Saudi Arabia publishes draft of new arbitration law for public consultation

On 24 September 2025, the Kingdom of Saudi Arabia published a first draft of its new arbitration law (the "Draft Law"), inviting feedback and consultation from industry participants until 24 October 2025. The Draft Law follows a June 2025 resolution of the Saudi Arabian Council of Ministers, which, among other things, promised a review of the current arbitration law in force in the Kingdom.

While the Draft Law represents a significant departure from the current law, we have identified the below key additions (and one notable exclusion) that ought to be of interest and comfort to international stakeholders:

• Article 11 of the Draft Law provides that the arbitration clause is to be governed by the law chosen by the parties or, in the absence of agreement, by the law of the seat. This is a welcome change from the existing law, which provides at Article 25(2) that in the absence of agreement, the tribunal is permitted to adopt any procedures it deems appropriate.
• Article 20 of the Draft Law requires that any arbitrator be a natural person of full capacity, who is not deprived of exercising civil rights as a result of any criminal sentence. This offers greater flexibility in arbitrator selection than the current law, which requires (under Article 14) that an arbitrator needs to hold a university degree in Sharia or law (or where the tribunal is made up of more than one person, only the chairman needs to satisfy this requirement). Accordingly, it seems that the new arbitration law, once implemented, will permit parties to appoint sole arbitrators, or entire three member tribunals, from non-legal backgrounds.
• Article 20 of the Draft Law also expressly permits parties to agree that arbitrators must be of a particular nationality, whereas the current law is silent on this issue. ​​
• Article 27 of the Draft Law introduces express new protections for arbitrators, confirming that liability to the parties will be restricted to cases of fraud or 'serious professional error'. The current law is silent on this issue, and this inclusion therefore ought to provide comfort to those asked to sit as arbitrators in disputes seated in the Kingdom.
• Article 28 of the Draft Law introduces the principle of kompetenz-kompetenz, allowing Saudi seated tribunals to rule on their own jurisdiction (such as in respect of the existence, validity or scope of the arbitration agreement pursuant to which they are appointed). This widely adopted principle is notably absent from the current law and its inclusion in the Draft Law represents a significant step towards alignment with international standards.
• Article 52 of the Draft Law explains the requirements for issuance and signing of awards by arbitral tribunals, including provision for arbitrators to sign from outside the Kingdom and by means of electronic signature. This ought to offer greater certainty than existing signature requirements under Article 42 of the existing law, which is silent on such issues.
• While Article 10 of the current law prohibits government bodies from entering into arbitration agreements without the express approval of the Prime Minister or authority derived from statute, the Draft Law contains no such prohibition. It is not clear whether such a provision will be added in the final version of the new law and, if not, whether this will result in any practical change in the process of agreeing arbitration with a government entity.

While the Draft Law is largely in line with international best practice for modern arbitration laws, it is worth noting that the current law's deference to Islamic Sharia remains firmly in place, with party autonomy permitted insofar as it does not contravene Sharia principles. It is possible that this may continue to be perceived as a risk by international parties, despite SCCA statistics signalling that genuine challenges to awards based on Sharia are rare and unlikely to succeed.

Upon its publication, the new Saudi arbitration law will replace the current law introduced in 2012 and implemented in 2017. While the new law is not yet settled, and remains open for consultation, this first draft indicates that arbitration in Saudi Arabia is poised to take a further step towards uniformity with international best practice and closer alignment with the UNCITRAL Model Law.