Saudi Arabia Reviews Arbitration Law to Boost Commercial Competitiveness
In a move to strengthen its commercial environment and align with international best practices, Saudi Arabia’s Ministry of Commerce is undertaking a comprehensive review of the Kingdom’s current arbitration law.
According to information available to Asharq Al-Awsat, the initiative is part of broader legislative reforms aimed at enhancing legal certainty and investor confidence in Saudi Arabia’s business landscape.
Arbitration—an alternative dispute resolution mechanism where parties agree to settle disputes through neutral arbitrators rather than traditional courts—is commonly used in commercial and civil cases, excluding personal status matters.
According to sources familiar with the matter, the ministry is actively engaging with stakeholders from the private sector, including investors and entrepreneurs, to solicit feedback on the current arbitration framework. The goal is to identify key challenges and practical gaps, and to ensure that the updated legislation is responsive to real-world commercial needs.
The review covers a wide range of issues within the existing arbitration system. Among the ministry’s priorities is assessing whether the current legal text is sufficiently clear and whether it adequately defines key terms used in arbitration proceedings. Officials are also examining the scope of the law’s applicability, particularly in international disputes, and evaluating whether existing criteria for cross-border arbitration have posed implementation challenges.
The ministry is seeking insights on the clarity of mandatory versus supplementary legal provisions, judicial jurisdiction over nullification claims, and the effectiveness of procedural regulations. Feedback is also being collected on the legal capacity of corporate entities to enter into arbitration agreements, as well as the validity of arbitration clauses included in contracts or signed post-dispute.
Another area of focus is the process for determining and agreeing on arbitrators’ fees. The Ministry is exploring ways to streamline this process and address practical issues related to arbitrator challenges and disqualifications.
Established in 2014 by a Cabinet decision, the Saudi Center for Commercial Arbitration (SCCA) serves as the Kingdom’s primary institutional body for overseeing arbitration and mediation. It operates as a non-profit entity governed by recognized judicial and commercial principles.
The SCCA has reported a notable uptick in caseload: in 2024, the center registered 120 new cases—a 30 percent increase over the previous year. Arbitration cases alone surged 59 percent, rising from 46 to 73. The total value of disputes reached SAR 1.1 billion ($293 million), while the average time to resolve a case remained under six months.
aawsat.com