Saudi Arabia – A rising arbitral seat
New SCCA data suggests Saudi Arabia’s arbitration framework is maturing, with courts increasingly upholding awards and legislative reform aligning the Kingdom with global standards. An analysis by Antonia Birt, partner at Reed Smith.
Ask any arbitration lawyer operating in the Gulf about selecting a Saudi seat for arbitration, and the conversation has historically followed a familiar pattern. Enthusiasm about the commercial opportunity is tempered by caution about whether an award rendered in the Kingdom will withstand judicial scrutiny. That conversation is now being informed by new evidence. The empirical foundation for a reassessment has emerged.
For any jurisdiction seeking to attract foreign direct investment and cross-border trade, a credible arbitration framework is not merely a legal amenity; it is an economic necessity. International parties, whether investors, lenders, contractors, or joint venture partners, need confidence that their contractual rights will be enforced fairly and predictably if disputes arise. Arbitration, particularly institutional arbitration under internationally recognised rules, provides that confidence by offering a neutral forum, specialist decision-makers, and awards capable of enforcement across borders. Countries that can demonstrate a track record of judicial respect for arbitral awards send a powerful signal to the global business community: commercial commitments will be treated seriously, and disputes will be managed within a framework that international actors understand. Saudi Arabia, with its vast and rapidly diversifying economy under Vision 2030 and its ambition to become a global hub for investment and commerce, therefore has a clear strategic interest in demonstrating that its legal infrastructure meets international expectations.
THE REPORT
On July 1, 2026, the Saudi Center for Commercial Arbitration (SCCA) released a comprehensive country report on arbitration in Saudi Arabia. Commissioned in response to an invitation from the UNCITRAL Board of Editors for the revision of the Digest of Case Law on the Model Law, it represents the most thorough, data-driven assessment of the Kingdom’s arbitral landscape ever produced. Built on a dataset of 967 appellate decisions spanning January 2023 to June 2025, and contextualised against a cumulative body of more than 3,300 judgments handed down since 2017, the report provides a detailed and data-rich account of the current state of play that warrants close attention from practitioners.
For practitioners across the Middle East, the report’s most consequential contribution is its treatment of annulments of arbitral awards. The perception that Saudi courts are hostile to arbitral awards, or that they might deploy Sharia and public policy as broad, unpredictable bases for setting them aside, has long shadowed the Kingdom’s standing among international arbitration users. The SCCA’s data addresses that perception directly. During the 2023–2025 study window, 90 per cent of annulment applications brought before the Courts of Appeal failed. Complete annulment was ordered in only 12 instances, and partial annulment in a further eight. Measured against the cumulative record since 2017, the figures are broadly consistent: of 565 applications across five successive SCCA studies, 518 were dismissed, yielding a rejection rate in excess of 91 per cent. That trajectory is also improving year on year.
These figures deserve to be placed in comparative context. They are broadly comparable to the annulment statistics published by established Model Law jurisdictions globally. The Reed Smith International Arbitration Report 2025, which conducted a comparative survey of leading arbitral seats worldwide, confirmed that applications to set aside awards are overwhelmingly unsuccessful across all surveyed jurisdictions, and noted that the Middle Eastern seats examined (the UAE and Bahrain) exhibited some of the lowest success rates for annulment internationally.
The specific grounds that have most concerned the international market are Sharia and public policy. In the most recent study period, Sharia served as the basis for annulment in a single case out of 194 applications, a rate of just 0.5 per cent, and even in that instance the court relied concurrently on public policy and procedural grounds. Public policy succeeded in only three cases, each rooted in discrete procedural deficiencies rather than any expansive or unforeseeable invocation of Islamic legal principles. When the lens widens to the full eight-year period, Sharia and public policy together account for annulment in only 13 out of 565 applications — a rate of 2.3 per cent. The circumstances are identifiable and confined: retroactive application of limitation periods in conflict with settled policy, recognition of unregistered leases contrary to a Council of Ministers decision, delay penalties amounting to interest prohibited under Sharia, and awards of fees made absent a party’s request. These are identifiable and discrete instances that may assist practitioners in assessing and managing risk.
