On 16 April 2012, the Council of Ministers of the Kingdom of Saudi Arabia (“Saudi Arabia”) approved the text of a new arbitration law (the “2012 Law”) intended to supersede the existing 1983 law (the “1983 Law”). The 2012 Law was published in the Official Gazette (Um al Qura) on 8 June 2012 and came into force 30 days thereafter, on 8 July 2012. The reforms it introduces are expected to overhaul the arbitration regime in Saudi Arabia, in the broader context of the long-awaited reform of arbitration laws in other Gulf countries such as the United Arab Emirates and Qatar.

Traditionally, arbitration in Saudi Arabia has been challenging for non-Saudi parties. The 1983 Law – as supplemented by the corresponding implementing regulations issued in 1985 – was not adapted to reflect developments elsewhere in the practice of international arbitration or Saudi Arabia’s ratification on 19 April 1994 of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Award (the “NY Convention”). The 1983 Law was thus characterised by the heavy limitations it placed on party autonomy and its call for the intervention of the Saudi courts throughout the arbitral process. Under the 1983 Law, arbitration in Saudi Arabia was difficult for parties with limited knowledge of Arabic or Islamic Shari’a.

Please see full article below for more information.