On 24 September 2025, the National Competitive Centre (“NCC”) of the Kingdom of Saudi Arabia (“KSA”) published the “Draft of Arbitration Law” (the “Draft Arbitration Law” or the “DAL”), following the Council of Ministers’ June 2025 Resolution, as part of KSA’s efforts to modernise the regulatory framework of arbitration, with the objective of “enhancing perceptions of arbitration in the Kingdom, in a manner that positively reflects on the relevant international indicators”.
The Draft Arbitration Law was open for consultation until 24 October 2025, inviting comments from the public before reaching a final version of the legislation, which is yet to be approved.
This new piece of legislation introduces changes to the current arbitration framework in the KSA, governed by the 2012 Law of Arbitration (Royal Decree No. M/34 dated 16 April 2012), and the 2017 Regulation of the Arbitration Law (Cabinet Decision No. 541/1438 dated 22 May 2017 jointly, the “2012 Arbitration Law”). Pursuant to its final provisions, the Draft Arbitration Law shall replace the 2012 Arbitration Law.
Some of the most significant changes proposed by the Draft Arbitration Law are listed below:
Technological Changes
As part of its technological updates, the Draft Arbitration Law introduces the possibility for hearings to be held remotely via video conference and for the arbitral tribunal to meet “using modern technology” (Arts. 35 and 41). Notifications may now also be made by electronic means to the recipient’s mobile phone or email address (Art. 8). Additionally, awards may be electronically signed and considered rendered at the place of arbitration (Art. 52). The 2012 Arbitration Law does not expressly recognise either of these possibilities.
Applicable Law
Article 11 of the Draft Arbitration Law provides that the law applicable to an arbitration agreement shall be that expressly agreed by the parties, or if no such agreement is made, the law of the seat of arbitration. This provision departs from the formula set out in Article 38 of the 2012 Arbitration Law, pursuant to which, if no agreement on the applicable law is made, the arbitral tribunal shall apply the law “it considers the most relevant to the subject of the dispute”.
Arbitrators and Arbitral Tribunal
The Draft Arbitration Law introduces changes in the characteristics of arbitrators and composition of the arbitral tribunal:
- Article 20 of the DAL simplifies the requirements an arbitrator should meet, providing that any natural person with full legal capacity (not deprived of the exercise of civil rights as a result of a criminal conviction), may be appointed as such. In contrast, Article 14 of the 2012 Arbitration Law, provides a stricter set of requirements for arbitrators, including to: (a) be legally competent, (b) be of good conduct and behaviour, and (c) hold at least a college degree in Islamic legislation knowledge or regular knowledge. If the arbitral tribunal is made up of more than one arbitrator, only the head of the tribunal should meet such conditions.
- The Draft Arbitration Law allows parties to agree on arbitrators from different nationalities, whereas the 2012 Arbitration Law is silent on this regard.
- The Draft Arbitration Law limits the liability of arbitrators for cases of fraud or gross professional misconduct. The 2012 Arbitration Law is silent on this regard.
- Article 13 of the 2012 Arbitration Law sets out that the arbitral tribunal shall be constituted by an odd number of arbitrators, failing which the arbitration shall be null and void. The Draft Arbitration Law solves this problem by recognising the possibility of appointing an additional arbitrator in such situations, without making the arbitration agreement automatically invalid as a result.
The way forward
The Draft Arbitration Law is yet to be approved and published in the Official Gazette before entering into force and may thus still be subject to changes. If implemented, it would modernise the way arbitration is conducted in the KSA, consistent with the Saudi Council of Ministers’ and NCC expressed goals.
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