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A First Look at Saudi Arabia’s New Draft Arbitration Law – Construction Disputes in Focus

October 2025

Saudi Arabia continues to take steps to enhance its legal framework, aiming to position the Kingdom as a leading hub for international business and dispute resolution. In this context, the Kingdom’s National Competitiveness Center has published a new draft Arbitration Law (the “Draft Law”), inviting public consultation on proposed changes to the existing Arbitration Law (Royal Decree No. M/34 dated 24/05/1433 AH (corresponding to 16/04/2012)) and its Implementing Regulations.

The Draft Law, if enacted, will reshape the dispute resolution landscape – particularly in sectors like construction and infrastructure, where arbitration remains the preferred mechanism for resolving high-value, complex, and often cross-border disputes.

We consider the key proposed reforms and their practical implications for construction disputes in Saudi Arabia.

Key proposed amendments in Draft Law

1. Emergency arbitrators

Construction projects can give rise to urgent disputes (e.g., the call of bonds, site access, and recovery of documents upon suspension, or termination). The recognition of emergency arbitrators in the Draft Law allows parties to seek time-sensitive interim relief before a tribunal is fully constituted – for example, to preserve evidence or prevent unlawful contract termination. If implemented this will provide parties with an alternative to seeking recourse through the local courts.

2. Technology-enabled procedures

Two common factors with large and complex construction claims are (i) the vast volume of documents and (ii) geographically dispersed participants. The Draft Law embraces digital innovation by permitting:

• electronic service of documents;
• virtual hearings; and
• electronic signing of awards.

This reflects modern practices and will enhance efficiency in large-scale construction arbitrations.

3. Law governing the arbitration agreement

Although not common, in circumstances where uncertainty arises about which law governs the arbitration clause itself (for example, where the substantive contract law differs from the law of the seat), the Draft Law clarifies the law of the seat will govern the clause, unless the parties agree otherwise.

4. Arbitrator qualifications and diversity

Under the current law, arbitrators in Saudi-seated arbitrations face nationality and academic restrictions. The Draft Law removes the requirement for arbitrators to hold degrees in Islamic law, or regular law and – unless otherwise agreed – allows arbitrators of any nationality. This expands the potential pool of experienced arbitrators and allows for the appointment of arbitrators with technical and sector-specific knowledge, often essential for construction disputes, and reenforces the rights of parties to arbitration proceedings to choose their arbitrators.

5. Jurisdiction

The Draft Law allows a tribunal to rule on objections to its own jurisdiction (the well-known kompetenz-kompetenz principle), aligning with international best practice.

6. Interim measures with court support

The Draft Law introduces stronger provisions for tribunal-ordered interim measures (such as suspending works, preserving goods, or securing payments) and outlines conditions under which courts can enforce such orders. This is particularly relevant to progress payment disputes, guarantees, and delay claims in construction settings.

7. Award defined

The definition of ‘Award’ now includes reference to interim and partial awards, confirming the enforceability of these awards in the local courts.

8. Joinder and consolidation

Large-scale construction projects often involve multiple parties – main contractors, subcontractors, consultants, joint ventures – and multiple related contracts. The Draft Law introduces limited provisions for:

• joinder of third parties; and
• consolidation of related arbitrations (with party consent).

While more conservative than some institutional rules, these changes reflect the reality of multi-party construction disputes and offer a path toward greater procedural efficiency. What will be interesting is the extent to which they are allowed in practice (as we have seen reluctance on the part of other arbitration centres outside of the Kingdom to apply similar provisions), if implemented as part of the revised law.

Construction-specific observations

Saudi Arabia’s Draft Law represents an important shift for the construction and infrastructure sector as it may allow:

• Access to specialised arbitrators: Removing formalistic qualifications opens the door to appointing technical experts and construction arbitration specialists.
• Faster emergency relief: The new emergency arbitrator provisions are especially relevant where performance bonds or termination notices are at stake.
• Digital readiness: Electronic procedures support document-heavy claims, digital engineering models (BIM), and remote participation – essential on large, international projects.
• Greater predictability: Clarifying which law governs the arbitration agreement and allowing a tribunal to rule on its own jurisdiction helps avoid procedural challenges.

While the Draft Law does not radically alter the structure of arbitration in the Kingdom, it introduces meaningful improvements for construction industry users seeking clarity, neutrality, and efficiency.

What construction stakeholders should do now

With the Draft Law open for public comment and likely to be finalised soon, stakeholders should consider providing their input to the National Competitiveness Center as soon as possible.  

Contractors, consultants, and investors operating in the Kingdom should monitor developments closely and prepare for the implementation of this new regime.

For tailored advice on how the new law could affect your projects, contracts, or ongoing disputes, please contact Jeremy Russell and Claire Miller.

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