Saudi Arabia's Draft Arbitration Law – The Next Chapter In The Kingdom's Arbitration Reform

Saudi Arabia will take another significant step in its long-running arbitration reform agenda this year. Against the backdrop of the Kingdom's Vision 2030 and a July 2025 policy resolution to deepen the role of arbitration, a new draft arbitration law (the Arbitration Law) has been published for consultation under the auspices of the National Competitiveness Center. The draft legislation aims to modernise the legal framework, align practice with leading international standards, and consolidate the Kingdom's momentum as a competitive regional and global seat.

This client alert outlines the principal features and proposed changes in the Kingdom's Arbitration Law and the potential implications for businesses with Saudi-connected disputes.

The Current Arbitration Landscape in the Kingdom of Saudi Arabia

Saudi Arabia's arbitration framework has evolved rapidly over the past decade. The Saudi Center for Commercial Arbitration (SCCA) has emerged as a neutral, independent and increasingly international institution, administering a growing caseload across diverse sectors under its 2023 Arbitration Rules and supported by a dedicated SCCA Court. The judiciary continues to demonstrate support for arbitration, with lower annulment rates in recent years and a practical orientation toward enforcement consistent with the Kingdom's obligations under the New York Convention. Parallel digital transformation has streamlined court and institutional processes, enabling end-to-end electronic filing, virtual hearings, and efficient award delivery. These institutional and judicial developments have materially strengthened confidence in Saudi-seated arbitration and reflect the Kingdom's broader legislative vision.

The Draft Arbitration Law

The draft Arbitration Law would repeal and replace the current legislative framework established by Royal Decree No. M/34 of 1433 AH (2012) (including its amendments introduced in 2021 and 2025), and as supplemented by the 2017 Executive Regulations (as amended in 2022). While the 2012 law advanced the Kingdom's alignment with the UNCITRAL Model Law, experience over the past decade has revealed areas for clarification and modernization. The draft responds to that experience, offering a comprehensive restatement of the Kingdom's arbitration law. The draft law retains the core structure and international orientation of the 2012 framework while introducing a series of targeted reforms designed to increase certainty, flexibility, and enforceability.

• The draft Arbitration Law provides that an arbitration agreement is deemed to be in writing if a party asserts that the agreement is in its statement of claim (or defence) and was not denied by the other party (Article 12 (3)(d) of the draft Arbitration Law).
• The draft Arbitration Law articulates a clear conflict-of-laws rule for the arbitration agreement, providing that the governing law is the law expressly chosen by the parties and, in the absence of such choice, the law of the seat (Article 11 of the draft Arbitration Law). This model brings needed certainty and harmonizes the Kingdom's approach with leading international seats.
• It also refines tribunal constitution and arbitrator requirements. It preserves the requirement for an odd number of arbitrators while curing agreements that stipulate an even number by permitting appointment of an additional arbitrator (Article 19(a) of the draft Arbitration Law). It removes prior educational prerequisites for sole or presiding arbitrators and introduces arbitrator immunity vis-à-vis the parties, save for cases of fraud or gross professional misconduct. Challenge and removal procedures are clarified, with time-bound recourse to the competent courts without halting the arbitration.
• Pursuant to the draft Arbitration Law, "each party may engage his own expert or experts to comment on the tribunal-appointed expert's report findings" (Article 44(5) of the draft Arbitration Law)
• The draft Arbitration Law enhances jurisdictional efficiency and adopts a robust competence-competence regime. Tribunals may rule on their own jurisdiction, including scope objections, with a right to immediate court challenge of positive jurisdictional findings while the arbitration proceeds (Article 28(1) –(4) of the draft Arbitration Law). This calibrated court-supervision aims to reduce wasted cost and time on jurisdictional conflict.
• The draft Arbitration law is also expected to modernise multi-party mechanisms. Tribunals may permit joinder and/or intervention where the third party is bound by the arbitration agreement, ensuring due process through an opportunity to be heard. (Article 37 of the draft Arbitration Law). Consolidation is available where the parties agree, with the draft recognizing the need for coherent management of related disputes while preserving consent.
• The draft Arbitration Law also installs an UNCITRAL-style regime for interim measures. Tribunals may order interim and precautionary measures subject to necessity and proportionality tests; courts may enforce those measures on an expedited basis, and both tribunals and courts may coordinate to preserve assets and evidence (Article 29 – 30 of the draft Arbitration Law). Emergency, interim and partial awards are expressly recognized and the test criteria is provided to a certain level of detail.
• The draft Arbitration Law codifies technology-enabled proceedings. It recognizes electronic service, mobile and email notifications, virtual hearings, and electronically signed awards (Articles 8, 35 and 52(4) of the draft Arbitration Law). Awards are deemed rendered at the seat regardless of where or how signed, further aligning formality with contemporary practice.
• The draft Arbitration Law provides a resolution in the event an award by majority is not possible. The presiding arbitrator shall issue the award provided that the other arbitrators attach their dissenting opinions, unless otherwise agreed by the parties (Article 48(2) of the draft Arbitration Law).
• It also clarifies costs and fee control. Parties are jointly liable for arbitration costs; tribunals may withhold delivery of awards pending payment, with judicial recourse available to compel delivery upon proof of payment. (Article 54 of the draft Arbitration Law). Courts may fix arbitrator fees where no agreement exists or where the court made the appointment.
• The draft Arbitration Law refines annulment and enforcement while preserving Sharia and public policy safeguards. Annulment tracks Model Law grounds with two notable features: an express ground where the tribunal disregards the parties' agreed applicable substantive law, and an explicit Sharia/public policy ground. The competent court may suspend annulment or enforcement proceedings for up to sixty days to permit the tribunal to cure formal defects without altering the award's substance, thus aiming for prompt justice. Orders granting or refusing enforcement, and annulment judgments, are appealable to the Supreme Court. The draft also establishes res judicata effect for awards regardless of the country of issuance, subject to the statutory safeguards (Articles 60–61 of the draft Arbitration Law).
• In the draft law, the Commercial Court of Appeal is identified as the competent court for most supervisory functions, and in international commercial matters the Riyadh Commercial Court of Appeal has jurisdiction unless the parties agree otherwise (Article 28(4) of the draft Arbitration Law).The court's support encompasses appointment, challenge, interim relief, evidence-gathering, fee-fixing, and ancillary matters, with clear timelines to streamline interactions between courts and tribunals.
• Finally, the draft codifies seat, language and procedure in a manner that strikes a balance between party autonomy and default rules. Proceedings default to Arabic absent agreement, though multilingual proceedings are expressly supported. The tribunal is empowered to manage admissibility and weight of evidence, and to proceed in case of non-participation while safeguarding equality and the parties' right to be heard (Article 32 (2) of the draft Arbitration Law).

