Saudi Arabia’s Draft Arbitration Law: Key Proposed Reforms Explained

Saudi Arabia’s arbitration framework has undergone rapid modernization over the past decade, driven by major legal reforms and the Kingdom’s ambition to become a global business and investment hub. In September 2025, the government released a Draft Arbitration Law for public consultation—marking the next major step in enhancing the efficiency, credibility, and international compatibility of arbitration in the Kingdom.

If enacted, this draft law would introduce several important reforms that affect foreign investors, Saudi companies, multinational businesses, and anyone entering commercial agreements involving the Kingdom.

This article breaks down the most significant proposed changes, explains their practical implications, and outlines how businesses should prepare.

Broader Arbitrator Qualifications

Under current rules, tribunals—especially presiding arbitrators—have historically faced qualification restrictions that limited party autonomy.
The draft law proposes removing these requirements, allowing parties to appoint any arbitrator who:

• is a natural person,
• has legal capacity,
• has no relevant criminal conviction,
• and is agreed upon by the parties.

What this means for businesses:
Companies gain more flexibility when selecting arbitrators with sector-specific expertise, international experience, or technical knowledge—all crucial in complex cross-border disputes.

Related Guide:
Arbitration vs Litigation in Saudi Arabia

Removal of the “Deposit of Awards” Requirement

One of the most meaningful reforms is the proposed elimination of the rule requiring arbitral awards to be deposited with the competent court before enforcement proceedings.

This administrative step has long been considered a procedural hurdle that creates unnecessary delays.

What this means:

• Faster enforcement
• Less administrative complexity
• Closer alignment with global arbitration standards
• Clearer path for foreign arbitral awards to be recognized under the Enforcement Law

Further Reading:
Foreign Arbitration Awards in Saudi Arabia

Explicit Arbitrator Immunity (Except in Fraud or Gross Error)

The draft law formally grants arbitrators immunity from liability arising from the performance of their duties—except in cases involving:

• fraud,
• intentional misconduct,
• or gross error.

This aligns Saudi Arabia with international arbitration norms and increases confidence among experienced arbitrators in accepting appointments within the Kingdom.

Why this matters:
Arbitrators are protected from frivolous claims, ensuring disputes proceed smoothly and without undue pressure.

Enhanced Interim Measures Framework

The draft law provides a clearer and more comprehensive system for issuing temporary and emergency measures. These include:

• protection of assets,
• preservation of evidence,
• prevention of imminent harm,
• and urgent orders required to maintain the status quo.

The draft also clarifies the tribunal’s power to enforce and modify these measures.

Practical impact:
Businesses gain stronger tools to prevent damage or asset dissipation during active disputes—an essential feature in cross-border commercial matters.

More on Dispute Strategy:
Saudi Business Dispute Resolution Guide

Recognition of Awards Issued Abroad

The draft law reinforces that awards issued in foreign seats remain enforceable in Saudi Arabia, consistent with:

• the New York Convention, and
• the Enforcement Law.

This clarity strengthens the Kingdom’s reputation as a pro-enforcement jurisdiction.

Alignment With Vision 2030 and the Investment Climate

Saudi Arabia’s ongoing economic transformation under Vision 2030 prioritizes:

• strengthening investor confidence,
• improving judicial efficiency,
• boosting international competitiveness, and
• promoting Saudi Arabia as a global hub for commerce and dispute resolution.

The Draft Arbitration Law directly supports these goals by reducing procedural burdens and elevating arbitration reliability.

Investor Resources:

• Foreign Investment in Saudi Arabia
• Best City for Foreign Investment in Saudi Arabia

🧭 How Should Businesses Prepare Now?

Although the law is still in draft form, now is the right time for companies to:

✔ Review existing arbitration clauses

Ensure your clauses are flexible enough to benefit from the upcoming reforms once enacted.

✔ Update governing-law and seat-of-arbitration strategies

Businesses operating in Saudi Arabia may wish to reconsider how they structure their dispute-resolution provisions.

✔ Reassess enforcement strategy

The removal of the award-deposit requirement could significantly shorten the enforcement timeline.

✔ Seek legal advice before entering new contracts

This is especially important for:

• foreign investors,
• joint ventures,
• shareholders’ agreements,
• franchise agreements,
• agency and distribution contracts.

Need help drafting or updating your contracts?
How to Draft Enforceable Commercial Contracts

🏛 How Our Firm Supports Clients

At Saad A. Alabbassi Law Firm, we assist local and international clients with:

• drafting arbitration clauses,
• reviewing cross-border contracts,
• enforcing foreign awards,
• representing clients before arbitration tribunals, and
• resolving commercial disputes through both arbitration and litigation.

We are monitoring the draft law closely and will update our clients as it progresses through the legislative process.

For tailored guidance or contract review, our team is ready to help.

Need help now? Book a free 30-minute consultation