Arbitration Law

1) Introduction:

Arbitration is an alternative dispute resolution method outside the traditional court system. It is known for its speed, confidentiality, and its ability to reduce the burden on the judiciary. The Kingdom of Saudi Arabia has developed a modern arbitration framework aligned with international principles and rooted in Islamic Sharia, thereby enhancing trust in the business and investment environment.

2) What is the Arbitration Law?

The Arbitration Law was issued under Royal Decree No. (M/34) dated 24/5/1433H. It governs the use of arbitration as an alternative to judicial proceedings and provides detailed provisions regarding the formation of the arbitral tribunal, the arbitration process, the issuance of awards, and their enforcement.

3) Types of Disputes Subject to Arbitration:

- Commercial disputes between companies

- Construction, real estate, and contracting disputes

- Disputes arising from partnerships, supply contracts, and commercial agency agreements

4) Conditions for a Valid Arbitration Agreement:

- The agreement must be in writing, either as a separate contract or a clause within the main agreement

- The parties must have legal capacity to enter into the agreement

- The subject matter of the dispute must be specified, while procedural details may be agreed upon later

- The arbitration agreement is binding and excludes recourse to courts

5) Arbitral Tribunal and Procedures:

- The tribunal may consist of one or more arbitrators (usually an odd number)

- Parties may appoint arbitrators directly or agree on an appointing authority

- Arbitrators must remain impartial and independent

- Proceedings are flexible and may be conducted virtually

- Disputes may be resolved based on statutory laws or international commercial practices as agreed by the parties

6) Authority and Enforcement of Arbitral Awards:

- Arbitral awards are binding on the parties

- Enforcement is carried out through the Enforcement Court after verifying legal compliance

- Awards are not subject to appeal, but may be challenged through annulment proceedings

7) Competent Authorities:

- Saudi Center for Commercial Arbitration: An independent institution offering institutional arbitration services and providing qualified arbitrators

- Court of Appeal: Reviews annulment claims against arbitral awards

- Enforcement Court: Issues enforcement orders for arbitral awards that meet legal conditions

- Ministry of Justice & Bureau of Experts: Oversee the development of executive regulations

8) Advantages of Arbitration:

- Speed: Shorter dispute resolution timeframe compared to courts

- Confidentiality: Private hearings and protection of reputational interests

- Flexibility: Ability to choose applicable law and procedures

- Expertise: Arbitrators with domain-specific knowledge

- International Enforceability: Awards may be enforced in foreign jurisdictions

9) Our Arbitration Services:

Our firm provides comprehensive arbitration services, including:

- Drafting professional and enforceable arbitration agreements

- Representing parties throughout arbitration proceedings

- Recommending qualified arbitrators with legal and commercial expertise

- Challenging unlawful arbitral awards

- Enforcing arbitral awards in Saudi Arabia or abroad

- Advising companies on incorporating arbitration clauses into contracts

10) Legal Advice & Call to Action:

Opting for arbitration is a strategic decision, especially for large-scale or international contracts. It is essential to draft arbitration clauses with precision to avoid disputes over validity or delays in enforcement.

📞 Contact us today for assistance in drafting, managing, or defending arbitration agreements—locally or internationally.