What is the Saudi arbitration law, and does it let you settle a business dispute outside court?
The Saudi arbitration law lets parties send a dispute to private arbitrators instead of a court, but only if they follow the formal rules of the Arbitration Law (Royal Decree No. M/34 of 1433H) and its Executive Regulations. The most important rule is simple: the arbitration agreement must be in writing, or it is void. If the agreement is valid, the award has the force of a final judgment and can be enforced through the courts.
This guide explains how arbitration works in practice, who can use it, how long it usually takes, how an award is challenged or enforced, and what to check before you sign an arbitration clause. It is written for business owners, investors and individuals who deal with Saudi contracts.
Do you have a contract with an arbitration clause, or a dispute you think belongs in arbitration? You can send a short summary on WhatsApp and the Al-Safwa Law Firm team will review the clause and the stage of the dispute in confidence before you take any step.
Table of Contents
Saudi arbitration law at a glance
The table below summarises the core rules of the Arbitration Law that most parties need to know.
| Topic | What the Law says | Reference |
|---|---|---|
| Governing text | The Arbitration Law, issued by Royal Decree No. M/34 dated 24/5/1433H, with its Executive Regulations | Royal Decree M/34 |
| Form of the agreement | The arbitration agreement must be in writing, otherwise it is void | Article 9 |
| Number of arbitrators | One or more, but always an odd number, otherwise the arbitration is void | Article 13 |
| Arbitrator qualifications | Full capacity, good conduct and at least a university degree in Sharia or law | Article 14 |
| Time to issue the award | If the parties set no deadline, 12 months from the start of the proceedings, with an extension of up to six months possible | Article 40 |
| Challenging the award | No appeal; the only route is an annulment action filed within 60 days of notice of the award | Articles 49 and 51 |
| Enforcement | The competent court, or its delegate, issues an enforcement order | Article 53 |
What is an arbitration agreement under the Saudi arbitration law?
An arbitration agreement is a deal between two or more parties to refer specified disputes to arbitration instead of the court. It usually takes one of two forms:
- An arbitration clause inside a contract, such as a supply, construction, agency or partnership contract. It covers disputes that may arise later.
- A separate submission agreement signed after the dispute has already started. In this case, the agreement should describe the disputed issues clearly.
Either way, Article 9 of the Saudi arbitration law requires writing. A verbal promise to arbitrate, even if both sides remember it, does not meet the requirement. In practice, a signed contract is the safest proof. Written exchanges, including electronic ones, can also show agreement if they clearly record that both sides accepted arbitration.
Which disputes can go to arbitration in Saudi Arabia?
The Law applies to arbitration held in the Kingdom, and to international commercial arbitration held abroad if the parties choose to be governed by it. It does not apply to personal status matters or to matters that cannot be settled by compromise. That means family disputes and similar matters stay with the courts.
In practice, arbitration is most common in commercial and financial disputes, such as:
- Construction and contracting disputes
- Agency, distribution and supply contracts
- Shareholder and partnership disagreements
- Financing and banking disputes
- Service and technology contracts
If your dispute involves a company contract or a commercial claim, a commercial lawyer can read the contract first and tell you whether the clause is valid and which forum applies. For lending and finance conflicts, see our page on banking and finance disputes.
Who can agree to arbitration?
Only a person or company with legal capacity to deal with the right in dispute can agree to arbitration. Government bodies are treated differently. Under Article 10, a government entity may agree to arbitration only with the approval of the Prime Minister, unless a special statute allows it. If you are contracting with a public body, check this point before you rely on an arbitration clause.
How does arbitration work in Saudi Arabia, step by step?
The exact steps depend on what the parties agreed and on the rules of any arbitration centre they chose. The usual path looks like this:
- Check the clause. Confirm that the agreement is written, covers your dispute and names the rules, seat and language, if any.
- Send the request for arbitration. The request normally sets out the parties, the contract, the facts, the claims and a proposal for the arbitrators.
- Form the tribunal. The tribunal has one arbitrator or an odd number of arbitrators. If the parties cannot agree on appointment, the Law gives a role to the competent court.
- Agree the procedure. The parties may agree on the procedure, the seat of arbitration (inside or outside the Kingdom) and the language. Unless the tribunal or the parties choose another language, the arbitration is conducted in Arabic.
- Exchange memoranda and hold hearings. Each side submits its case and evidence. The tribunal may allow experts where the dispute needs technical input.
- Receive the award. The tribunal issues a written award. Article 43 requires it to give each party a copy within 15 days, and the award is then deposited with the competent court.
Two points deserve attention. First, the tribunal can decide objections to its own jurisdiction, including objections that the agreement is missing or invalid. Second, if the parties agree, the tribunal may order interim or protective measures during the case. For a first look at how to prepare your side, see our guide to drafting a statement of claim, which uses similar building blocks.
Institutional or ad hoc arbitration: which is better?
Parties can run arbitration themselves (ad hoc) or through an institution. The Saudi Center for Commercial Arbitration (SCCA) is a well-known institution in the Kingdom. An institution brings ready rules, administrative support and a way to handle appointments and challenges. Ad hoc arbitration gives more freedom but needs a carefully drafted clause, because gaps can delay the case.
