Tuesday, 21 October 2025
Saudi Arabia is preparing a major overhaul of its arbitration system as part of efforts to strengthen the country’s legal environment and appeal to international investors. A draft law released for public consultation outlines a series of reforms designed to simplify dispute resolution and bring local practice closer to international standards.
The proposed legislation, now open for comment until late October, will replace the framework introduced in 2012. It reflects Riyadh’s ambition to turn Saudi Arabia into a regional hub for commercial arbitration, a move that aligns with the broader goals of the Kingdom’s Vision 2030 economic programme.
Under the draft reforms, arbitration proceedings would become more adaptable to modern business needs. Tribunals would have the ability to issue partial or interim decisions during a case, and awards could be signed electronically or even from outside Saudi Arabia — a notable shift from earlier practice that often tied procedural steps to location and formality.
The proposed law also gives tribunals clearer authority to order urgent measures such as preserving assets or evidence, a feature that mirrors international arbitration rules and could help prevent disputes from escalating while proceedings are still under way.
In another break from tradition, arbitrators would no longer be required to hold a law or Shari’ah degree, and parties could appoint professionals of any nationality. Observers say this would significantly expand the pool of eligible arbitrators and enhance perceptions of neutrality, a factor seen as critical to attracting cross-border commercial cases.
The draft also formalises the principle that arbitrators can decide their own jurisdiction, enabling them to determine whether they have the authority to hear a case before involving the courts. This approach is widely recognised in other jurisdictions as a hallmark of efficient arbitration.
Reflecting post-pandemic realities, the reforms allow hearings to take place virtually unless the parties agree otherwise. Arbitration agreements concluded through digital communication would be recognised as valid, while notices sent electronically could be treated as properly delivered. These changes are intended to make the system more accessible to international users and to reduce delays linked to administrative procedures.
Legal practitioners say the new framework could enhance Saudi Arabia’s competitiveness as a venue for resolving commercial disputes, particularly in the energy, infrastructure, and technology sectors where cross-border investment is expanding rapidly. If implemented as proposed, the law would give parties greater autonomy in structuring arbitration proceedings and improve the enforceability of awards both domestically and abroad.
The public consultation on the draft closes this month, after which the final version will be reviewed and published in the country’s official gazette. The law would come into force one month later. Analysts view the initiative as part of a wider trend across the Gulf, where states are reforming arbitration systems to create predictable, investor-friendly environments that align with global commercial practice.
Source: CMS
