SAUDI ARABIA Law and Practice Contributed by: Zeyad Khoshaim, Abdullah Alajlan, Kamil Mehiz and Sarah Sedky, K&A
judgments and arbitral awards, streamlined asset disclosure procedures, and enhanced enforcement mechanisms. This is expected to further strengthen the enforcement of arbitral awards in the Kingdom. Second, the National Competitiveness Centre has recently published a Draft Arbitration Law for pub - lic consultation. If enacted, the Draft Arbitration Law would replace the current Arbitration Law and its Implementing Regulations. It proposes several impor - tant reforms, including: • clearer rules on the law governing arbitration agreements; • greater flexibility in arbitrator qualifications; • provisions on arbitrator immunity; • recognition of electronic notices and signatures; • the use of remote hearings; • immediate court review of certain jurisdictional rul - ings; and • expanded provisions on joinder, consolidation, interim measures and the enforceability of interim and partial awards. These proposed reforms reflect the Kingdom’s ongo - ing efforts to modernise its arbitration framework and further align it with international best practice. The Civil Transactions Law, which came into force on 16 December 2023, also remains relevant to arbitra - tion practice. By codifying key principles of contract and civil liability, it continues to enhance predictability for courts, arbitral tribunals and parties involved in disputes governed by Saudi law.
agreement must clearly specify the matters/issues it covers, or it would be deemed void. • A written arbitration agreement can be in the form of: (a) a document issued by both parties; (b) an exchange of documented correspondence; (c) telegrams; or (d) other electronic or written means of communi - cation. • A reference to an arbitration clause in a contract or any document, or to the provisions of a model contract, international convention or similar docu - ment, will also be considered a valid arbitration agreement if the reference clearly incorporates the clause into the contract. Furthermore, under Article 10 of the Saudi Arbitration Law, the individual entering into the agreement must have the legal capacity to bind the party they repre - sent to arbitration. Article 10 (2) of the Saudi Arbitration Law stipulates that government bodies can enter into arbitration agreements only with the approval of the Prime Min - ister, unless a specific legal provision allows other - wise. Subsequently, the Government Tenders and Procurement Law (the “GTP Law”), enacted by Royal Decree No M/128 on 13/11/1440H (corresponding to 16 July 2019), and its Implementing Regulations issued by Minister of Finance Resolution No 1242 on 21/031441H (corresponding to 19 November 2019), which took effect on 1 December 2019, updated this requirement. Under Article 92 (2) of the GTP Law, gov - ernment entities can now enter into arbitration agree - ments with prior approval from the Saudi Minister of Finance. Article 154 of the Implementing Regulations of the GTP Law outlines additional requirements for govern - ment entities agreeing to arbitration: • arbitration applies only to contracts valued over SAR100 million, subject to adjustment by the Min - ister of Finance; • arbitration must occur in Saudi Arabia, adminis - tered by the SCCA or another licensed centre, and governed by Saudi Arabian law;
3. The Arbitration Agreement 3.1 Enforceability
Under Article 9 of the Saudi Arbitration Law, an arbi - tration agreement must be in writing to be valid and enforceable. While this is the primary requirement, other rules may impact its validity, as outlined below. • The arbitration agreement can be made either before or after the dispute arises, including when the dispute is already before a court; however, if the dispute is already before a court, the arbitration
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