Saudi Arabia’s arbitration landscape has undergone significant change, reflecting both legal ambition and economic strategy. Over the past decade, the Kingdom has moved from a jurisdiction viewed cautiously by international users to one increasingly seen as organized, technologically advanced, and predictable in procedures. This development closely aligns with the goals of Vision 2030, which seeks to diversify the national economy, attract high-quality foreign investment, and promote the growth of large infrastructure and commercial projects. Arbitration has become a key tool for the Kingdom to achieve these objectives, not by simply adding modern terminology to its legal system, but by fundamentally overhauling its institutional, statutory, and digital framework.
Before 2012, arbitration in the Kingdom was officially recognized but faced procedural limitations. Courts had broad authority to review awards on their merits, often interpreting Sharia and public policy broadly. This created uncertainty for parties and caused lengthy delays in enforcement, especially for foreign awards. The lack of institutional arbitration meant most proceedings were ad hoc, with limited procedural rules and few arbitrators. Inconsistent judicial practices further discouraged the selection of Saudi seats, prompting many international parties to prefer jurisdictions such as Bahrain, Dubai, London, or Paris. The system was theoretically functional but practically fragile, unable to support the complex commercial relationships needed for a rapidly modernizing economy.
This started to transform with the introduction of the 2012 Arbitration Law and the 2012 Enforcement Law. The Arbitration Law, heavily influenced by the UNCITRAL Model Law, introduced key principles such as competence-competence, separability, and the primacy of party autonomy while limiting judicial intervention and transferring jurisdiction to the Courts of Appeal. The Enforcement Law supported this change by establishing specialized enforcement courts closely linked with the Ministry of Justice’s digital platform, Najiz. These reforms shortened enforcement timelines from years to months, or in many cases weeks, and built the confidence of both domestic and international parties. Together, these legislative milestones established Saudi Arabia’s first modern arbitration framework.
The establishment of the Saudi Center for Commercial Arbitration (SCCA) in 2014 marked the completion of this initial phase of reform. The SCCA introduced organized case management, bilingual rules, and a governance structure separating administrative and quasi-judicial functions, mirroring the practices of leading international institutions. Its 2023 Rules demonstrate an advanced understanding of modern arbitration requirements, including emergency arbitration, remote hearings, multi-contract and multi-party tools, tribunal secretary guidelines, third-party funding disclosures, cybersecurity standards, and a fully digital online dispute resolution (ODR) system. These features, along with the Kingdom’s broader judicial digitalization, led to an increase in SCCA caseloads and enhanced its reputation as a reputable forum for complex commercial disputes.
A distinctive feature of the Saudi arbitration system is the Permanent Committee for Saudi Arbitration Centers, the national regulator responsible for licensing and overseeing all non-SCCA centers. This Committee enforces governance standards, ethical requirements, digital readiness, and conflict-of-interest safeguards, ensuring a level of regulatory consistency rarely seen in the region. Its ban on founders or board members serving as arbitrators in their own centers is a notable step toward institutional integrity. Under its oversight, regional arbitration centers in Makkah, Al-Ahsa, the Eastern Province, and Abha operate within a unified national framework while providing accessible services to local businesses and SMEs. This tiered system reflects the Kingdom’s balanced approach, prioritizing national quality standards while maintaining regional accessibility.
Despite the strengths of the 2012 framework, certain limitations became increasingly clear as the Kingdom’s economy grew. The default twelve-month deadline for issuing awards was too rigid for complex disputes. Requiring tribunal chairs to have degrees in Sharia or law limited the inclusion of technical experts essential for resolving disputes in construction, energy, and technology. The need for high-level approval for government entities to enter arbitration agreements introduced procedural uncertainty. Although courts adopted digital practices, the law did not explicitly support electronic notices, remote hearings, or electronic signatures. Multi-party and multi-contract disputes, which are becoming more common in giga-projects, lacked clear statutory mechanisms. Interim and emergency measures were underdeveloped, leaving tribunals without enough authority to act quickly in urgent situations. These gaps highlighted the need for a more advanced legal framework to support the Kingdom’s economic growth.
The Draft Arbitration Law of 2025 marks a major update to Saudi arbitration law. It updates the concept of an arbitral award by explicitly recognizing interim, partial, and consent awards and removes the previous requirement to deposit awards with the courts before enforcement. This change aligns with current global practices and removes procedural delays that previously hindered enforcement. The draft reaffirms party autonomy in setting award timelines, allowing parties to create schedules suited to the complexity of the dispute, and authorizes courts to extend deadlines when appropriate. This flexibility is especially important in large-scale commercial disputes, notably in the construction and infrastructure sectors.
