Saudi Arabia is preparing to overhaul its arbitration framework with a new draft law that promises to bring its dispute resolution regime in line with international best practices. Released for consultation in September 2025, this draft builds on the reforms of the 2012 Arbitration Law and is aligned with the Kingdom’s Vision 2030 goals.
Key Innovations
- Governing Law Clarity: The draft affirms parties’ freedom to choose the law governing their arbitration agreement. In the absence of choice, the law of the seat applies, mirroring reforms in countries like the UK.
- Broader Arbitrator Pool & Immunity: Arbitrators no longer need a Sharia or law degree. They’re protected from civil liability unless misconduct is proven, enhancing neutrality and diversity in appointments.
- Joinder & Consolidation: The draft introduces mechanisms for multi-party and multi-contract disputes, allowing arbitrations to be joined or consolidated when parties agree, improving procedural efficiency.
- Stronger Interim Relief: Arbitral tribunals can issue enforceable interim measures, and emergency arbitrators are formally recognized, allowing rapid responses to urgent issues before a final award.
- Tech-Driven Procedures: Digital communication, electronic signatures, and virtual hearings are expressly allowed. Partial awards are now enforceable, and parties have flexibility over arbitration language and format.
- Enforcement and Annulment Reforms: Courts can suspend annulment actions to allow correction of technical award defects. Enforcement decisions (grants or refusals) are now appealable. Awards (foreign or domestic) carry res judicata effect.
Practical Impact
These reforms will:
- Increase certainty in contract drafting and enforcement;
- Encourage use of top-tier arbitrators;
- Streamline complex dispute resolution;
- Reduce tactical delay and costs;
- Improve confidence in Saudi Arabia as an arbitration seat.
Action Points for Businesses
- Review arbitration clauses for clarity on governing law;
- Opt into modern procedural rules (e.g., via SCCA or ICC);
- Prepare for interim relief processes;
- Monitor for the final enacted text and implementing regulations.
Once enacted, Saudi Arabia’s new arbitration law is expected to transform the Kingdom into a modern, arbitration-friendly jurisdiction, attractive to international parties while preserving core legal principles. It marks a pivotal step in reinforcing Saudi Arabia’s position as a reliable and competitive forum for dispute resolution in the Middle East and beyond.