Insights
The arbitration clause, written at deal time
It is usually the last clause agreed and the first one read when a deal goes wrong. Written properly at the start, it decides where a dispute ends, under which rules, and how quickly.
In writing, and clear
The Saudi Arbitration Law of 2012 requires the arbitration agreement to be in writing. It remains in force; a draft of a new law was published in 2025, and a clause drafted today should work under either.
- In writing
- The seat
- The rules
- The language
- An odd-numbered tribunal, its chair qualified in Shariah or law
- Prime Minister’s approval where the counterparty is a government entity
- Time: start within the period that would apply in court
Seat, rules and language
The seat decides which courts support and supervise the arbitration. The rules — the Saudi Center for Commercial Arbitration’s rules in force since May 2023, for example — decide how the tribunal is formed and how the case runs. The language decides the cost of every document that follows.
The tribunal
A Saudi-seated tribunal must be odd in number, and its chair must hold a degree in Shariah or in law. A clause that names three arbitrators and says nothing of the chair invites the first dispute.
A government counterparty
A government entity may not agree to arbitration without the approval of the Prime Minister, unless a law provides otherwise. With the new procurement law in force from January 2027, this is the first line to check in any government contract.
Time and enforcement
No statutory limitation period applies to arbitration, but a claim brought after the period that would apply in court invites a challenge at enforcement; we start within it. Awards are enforced through the enforcement courts, and the Kingdom has been party to the New York Convention since 1994, subject to Shariah and public policy.
What we would do now
One review of the dispute clauses across the company’s standard contracts — supply, construction, shareholders’ agreements — and a single model clause the company uses from then on.
Where we come in
We draft the clause inside the transaction, in the circle that carries the deal; our Investigations & Disputes circle holds the Saudi-law seat when the clause is used.
This note is general information, not legal advice. It reflects the law as we understand it on the date shown.