Beyond annulment rates, the report describes a judicial framework that has developed considerably. The Saudi appellate courts have adopted the principle that their role does not extend to re-examining the substantive conclusions of arbitral tribunals. Mistakes in the application of law or in the evaluation of evidence are not treated as grounds for setting aside an award. The enumerated grounds under Article 50 of the Saudi Arbitration Law of 2012 are applied as a closed list, mirroring the approach taken in other established Model Law jurisdictions. There is also an embrace of procedural modernity: electronic notifications by text message, mobile application, and email have been affirmed as valid, with the evidentiary burden shifting to the recipient to demonstrate non-receipt.
LOOKING AHEAD
If the backward-looking data provides reassurance, the forward-looking dimension of the report is also noteworthy. The SCCA’s analysis includes a detailed textual comparison between the UNCITRAL Model Law, the existing Saudi Arbitration Law, and the Draft Arbitration Law published for public consultation at the end of 2025. That Draft represents a deliberate and far-reaching step towards fuller harmonisation with international standards, while preserving features adapted to the local legal context.
Several reforms merit particular attention. The Draft removes the longstanding requirement that a sole or presiding arbitrator hold a degree in Sharia or law: a change that will significantly widen the pool of candidates available for international proceedings. Nationality restrictions are also lifted unless the parties expressly agree otherwise. The Draft also introduces express statutory codification of arbitrator immunity, except in cases of fraud or gross professional misconduct, placing the Kingdom alongside England, France, and Singapore in this regard.
The Draft also provides, for the first time, express statutory recognition of emergency arbitrators, together with an expanded framework for interim and precautionary relief, including measures to preserve the status quo, prevent harm, and safeguard assets or evidence. Where a party fails to comply, recourse to the competent court is available.
On enforcement and finality, the Draft contains further notable provisions. It introduces a remission mechanism drawn from Article 34(4) of the Model Law, permitting courts to stay annulment proceedings for up to 60 days to allow the tribunal to remedy defects relating to the form of the award.
PRACTICAL IMPLICATIONS
What does all of this mean in practice for those of us advising clients with interests in or connected to the Kingdom? The implications are concrete. Seat selection discussions should now be informed by the empirical record rather than inherited caution. For disputes with a Saudi nexus, the combination of a judiciary whose track record on enforcement has strengthened, the SCCA’s institutional infrastructure, and a legislative environment converging with global best practice merits serious consideration. Arbitration clauses should be drafted with precision: the cases where annulment has succeeded are instructive. Well-crafted agreements that address appointment mechanisms, notification procedures, and scope will further reduce residual risk. And while Sharia-based annulment is demonstrably rare, the prudent approach remains to structure claims for relief in a manner that avoids engaging well-known prohibitions.
The SCCA’s report characterises the trajectory as follows: Saudi Arabia has progressed from national adaptation of the Model Law to a more advanced phase of integration and harmonisation with the global arbitration framework.
For international investors, financiers, and commercial parties evaluating the Kingdom as a destination for capital and partnership, the significance of the SCCA’s findings extends well beyond legal technicality. A jurisdiction in which arbitral awards are upheld in the substantial majority of cases, the grounds for judicial intervention are narrow and predictable, and legislative reform is actively converging with global standards is a jurisdiction that reduces the risk premium attached to cross-border transactions. Confidence in dispute resolution lowers the cost of doing business, encourages longer-term commitments, and supports the deeper economic integration that Vision 2030 seeks to achieve. The report is, in that sense, a valuable addition to the growing body of empirical literature on arbitration in the region. Its findings provide a basis for international participants to assess Saudi Arabia against the evidence of how its courts and institutions now operate, rather than relying solely on earlier perceptions.
Text by:
Antonia Birt, partner, Reed Smith LLP, Dubai