Potential Implications for Parties and Practice

If enacted in its current form, the draft law would make Saudi-seated arbitration more predictable, efficient and internationally competitive. The express rule for the law governing the arbitration agreement would reduce satellite disputes and strengthen clause enforceability. Expanded tribunal powers over interim measures, together with expedited court enforcement, would enhance practical protection of rights pending final award. Arbitrator immunity and removal of legacy qualifications would broaden the talent pool and facilitate the appointment of experienced international arbitrators while maintaining integrity through disclosure, challenge and removal tools.

The introduction of joinder/intervention and consolidation on a consensual footing would give parties better tools to manage complex, multi-contract disputes, particularly in construction and large commercial projects, in a manner that would seek to improve efficiency of the arbitration procedures. The clarified annulment and enforcement framework, including the ability to cure formal defects, should reduce avoidable set-aside or enforcement refusals and thereby diminish award-risk. Technology provisions will reduce procedural friction and time to resolution. Collectively, these reforms are likely to lower transaction costs, shorten timelines, and render Saudi Arabia more attractive as a seat of arbitration and as an enforcement jurisdiction for foreign-seated awards.

At the clause-drafting stage, parties should consider aligning their arbitration agreements with the new framework. In particular, parties may wish to address the governing law of the arbitration agreement expressly, specify a seat, consider whether to opt in to consolidation mechanisms across related contracts, delineate tribunal powers over interim measures, and calibrate language provisions. Parties with existing Saudi-connected contracts may also wish to review dispute resolution provisions for compatibility with the forthcoming regime and to evaluate whether institutional rules, such as those of the SCCA, offer procedural features complementing their transaction profiles.

Conclusion

Saudi Arabia's draft arbitration law is modern and builds on a decade of judicial support and institutional progress to deliver more legal certainty, procedural flexibility, and enforcement reliability, all while preserving foundational Sharia and public policy safeguards. For investors and counterparties engaged in Saudi-related commerce, the draft law promises a more efficient path through arbitration and a more predictable endgame at annulment and enforcement. As the consultation process advances and the text is finalized, market participants should prepare for the new regime's entry into force and position their arbitration clauses and case strategies to make the most of the Kingdom's evolving landscape.

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.