SAUDI ARABIA Law and Practice Contributed by: Zeyad Khoshaim, Abdullah Alajlan and Kamil Mehiz, Khoshaim & Associates
2. Governing Legislation 2.1 Governing Law
nomic cities and special economic zones, increasing their appeal to both local and international investors. While less established than the SCCA, the Saudi Sports Arbitration Center is gaining traction. Cre - ated to handle disputes within the sports sector, it is becoming increasingly relevant due to Saudi Arabia’s substantial investments in sports, including football. Although it is still developing its presence and capabil - ities, the Sports Arbitration Center is aligned with the Kingdom’s growing focus on sports. In January 2025, the Saudi Sports Arbitration Center and the Ministry of Justice announced that awards issued by the Center will be considered enforcement instruments (capable of being enforced directly at the Enforcement Court) without the need for an order of enforceability to be issued by the Appeal Court. 1.4 National Courts There is no single court designated for all matters aris - ing from arbitration agreements. Instead, the appeal court that would have had juris - diction without an arbitration agreement will handle disputes related to both international and domestic arbitrations (eg, the Appeal Labour Court for labour disputes and the Appeal Commercial Court for com - mercial disputes). For international commercial arbitration conducted within the Kingdom or abroad, Article 7 (2) of the Saudi Arbitration Law, issued under Royal Decree No (M/34) dated 24/05/1433H (16 April 2012 AG), specifies that the territorial jurisdiction would be for the relevant Court of Appeal in Riyadh, unless the parties agree on another Court of Appeal within the Kingdom. Typically, the Commercial Court, particularly its appeal circuits, handles most arbitration cases, as most disputes arise from commercial relationships. However, there are specialised courts dedicated to enforcement actions related to arbitral awards. The Enforcement Law, introduced by Royal Decree No M/78 dated 19/09/1428H (1 October 2007) (the “Enforcement Law”), marked a substantial shift in Saudi Arabia’s arbitration landscape by transferring enforcement proceedings from the Saudi Board of Grievances (BoG) to specialised enforcement courts.
Arbitration in the Kingdom of Saudi Arabia is gov - erned by the Arbitration Law, established by Royal Decree No. (M/34) dated 24/05/1433H (16 April 2012), which took effect on 8 July 2012, and its Implementing Regulations dated 22 May 2017 (the “Implementing Regulation”). The Arbitration Law is based on the UNICTRAL Model Law. The most notable difference between the Saudi Arbitration Law and the UNCITRAL Model Law is that the Saudi law includes references to Shari’ah princi - ples, specifically in Articles 5, 14, 25, 38, 50 and 55. 2.2 Changes to National Law There have been no significant changes to the Arbitra - tion Law in the past year. However, the introduction of the Civil Transactions Law (CTL), enacted by Royal Decree No. M/191 dated 18 June 2023, is expected to have a notable impact on the arbitration landscape in the Kingdom of Saudi Arabia. The CTL, which came into force on 16 December 2023, introduces a com - prehensive and codified framework for contract law and liabilities, which previously relied on Shari’ah principles that were not consolidated into a single code. By integrating these principles into one clear and comprehensive enactment, the CTL enhances legal predictability and consistency for both courts and arbitral tribunals. This new framework provides clearer guidelines and reduces ambiguity in contractual relationships, which is crucial for arbitration. International parties often seek predictable and transparent legal environments, and the CTL’s alignment with global commercial standards has likely made Saudi Arabia’s arbitration system more attractive. As a result, the CTL is likely to increase confidence among foreign investors and businesses, encouraging them to use arbitration more frequently in the Kingdom.
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