternative dispute resolution (ADR) services, including both domestic and international arbitration, as well as mediation.
The 2023 SCCA Arbitration Rules, the second edition of the Rules, came into effect on 1 May 2023. These Rules are broadly modelled on the UNCITRAL Arbitration Rules, reflecting international best practices and reinforcing the SCCA's alignment with global standards. The original edition of the Rules was adopted on 1 May 2016.
Between October 2016 and April 2022, the SCCA reported that it had registered 211 filings, with total claims exceeding USD 1.01 billion.
The 2023 SCCA Arbitration Rules are modern, also providing for:
- Expedited Procedure Rules for streamlined resolution of less complex cases (Appendix II);
- Emergency Arbitrator Procedure Rules, allowing parties to seek urgent interim relief prior to tribunal constitution (Appendix III);
- Online Dispute Resolution Procedure Rules, facilitating efficient digital resolution mechanisms (Appendix IV).
From our observations, the SCCA has demonstrated a responsive and professional approach in the management of arbitrations.
Conclusion
Saudi Arabia has made substantial progress in embracing international arbitration as a viable and reliable method of dispute resolution. With a modern legal framework, a growing arbitration centre in the SCCA, and a judiciary increasingly supportive of arbitration, the Kingdom is positioning itself as a serious player in the global arbitration arena. Nevertheless, parties should remain mindful of Sharia-based public policy limitations, particularly during the enforcement stage. With prudent planning and appropriate legal guidance, international arbitration in Saudi Arabia offers a compelling venue for cross-border dispute resolution in the Middle East.
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