Background and reform context
The Draft Arbitration Law follows the June 2025 Council of Ministers Resolution, which sets out a comprehensive strategy to develop the arbitration ecosystem in Saudi Arabia.
This strategy includes reviewing the existing Arbitration Law and its Implementing Regulations to update them, publishing selected judgments related to arbitration to improve transparency, promoting public awareness of arbitration, and leveraging technology to streamline procedures.
The Draft Arbitration Law is accompanied by a note outlining the objectives of this particular reform, which include promoting party autonomy, removing outdated formalities, and aligning with international best practices while respecting the Kingdom’s legal traditions.
Key changes
Qualification requirements for arbitrators
The Draft Arbitration Law removes the previous requirement for the presiding arbitrator to be qualified in Shari’a or law. Now, all the arbitrators, including the presiding arbitrator, need only be natural persons with full legal capacity and no prior criminal conviction.
The Draft Arbitration Law also confirms, in Article 20(2), that no nationality restrictions apply unless the parties agree otherwise. These changes would broaden the pool of eligible arbitrators and facilitate the appointment of non-lawyer experts as arbitrators.
Express reference to arbitrators’ immunity
Article 27 of the Draft Arbitration Law grants arbitrators immunity from liability for acts or omissions performed in their capacity as arbitrators, except in cases of fraud or gross error. This provision would protect arbitrators from frivolous actions and encourage qualified professionals to serve, while maintaining accountability for serious misconduct.
Removal of requirement to deposit the award
The Draft Arbitration Law proposes removing the current requirement for arbitral tribunals to deposit the arbitral award with the court as a prerequisite to the award being enforceable. This change would remove a procedural hurdle that has caused practical difficulties to parties at the enforcement stage and would streamline the enforcement process.
Express reference to enforceability of awards issued from other venues
Article 63 of Draft Arbitration Law confirms the existing practice that awards that are issued in other venues are recognized and enforceable in Saudi Arabia. This provision would strengthen Saudi Arabia’s position as an arbitration-friendly jurisdiction and supports cross-border dispute resolution.
Express reference to parties’ agreement with respect to appointment of experts
Article 44 of the Draft Arbitration Law, which governs the appointment of experts, is not proposed to be changed significantly. However, it would now explicitly allow either party to appoint its own expert to respond to the expert appointed by the arbitral tribunal.
A sub-article has also been added regarding the fees of tribunal-appointed experts, stating that such fees shall be borne by the parties as determined by the tribunal. That said, the article does not address the costs of party-appointed experts or whether such costs may be recoverable from the losing party; that is an issue we have proposed be clarified.
Regulation of interim and conservatory measures
The Draft Arbitration Law elaborates on the existing authority of the tribunal to order interim and conservatory measures. It allows parties to agree to empower the arbitral tribunal to order such measures and specifically lists examples, including orders to preserve evidence, safeguard assets, or prevent harm. It also outlines the conditions required for issuing these orders, such as the likelihood of irreparable harm if the order is not granted in a timely manner.
Areas for further refinement
While the draft is largely aligned with international practices, some provisions may warrant reconsideration:
Casting vote in case of deadlock
Under Article 39 of the current law, if the tribunal fails to reach a majority decision, a casting arbitrator may be appointed through specific procedures, either by the tribunal or the competent court. Article 48 of the Draft Arbitration Law now proposes that, in the absence of a majority, the chair-arbitrator shall issue the award.
This effectively would give the chair-arbitrator power to make a unilateral decision on the substantive dispute. We have proposed this provision be reconsidered, as it may undermine the role of the co-arbitrators and disproportionately empower the presiding arbitrator.
Clarification on asymmetrical arbitration clauses
The Draft Arbitration Law does not clarify whether asymmetrical arbitration clauses—where one party has the option to litigate while the other is bound to arbitrate—are permissible. These clauses are common in international practice, particularly in finance and technology agreements, and their enforceability can significantly impact party autonomy and risk allocation. We have proposed that the Draft Arbitration Law, or its future revisions, explicitly address this issue to provide certainty for parties and align with best international practices.
Court-appointed arbitrator selection
Article 32(1) of the Draft Arbitration Law refers disputes over arbitrator appointment to the competent court when the parties fail to agree on the appointment. However, the article does not specify the criteria or considerations the court should apply when making such appointments.
We have proposed that the Draft Arbitration Law clarify that the court should take into account any preferences or qualifications submitted by the parties, as well as the nature and complexity of the dispute, when selecting an arbitrator.
Court jurisdiction over interpretation of awards
Article 59(2) of the Draft Arbitration Law provides that if one of the three arbitrators becomes unavailable, the remaining arbitrators are not permitted to consider requests for interpretation, correction, or completion of the award. In such cases, jurisdiction shifts to the competent court. This approach may not be suitable for the parties, as the court may lack the same familiarity with the case details and may not reflect the parties’ original intention to have the dispute resolved by their chosen arbitrators (even if one becomes unavailable).
We have proposed reconsidering this provision to allow the remaining arbitrators to handle such post-award requests, ensuring continuity and respecting party autonomy.
Next steps
The issuance of laws in Saudi Arabia follows a structured process. Draft laws are generally published pursuant to Council of Ministers Resolution No. (713) dated November 3, 1438H (corresponding to November 27, 2016), which requires that draft laws related to economic matters be published on the Istitlaa platform for public consultation. Now that the public consultation period has closed, the draft legislation will be reviewed by the relevant government authorities, which include the Shura Council and the Council of Ministers.
This multi-stage review ensures that proposed laws are thoroughly considered before formal approval and enactment. Given the national initiative to reform arbitration, it is anticipated that the Draft Arbitration Law will continue to progress through these stages in a timely manner.
Stakeholders, including A&O Shearman, have submitted comments for consideration, and it is hoped that these contributions will help inform the final text of the law.
