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The Saudi National Competitiveness Center has published a draft new arbitration law and has invited views on the proposals.
The context to the draft new arbitration law
Saudi Arabia's arbitration landscape has evolved rapidly over the last decade. The 2012 Arbitration Law, modelled broadly on the UNCITRAL Model Law, together with the 2017 Implementing Regulations and sweeping institutional reforms led by the Saudi Center for Commercial Arbitration (SCCA), have driven a marked shift toward an arbitration friendly regime.
In parallel, enforcement practice in the Kingdom under the Enforcement Law has matured, and the judiciary has developed a consistently pro enforcement posture.
Against this backdrop, the authorities have now released a consultation draft new arbitration law. It is therefore useful to situate the draft within the Kingdom's trajectory, highlight the headline changes reported to date, and anticipate the practical impact if the text is enacted substantially as published.
The 2012 Arbitration Law (Royal Decree No. M/34 dated 16 April 2012) set the modern foundation by embracing core UNCITRAL Model Law concepts: party autonomy on rules, seat, and language; kompetenz kompetenz; limited, enumerated annulment grounds; and a clear separation of merits review from procedural oversight.
The 2017 Implementing Regulations (Ministerial Resolution No. 541 dated 22 May 2017) clarified critical mechanics, including confirmation of the Saudi Court of Appeal as the competent court for arbitration related matters, the possibility of electronic notice, tribunal powers to consider joinder with consent, and Supreme Court review on set aside.
Institutionally, the SCCA has modernised case administration. Its 2023 Arbitration Rules align closely with international best practices. The Rules introduced early disposition for manifestly unmeritorious claims, robust consolidation and joinder options, an emergency-arbitrator procedure with a 14 day decision timeline, a list method for appointments, electronic filing and electronically signed awards by default, and a detailed cybersecurity and data protection framework. They also codified party autonomy to choose foreign counsel and established an expedited track for lower value claims with accelerated timetables. Procedurally, the expedited track applies up to SAR 4 million with a 180 day award target—an efficiency benchmark calibrated for regional practice.
The enforcement picture has likewise strengthened. Saudi Arabia has been a New York Convention state since 1994, and the 2012 Enforcement Law (Royal Decree No. M/53 dated 3 July 2012) created specialised enforcement courts and streamlined procedures. Practitioner surveys and institutional studies note high rates of enforcement and a low success rate for annulment applications, with court timelines for enforcement actions measured in weeks rather than months in many cases. Crucially, courts apply a narrow conception of public policy anchored in core Sharia principles, permitting partial enforcement where only discrete elements (notably interest) are non compliant.
Finally, “public law” constraints are now more predictable. Government recourse to arbitration has moved from exception to managed norm: approvals still apply for public bodies, but central guidance and model clauses have made arbitration a realistic option in government and quasi government contracting, subject to policy oversight.
Changes proposed in the draft new arbitration law
Based on the consultation text the proposed reforms are consistent with legislative, judicial, and institutional signals over the last five years. The draft statute focuses on four areas.
First, it consolidates and clarifies. Provisions scattered across the 2012 Law and 2017 Regulations—on electronic service, tribunal powers around joinder and consolidation, competent courts, and limited award scrutiny—are brought into a single, integrated text to reduce interpretative friction. Where practice has matured, especially around electronic process and remote procedures, the draft makes explicit what courts already accept in implementation.
Second, it deepens alignment with the UNCITRAL Model Law while retaining Saudi public policy guardrails. The direction of travel remains toward predictability, party autonomy and restraint in court intervention. Consistent with prior messaging—“international best practice so long as not contrary to Sharia and public policy”—the draft calibrates boundaries rather than redrawing them, including a clearer articulation of public policy exceptions while preserving existing constraints on interest and specific remedies incompatible with Sharia.
Third, it codifies efficiency tools proven in the SCCA Rules. Early disposition, formal recognition and enforcement of tribunal ordered interim measures (including emergency relief), modern consolidation and coordination across parallel proceedings, and explicit encouragement of technology enabled procedures are given statutory footing. The goal is to increase predictability across both institutional and ad hoc arbitrations seated in the Kingdom.
Fourth, it addresses recurrent practical questions. The draft clarifies representation rights (including the participation of foreign counsel) to eliminate residual doubt in ad hoc cases. It restates appointment standards for arbitrators - especially the requirement that a sole arbitrator or chair hold a degree in Sharia or law - with greater precision to ensure international parties can appoint broadly while satisfying local competency expectations. Finally, it formalises the interface with the Enforcement Law, clarifying filing requirements, stays pending annulment proceedings, and the mechanics of partial enforcement.
Conclusion
Saudi arbitration policy is not pivoting; it is consolidating. The published draft would codify the pro arbitration posture that now characterises the Kingdom's regime.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
