New Arbitration Law In Saudi Arabia – A Major Development For Commerce In The Kingdom

The new Arbitration Law – approved on 16 April 2012 – is a significant step forward in the development in the law in the Kingdom and has wide-ranging implications for businesses (both local and international) trading in the domestic market. In particular, the new Law removes many of the negative aspects of the previous Arbitration Law such that businesses can have much greater confidence in arbitration as an effective means of dispute resolution.

For various reasons, dispute resolution under commercial contracts in Saudi Arabia is perceived as being difficult.  Businesses have three options when drafting dispute resolution clauses in their commercial contracts:

• refer disputes to the local courts (including the Board of Grievances);