The draft resolves a long-standing doctrinal ambiguity by confirming that, in the absence of party choice, the law governing the arbitration agreement is the law of the seat. This approach aligns with international trends, including recent reforms in the United Kingdom, and improves predictability in contract drafting and enforcement. Regarding interim measures, the draft adopts a strong UNCITRAL-style framework, empowering tribunals to issue orders to preserve assets, maintain the status quo, prevent prejudice to the proceedings, or secure evidence. Importantly, the draft provides statutory recognition to emergency arbitrators, ensuring that urgent applications can be addressed even before the full tribunal is assembled. This feature enhances the procedural toolkit available to parties and brings Saudi practice in line with international expectations.
The draft also introduces an important procedural innovation: the ability of courts to halt annulment proceedings for up to sixty days to allow the tribunal to correct procedural deficiencies. This “cure period” reduces the chances of awards being overturned over technical errors that could be reasonably fixed and reflects a broader shift toward judicial support of arbitration rather than judicial interference.
One of the most important changes is the removal of the requirement for tribunal chairs to hold degrees in Sharia or law. This allows technical specialists—engineers, accountants, project managers, and industry experts—whose sector-specific knowledge is often crucial in modern disputes, to serve as arbitrators. By expanding the pool of arbitrators, the draft improves the Kingdom’s ability to handle complex, technically demanding cases. Arbitrator immunity is explicitly acknowledged, restricting liability to instances of fraud or gross negligence, which encourages experienced arbitrators to accept Saudi-seated appointments.
Digitalisation is fully integrated into the draft. Electronic notices, including those sent to email addresses or mobile numbers, are considered valid. Remote hearings are explicitly permitted, and awards may be signed electronically and issued from outside the Kingdom. These provisions offer legal certainty for practices already widely adopted internationally and bring Saudi Arabia in line with the most technologically advanced arbitration regimes.
A particularly notable development is the elimination of the former Article 10, which required Prime Ministerial approval for government arbitration. While internal regulations may eventually specify approval procedures, the legislative omission indicates a conscious shift toward treating government entities as commercial actors, reducing barriers to participation in arbitration and boosting confidence among foreign investors involved in PPP arrangements or government-related contracts.
These reforms have significant economic effects. Construction and infrastructure disputes benefit from increased procedural flexibility and stronger tools for multi-party coordination. Energy-sector disputes improve with enforceable interim measures that safeguard assets and prevent operational disruptions. Technology, digital services, and intellectual property disputes are supported by legal recognition of remote hearings, electronic evidence, and digital signatures. Financial institutions gain from improved predictability in the enforcement of awards. SMEs benefit from better regional access and fully digital processes. In this way, arbitration is not just a dispute-resolution tool but a vital part of the Kingdom’s investment framework.
Although it has strengths, the Draft Law still leaves some issues for further development. Public-policy and Sharia-based exceptions are broadly worded and rely on judicial interpretation, which could lead to uncertainty in complex enforcement cases. Government entities’ authority to commit to arbitration agreements is not explicitly defined by law, and judicial discretion in enforcement remains wide, which may result in inconsistent decisions. The law also does not cover digital evidence, blockchain records, or AI-generated documents, increasingly relevant in technology-driven disputes. Third-party funding is still unregulated, raising concerns about transparency and costs. Challenges include limited arbitrator diversity, appointment concentration, and slow publication of awards, which affect the development of a consistent national arbitration jurisprudence.
Future reforms could benefit from judicial guidance that clarifies the limits of public-policy exceptions, regulatory rules defining government authority, and the establishment of specialized judicial chambers dedicated to annulment and enforcement. A digital evidence framework would prepare the system for the next decade of technologically driven disputes. Regulating third-party funding would improve transparency and bring Saudi practice in line with global trends. Transparent reporting on arbitrator appointments would promote greater diversity and reduce concentration. Finally, an anonymized award-publication framework would help develop a predictable, credible body of jurisprudence.
Saudi Arabia’s arbitration reforms reflect a dynamic, forward-looking legal strategy. The Draft Arbitration Law of 2025 signals a mature phase of development, aligning statutory language with the realities of a diverse, digitally advanced economy. Remaining gaps present opportunities for refinement rather than barriers to progress. The Kingdom is moving beyond the role of a regional participant to that of an emerging standard-setter, building a model based on institutional discipline, digital sophistication, and economic purpose. The landscape has shifted, and Saudi Arabia is no longer simply adapting to global arbitration norms; it is positioning itself to shape them.
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