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The Kingdom of Saudi Arabia has taken a significant step forward in reshaping its arbitration landscape with the release of the Draft Arbitration Law.
This development reflects Riyadh’s broader ambitions under Vision 2030 to become a hub for commerce, dispute resolution, and foreign investment in the Middle East. For businesses, investors, and practitioners alike, the law represents a modern, comprehensive framework designed to align with international standards while respecting Saudi Arabia’s unique legal identity rooted in Sharia principles.
Modernization and International Alignment
The Draft Arbitration Law streamlines procedures and introduces clearer definitions, greater flexibility for parties, and stronger enforcement mechanisms. Importantly, it applies not only to domestic arbitration seated in the Kingdom but also to international commercial arbitration with a Saudi nexus, should the parties agree.
This dual scope underscores Saudi Arabia’s desire to attract cross-border commerce and investment by assuring international parties that arbitration proceedings will meet global best practices. Provisions governing interim measures, electronic communications, virtual hearings, and enforcement of awards demonstrate a clear effort to align with UNCITRAL standards while retaining a distinctly Saudi character.
Key Highlights
Arbitration Agreement: The law recognizes electronic formats and digital signatures, broadening access in today’s digital economy.
Tribunal Composition: Arbitrators must have full legal capacity, but there are no restrictions on nationality unless parties agree otherwise, widening the pool of expertise available.
Procedural Flexibility: Parties may select their own procedural rules, including institutional rules, provided they do not contravene Sharia and provides for virtual hearings and electronic submissions. This allows alignment with leading international arbitration centers.
Interim and Conservatory Measures: For the first time, tribunals can order measures to preserve assets, maintain status quo, or secure evidence. Courts are empowered to enforce these measures quickly.
Finality of Awards: Awards are binding and enforceable, with annulment limited to narrow grounds, such as violation of Sharia or public policy, improper tribunal formation, or incapacity of a party.
Enforcement: Awards have the same res judicata effect as court judgments, subject to verification by Saudi courts. Certified Arabic translations are required for awards in other languages.
A Balancing Act: Modern Standards and Local Identity
The Draft Arbitration Law reflects a careful balance between international norms and domestic legal principles. While inspired by global models such as the UNCITRAL Model Law, its mandatory references to Sharia and Saudi public policy maintain continuity with the Kingdom’s legal tradition. This duality will be familiar to regional practitioners, but for international users it provides reassurance that Saudi Arabia is committed to predictability while remaining anchored in its constitutional foundations.
Business Confidence and Investor Protection
For multinational corporations, joint ventures, and financial institutions, arbitration is often the preferred method of dispute resolution due to its neutrality and confidentiality. The Draft Law goes a long way in addressing investor concerns around enforceability and efficiency, especially by introducing time limits for certain procedures and enabling virtual hearings. These reforms support Riyadh’s strategic goal of becoming a regional hub for finance and trade.
Opportunities for the Region
For the wider Middle East, the Saudi reform raises the bar. It will encourage greater consistency across jurisdictions, increase investor confidence, and may well inspire similar updates in neighboring states. Given the Kingdom’s role as the largest economy in the GCC, this legislation is likely to influence the direction of arbitration reform across the region.
GLA & Co’s Perspective
As a firm deeply engaged in regional arbitration, GLA & Co recognizes the importance of this draft law for the legal community and business sector. Nader Al Awadhi, Senior Partner at GLA & Co, commented:
“Saudi Arabia’s Draft Arbitration Law is a milestone for the Kingdom and for the region. It brings the Kingdom’s arbitration framework closer to international standards while preserving its unique legal identity. For businesses, it provides clarity, flexibility, and—most importantly—confidence that their disputes will be resolved fairly and efficiently. At GLA & Co, we view this as a positive development that will enhance Saudi Arabia’s role as a regional leader in dispute resolution.”
Conclusion
The Draft Arbitration Law marks a new era for dispute resolution in Saudi Arabia. By integrating international best practices with local legal traditions, the Kingdom is signaling its readiness to host high-value commercial disputes and to strengthen its attractiveness as a global investment destination.
GLA & Co will continue to monitor the progress of this law closely and provide clients with up-to-date analysis and practical guidance. As the Middle East’s leading regional law firm, we remain committed to supporting clients in navigating this evolving landscape and in harnessing the opportunities it presents.