Saudi arbitration goes global
Saudi Arabia’s sweeping legal reforms and investment in arbitration infrastructure are positioning Riyadh as a rising international hub for commercial dispute resolution. A commentary by Pillsbury and AlArfaj & Partners.
Saudi Arabia is in the midst of an ambitious economic and legal transformation as it attempts to modernise rapidly and pivot away from reliance on hydrocarbons and towards renewables, tech and other areas. Its Vision 2030 programme, launched in 2016, has triggered one of the most significant infrastructure and construction booms in modern history, with the Kingdom forecast to become the world’s largest construction market by 2028. With more than USD1.3 trillion in announced projects as at the end of September 2024 (as calculated by the real estate consultancy group Knight Frank in August 2025) and USD164 billion in contracts awarded, Saudi Arabia has become a magnet for international contractors, consultants and investors.
Delivering a programme of this scale and complexity requires more than capital and technical capability. It requires legal clarity, both in the way contracts are structured and in how disputes are resolved.
Over the last few years, Saudi Arabia has made considerable strides to modernise its legal framework and upgrade its dispute resolution infrastructure. As the pace of development accelerates, these changes seek to transform the country into a serious contender among international arbitration centres.
A MODERN CIVIL CODE FOR A MODERN ECONOMY
One of the most important legal developments is the enactment of the Saudi Civil Transactions Law (“CTL”), Saudi Arabia’s first comprehensive civil code, which came into force in December 2023. Historically, Saudi law has relied on Shari’ah principles as interpreted by the courts. The CTL makes a significant shift by codifying many of these principles into a unified legal framework, with the goal of providing greater clarity, predictability and consistency in the application of transactions law across the Kingdom.
The CTL brings greater clarity to the formation, performance and termination of contracts. It introduces detailed provisions for specific types of agreements including construction contracts. By reducing judicial discretion and providing a codified baseline for contractual interpretation, the CTL is expected to enhance commercial predictability, a key concern for foreign investors unfamiliar with uncodified Shariah jurisprudence.
The CTL also complements other legislative reforms, including the new Investment Law, the Evidence Law, the Enforcement Law, and the Arbitration Law with its amended implementing regulations. The Arbitration Law provides a modern framework for resolving disputes in line with international standards, emphasising party autonomy, procedural flexibility, and judicial support for arbitral proceedings in the Kingdom. The Enforcement Law further strengthens this framework by enabling the recognition and enforcement of international arbitration awards issued under conventions to which Saudi Arabia is a party.
The Saudi Government Tenders and Procurement Law (“GTPL”), revised in 2019, permits arbitration involving public entities (subject to approval by the Saudi Minister of Finance), which opens the door to private contractors resolving disputes with state-linked project owners via arbitration.
In a further move to align with international best practice, Saudi Arabia acceded to the UN Convention on Contracts for the International Sale of Goods (“CISG”) in 2023, which entered into force for Saudi Arabia on September 1, 2024. The CISG establishes uniform rules governing international sale contracts and will support smoother cross-border commerce, especially in supply chains serving Saudi mega-projects.
DISPUTES ON THE RISE
The SCCA has reported a substantial and consistent increase in new case filings, ranging from 67 per cent in 2022, 64 per cent in 2023 and 30 per cent in 2024.
The case load is diverse. According to the SCCA’s 2024 Annual Report, 13 industries are represented, including construction (38 per cent), professional services (18 per cent), employment and labour (13 per cent), capital markets and investment (8 per cent) and agriculture (4 per cent), as well as commerce, trade and retail; real estate; telecommunications; life sciences and healthcare; shipping and logistics; and media.
The SCCA also has an international reach: users of 28 nationalities have featured across cases registered since its establishment in 2014.
Unsurprisingly, Saudi Arabia’s legal reforms are a response to this growing volume of disputes. As the number, size and technical complexity of Saudi projects increase, so too does the number of disputes.
While disputes of this kind are inevitable in any dynamic market, Saudi Arabia has responded by seeking to enhance the reliability and efficiency of commercial dispute resolution both to reassure foreign contractors and to support the long-term credibility of Saudi Arabia as a destination for investment.
A REVITALISED ARBITRATION FRAMEWORK
The 2012 Saudi Arbitration Law marked a milestone in Saudi Arabia’s alignment with global arbitration standards. Modelled on the UNCITRAL Model Law, it repealed the previous arbitration law issued in 1983 and supplemented in 1987, and introduced fundamental procedural improvements, such as allowing party autonomy in choosing institutional rules and the juridical seat of the arbitration, which is important for such matters as rights of appeal, court intervention in the arbitral process, availability of interim relief and enforceability, as well as clarifying the role of the courts.
