A Look at the Key Changes Contemplated by Saudi Arabia’s Recently Published Draft New Arbitration Law

The Kingdom of Saudi Arabia, via the ‘National Competitiveness Center’, recently published a draft version of a new arbitration law (Draft Law) for consultation.

The Draft Law’s consultation period will end on 24 October 2025 and, subject to amendments, will be passed into law when published in the KSA Gazette.

In this article we look at the key changes proposed in the Draft Law.

Saudi Arabia introduced its first arbitration law in 2012. This was promulgated pursuant to Royal Decree No. M/34 dated 24/05/1433H (corresponding to 16/04/2012G) (Current Law). In 2017, the Current Law was updated by the issuance of the Executive Regulations which aimed to increase efficiency and transparency.

In July 2025, the Council of Ministers of the Kingdom of Saudi Arabia passed a Resolution outlining strategic measures to enhance efficiency, increase transparency, and align dispute resolution in Saudi Arabia with international best practice. Notable aims of the Resolution included:

• that a wide review of the Current Law and its Implementing Regulations would take place;
• enhancing judicial transparency through translation and publication of selected arbitration-related court judgments;
• improving procedural efficiency between government e-services and institutional arbitration platforms; and
• launching a study to evaluate the global perception of arbitration practices in Saudi Arabia.

Publication of the Draft Law followed in response to the Resolution.

Notable updates in the Draft Law include:

• a new definition of ‘Award’ as “the decision taken by the arbitral tribunal ruling on the subject matter of the dispute, or on an interim measure, including interim or partial awards, but not including decisions taken in relation to the administration of the proceedings“;
• clarification that court competence and forum issues will be dealt with by the Saudi Commercial Court of Appeal, with international cases defaulting to the Commercial Court of Appeal in Riyadh, unless the parties agree otherwise;
• clarifying the Saudi Court of Appeal as the court of competence where the seat is not specified by the parties. The Draft Law is therefore closer to the Model Law’s seat-based approach and provides clearer forum allocation than the Current Law;
• arbitrators only need to have full legal capacity and to not be deprived of civil rights by criminal conviction to preside. This mirrors the Model Law’s flexibility and international practice, and changes the Current Law’s requirement that arbitrators hold at least a university degree in Sharia or other law;
• the Draft Law does not contain the Current Law’s prohibition on Government bodies agreeing to arbitration without the Prime Minister’s approval unless a special law allows it.¹ We question whether the Draft Law’s silence on this point will affect the position under the Government Tenders and Procurement Law;
• recognition of email and mobile addresses in the definition of “postal address”. Emails are deemed received on the dispatch date absent error. Like the Model Law, parties lose the right to object to arbitration if they do not object within 15 days;
• confirmation that the arbitration agreement is governed by the law chosen by the parties or, in the absence of agreement, by the law of the seat. This reflects the position under Section 6A of the English Arbitration Act 2025;
• principles of Kompetenz-Kompetenz and negative effect have been adopted, by allowing the tribunal to rule on its own jurisdiction (including validity/scope). Parties are allowed to take a tribunal’s preliminary ruling on jurisdiction to court, but this will not stay the arbitration. This follows Article 16(3) of the Model Law;
• a full chapter on interim measures with details on standards that must be achieved for the tribunal to issue an interim order;
• allowing joinder (where the intervenor is party to the arbitration agreement) and consolidation if the parties agree (the tribunal cannot do so unilaterally). These procedural options are not addressed in the Current Law;
• the tribunal must apply the substantive rules of the chosen law (excluding its conflicts rules). If this is not possible, the conflicts rules deemed appropriate by the tribunal will be applied;
• multiple changes to rules around awards. The award shall be reasoned unless the parties agree otherwise (except for consent awards). Awards may be electronically signed and are deemed issued at the place of arbitration even if signed elsewhere. Awards no longer need to be deposited with the court. The tribunal can deliver certified copies to the parties. This aligns with Articles 31 and 32 of the Model Law ;
• reducing grounds for annulment to those seen in the Model Law and allowing a 60-day period for the tribunal to cure issues in the award;
• the definition of ‘Arbitral Tribunal’ including an emergency arbitrator, and tribunals are allowed to sit virtually and meet anywhere; and
• affording arbitrators immunity from liability to the parties except in cases of fraud or gross professional misconduct.

The Draft Law, when enacted, will be the latest step in the ongoing modernisation of Saudi Arabia’s legal system and promotion of arbitration and ADR in the Kingdom in line with international standards.

Footnote

1. See Article 10 of the Current Law.