The choice should be made when the contract is written, not after the dispute starts. Our team can help with this through contract drafting.
How long does arbitration take under the Saudi arbitration law?
If the parties did not agree on a deadline, Article 40 requires the award within 12 months from the start of the proceedings. The tribunal may extend this period by up to six months. If the parties agreed on rules or a different deadline, those terms apply as long as they are consistent with the Law.
These are legal limits, not promises about how fast your case will move. A simple documentary dispute can finish well inside the period. A complex construction case with experts may use all of it.
Can you challenge an arbitration award in Saudi Arabia?
Under Article 49, arbitral awards cannot be appealed through the ordinary appeal routes. The only way to attack an award is an action to annul it. Key points:
- Deadline: The annulment action must be filed within 60 days from the date the party is notified of the award (Article 51).
- Grounds: Article 50 lists the grounds. One example is that there was no arbitration agreement or that the agreement was invalid. The court may also act on its own if the award violates Sharia or public order.
- No automatic stay: Filing an annulment action does not by itself stop enforcement of the award (Article 54). A party who wants a stay must ask the court for it.
Annulment is a legal check on the process and the award. It is not a second hearing of the whole dispute. For that reason, the 60-day deadline is strict, and a missed deadline is hard to fix.
How is an arbitration award enforced?
An award issued under the Law has the force of a final judgment and is enforceable (Article 52). To enforce it, the winning party applies to the competent court, which issues an enforcement order (Article 53). The request is accepted only after the period for filing an annulment action has passed (Article 55). The court also checks that the award does not conflict with a Saudi court ruling and does not violate Sharia or public order.
After the order is issued, collection follows the enforcement procedures in the Kingdom. If the other side does not pay, an enforcement court lawyer can help with the execution file and the available measures. If your main goal is recovering a debt, read our guide on recovering money in Saudi Arabia.
Is a new Saudi arbitration law coming?
A draft law to replace the current Arbitration Law has been circulated for public consultation. A draft is not law. Until a new law is officially issued and comes into force, the Arbitration Law of 1433H and its Executive Regulations remain the text to follow. Before you rely on any rule in this guide for a live dispute, confirm the current status on the Experts Commission portal listed below.
Common mistakes in arbitration clauses
- Relying on an oral or unclear agreement. Without writing, the agreement is void.
- Choosing an even number of arbitrators. Two arbitrators, for example, makes the arbitration void.
- Leaving out the seat, language or rules. Gaps lead to side disputes before the real case starts.
- Naming an arbitrator who does not meet the qualifications. The Law requires capacity, good conduct and a degree in Sharia or law.
- Missing the 60-day annulment deadline. It runs from notice of the award.
- Ignoring government approval. A public body generally needs the Prime Minister’s approval to agree to arbitration.
Frequently Asked Questions about the Saudi arbitration law
Is arbitration legal in Saudi Arabia?
Yes. The Arbitration Law, issued by Royal Decree No. M/34, regulates arbitration in the Kingdom. It sets rules for the agreement, the tribunal, the procedure, annulment and enforcement.
Does an arbitration agreement have to be in writing?
Yes. Article 9 states that the arbitration agreement must be in writing, otherwise it is void. A clear signed clause in the contract is the safest way to meet this rule.
Can foreigners and foreign companies use arbitration in Saudi Arabia?
The Law is not limited by nationality. The parties can agree on the seat of arbitration inside or outside the Kingdom and can choose a language other than Arabic. Whether the Law applies to arbitration held abroad depends on the agreement and the type of dispute, so it is best to review the clause first.
How long does arbitration take in Saudi Arabia?
If the parties set no deadline, the award is due within 12 months from the start of the proceedings, and the tribunal may extend this by up to six months. The real duration depends on the complexity of the case and the agreed rules.
Can an arbitration award be appealed?
No. Awards cannot be appealed through ordinary appeal routes. The only challenge is an annulment action, which must be filed within 60 days from notice of the award and does not automatically stop enforcement.
Can family or personal status disputes go to arbitration?
No. The Law does not apply to personal status matters or to matters that cannot be settled by compromise. These disputes are handled through the courts.
This guide covered the Saudi arbitration law from the first written clause to the enforcement order: what the agreement must contain, how the tribunal is formed, how long the process can last, and how an award is annulled or enforced. If you have a real contract or dispute, contact us through the WhatsApp button at the bottom of the screen.
Sources:
- Arbitration Law – Experts Commission at the Council of Ministers (Arabic)
- Executive Regulations of the Arbitration Law – Experts Commission (Arabic)
- Arbitration Law – Ministry of Justice Legal Portal (Arabic)
- Saudi Center for Commercial Arbitration (SCCA)
A legal advisor holding a Bachelor’s degree in Law from the prestigious Cairo University. He possesses extensive experience spanning over 25 years in criminal, civil, and family law, during which he has achieved notable accomplishments that have solidified his reputation as a valuable asset to any legal team