The Saudi Arbitration Law was reinforced in 2013 by the Saudi Enforcement Law, which created a specialist enforcement court system and procedures to recognise both foreign and domestic arbitral awards. This marked a turning point from enforcement under the earlier regime, which was viewed as unpredictable and subject to concerns that enforcement might be in the hands of a judge unfamiliar with the process.
THE ROLE OF THE SCCA
A cornerstone of Saudi Arabia’s dispute resolution strategy is the Saudi Centre for Commercial Arbitration (“SCCA”), established in 2014. The SCCA administers both domestic and international arbitrations and aims to be the region’s premier arbitration centre by 2030.
In May 2023, the SCCA issued a revised set of Arbitration Rules designed to reflect global institutional standards. These include:
- early determination of claims (Article 26);
- an emergency arbitrator mechanism (Article 7);
- expedited procedures for certain claims (Appendix II);
- consolidation and joinder provisions (Articles 11 and 13 respectively); and
- express encouragement for the use of technology in arbitration (Introduction and Article 25).
The SCCA has also established an independent court to handle administrative issues and has opened offices in Riyadh, Jeddah and Dubai.
In 2024, the Chartered Institute of Arbitrators (Ciarb) launched a branch office in Saudi Arabia, further enhancing arbitration capacity and capability in the Kingdom and providing additional training and accreditation opportunities for local practitioners.
IS IT WORKING?
Recent statistics suggests the reforms are having a positive impact.
According to the most recent SCCA study of arbitration-related decisions of the Saudi courts between 2017 and 2022, over 92 per cent (120 out of 131) motions to annul awards were denied, and only seven of the 11 successful motions were granted in full. The Saudi Minister of Justice 2024 figures also showed that, of the 4,000 applications to annul arbitration awards, only 10 per cent had been granted.
Even more encouraging is the speed of enforcement. In 2021, the Saudi courts enforced 204 domestic and foreign awards, totalling USD2.1 billion, with most enforcement applications resolved within two weeks. This compares favourably to enforcement timelines in jurisdictions such as England or Singapore and demonstrates a material shift from past perceptions of unpredictability.
CAN RIYADH RIVAL LONDON AND SINGAPORE?
Can Saudi Arabia realistically challenge established arbitration hubs such as London or Singapore?
London has long been dominant in international arbitration, particularly for common law disputes and sectors such as energy, construction and shipping. The English courts are highly regarded for their commercial acumen and non-interventionist stance towards arbitration. London also benefits from the English language advantage and deep bench of independent arbitrators and counsel.
Singapore has positioned itself as Asia’s leading arbitration seat, with the Singapore International Arbitration Centre (“SIAC”) challenging London as the most preferred seat according to the 2025 Queen Mary University International Arbitration Survey.
With MENA parties accounting for 11 per cent of the LCIA’s case load and 6.2 per cent of SIAC’s, the SCCA will be hoping to position itself as the preferred forum for MENA-related disputes.
Saudi Arabia’s value proposition as an arbitral seat differs: it does not aim to replace these hubs outright but to offer a regional alternative: a Middle Eastern arbitration centre with local infrastructure, bilingual (English and Arabic) proceedings, modern infrastructure and proximity to the disputes arising from Vision 2030 projects. For intra-MENA or GCC disputes, particularly those involving state-owned or semi-public entities, Riyadh may become an increasingly attractive seat. The Kingdom’s strategic location between Europe, Asia and Africa also positions it well for cross-regional disputes. It may also be assisted by the removal of competition from the LCIA in the UAE following legal changes which terminated the LCIA partnership with the Dubai International Financial Centre.
WIDER ECONOMIC AND LEGAL IMPACT
The impact of Saudi Arabia’s continued refinement of its legal framework will extend beyond arbitration.
A functioning, fair and efficient dispute resolution system improves legal certainty, reduces transactional risk, and supports the rule of law. These are all crucial elements for economic diversification, signalling seriousness to prospective investors about the Kingdom’s legal infrastructure, and creating opportunities for Saudi lawyers to develop robust international disputes practices.
Both investors and lawyers will be watching closely. Should current trends continue, Riyadh may soon emerge as a credible hub for high-value international disputes.
Pillsbury will soon establish an on-the-ground presence in Riyadh through a combination with Saudi firm AlArfaj & Partners.
Text by:
- Deborah Ruff, partner, Pillsbury
- Julia Kalinina Belcher, special counsel, Pillsbury
- Charles H. Golsong, special counsel, Pillsbury
- Khalid AlArfaj, managing partner, AlArfaj & Partners
