Saudi Center for Commercial Arbitration issues update on arbitration in Saudi Arabia

The Saudi Center for Commercial Arbitration (SCCA) has issued its 2026 Country Report on arbitration in the Kingdom as part of the forthcoming edition of the UNCITRAL Digest of Case Law on the Model Law on International Commercial Arbitration.

The report considers and analyses nearly 1000 judgments where the applicable law of the arbitration was the 2012 Saudi Arbitration Law and the seat of the arbitration was Saudi Arabia.

The report forms part of the Kingdom's contribution to international arbitration jurisprudence and provides essential insights for practitioners, investors, and policymakers engaging with Saudi arbitration.

A Transformation Driven by Vision 2030

The report places the development of Saudi arbitration within the broader transformative agenda of Saudi Vision 2030, launched in 2016. Within less than seven years, more than 2,700 legislative instruments have been enacted, amended, or reviewed by the Saudi government, alongside more than 970 further reforms. Legislative updates, judicial development, and sustained governmental support - combined with investments in automation, digitalization, and artificial intelligence - have collectively strengthened arbitration and alternative dispute resolution mechanisms in the Kingdom. As a Contracting State to the New York Convention since 1994 with a legal framework designed to be supportive of arbitration and a judiciary with a demonstrated record of neutral and arbitration-friendly decisions, Saudi Arabia now meets the three core criteria identified by the International Bar Association for selecting a stable seat of arbitration.

Arbitration-Friendly Judicial Practice

Perhaps the most significant takeaway from the report concerns the Kingdom's judicial track record. The study analysed 967 judicial decisions issued by Saudi Courts of Appeal between January 2023 and June 2025. Of 194 annulment applications filed during this period, 174 were rejected—a rejection rate of 89.7 percent. Only 20 annulment applications were granted, with full annulment ordered in just 12 cases (6.2 percent) and partial annulment in eight cases (4.1 percent).

When cumulative data from this study and four prior SCCA studies are considered together, the total number of judgments analysed exceeds 3,300 issued between 2017 and 2025. Of 565 annulment applications across this broader dataset, 518 were rejected, representing a 91.7 percent rejection rate. Annulment based on Sharia or public policy was limited to just 13 cases, or 2.3 percent. These figures demonstrate a consistent, arbitration-supportive judicial stance that confines the scope of judicial review and preserves the finality of arbitral awards.

Limited Judicial Intervention and Respect for Party Autonomy

Saudi Courts have consistently restricted their intervention to the circumstances expressly provided for in the Saudi Arbitration Law, with no rulings identified in which courts extended their supervisory role beyond these statutory limits. The report confirms clear and consistent alignment on the principles of competence-competence and the separability of the arbitration clause, with courts affirming that the invalidity, termination, or revocation of the underlying contract does not, in itself, affect the validity of the arbitration clause.

Regarding judicial review, courts adopt a limited standard of review that does not extend to reconsidering the merits of the dispute, reassessing the tribunal's interpretation of substantive law, or re-evaluating the evidence. Errors in the interpretation or application of law or in the assessment of facts do not, in themselves, constitute grounds for annulment. Courts have also recognized the validity of electronic notifications through text messages, similar applications, or email, reflecting a progressive approach aligned with international developments.

The Draft Arbitration Law: Toward Greater Modernization

The report also analyses the Draft Saudi Arbitration Law currently under consideration, revealing a clear legislative trajectory toward reducing formalities, accelerating procedures, strengthening institutional arbitration, and achieving closer alignment with international standards. Key features of the Draft Law include the removal of the requirement that a sole arbitrator or the chair of the tribunal hold a degree in Sharia or law, allowing parties greater flexibility to appoint technical experts. The Draft Law also expressly codifies arbitrator immunity, recognizes electronic means of service, including email and mobile phone, and introduces the concept of an emergency arbitrator.

Significantly, the Draft Law removes the default 12-month time limit for issuing a final award and introduces the power of courts to stay annulment proceedings for up to 60 days to allow tribunals to remedy defects, a mechanism closely mirroring the UNCITRAL Model Law. The Draft Law also explicitly codifies that arbitral awards shall have "res judicata effect" regardless of the country in which they are issued, and it permits appeals against both orders granting and those refusing enforcement.

A Narrow Approach to Public Policy and Sharia-Based Annulment

One of the most closely watched aspects of Saudi arbitration is the role of Sharia and public policy in annulment proceedings, and it receives thorough treatment in the report. The report finds that Saudi Courts adopt a highly restrictive approach, holding that a mere procedural or formal irregularity does not justify annulment unless it falls within the exhaustive grounds of Article 50 of the Arbitration Law. Public policy-based annulment has been confined to cases involving serious violations, such as the retroactive misapplication of statutory limitation rules or the recognition of contracts in breach of mandatory registration requirements. With only 2.3 percent of annulment applications across the broader dataset succeeding on Sharia or public policy grounds, the data should offer considerable reassurance to Saudi and foreign stakeholders alike.

Conclusion

The SCCA's report paints a picture of a jurisdiction that has moved decisively from a stage of national adaptation of international arbitration standards toward a more advanced phase of integration and harmonization with the global arbitration framework. For international practitioners and businesses, the key message is clear: Saudi Arabia's arbitration environment is characterized by predictable judicial oversight, respect for party autonomy, and a legislative agenda committed to continued modernization. As the Kingdom's Draft Arbitration Law progresses toward enactment, these trends are set to further solidify Saudi Arabia's position as a credible and competitive seat of arbitration on the world stage.