New research finds Saudi courts reject almost 90% of arbitration annulment bids

Findings from the Saudi Center for Commercial Arbitration (249-page/1.3MB PDF) - drawing on nearly 1,000 appellate decisions, together with a comparison of proposed legislative reforms - offer the most comprehensive empirical picture yet of how the Saudi courts interact with arbitration, and what that means for parties choosing or considering Saudi Arabia as a seat.

The SCCA country report "Arbitration in Saudi Arabia" was prepared by the SCCA research team in connection with the forthcoming UNCITRAL Digest of Case Law on the UNCITRAL Model Law on International Commercial Arbitration.

Part I of the report analyses 967 arbitration-related appellate decisions issued by Saudi Courts of Appeal between January 2023 and June 2025, with Saudi Arabia as the seat and the Saudi Arbitration Law as the applicable law. Part II of the report presents a provision-by-provision comparison between the UNCITRAL Model Law, the current Saudi Arbitration Law (2012), and the Draft Saudi Arbitration Law published for public consultation at the end of 2025.

The report represents a substantial body of data and its findings provide encouraging insights into the arbitration friendly nature of Saudi Arabia as a seat for arbitration.

Courts reject almost 90% of annulment applications

The headline finding is a strikingly high rejection rate for annulment applications. Of the 194 annulment applications examined between January 2023 and June 2025 – accounting for 20.1% of the 967 decisions reviewed - 174 were rejected, an 89.7% rejection rate. Of the 20 successful annulment applications, 12 resulted in full annulment (6.2%) and eight in partial annulment (4.1%).

The successful grounds of annulment are equally telling. Successful annulments were confined to procedural grounds, notably failure to meet statutory time limits; or substantive grounds following admissibility when one of the exclusive grounds in Article 50 of the Saudi Arbitration Law was absent. The case law analysis confirms that the Saudi courts treat the Article 50 grounds as exhaustive and confirm they cannot revisit the facts or re-examine the merits of a dispute.

Overall, the data presents a court system that applies a constrained system of award review, rejecting unmeritorious challenges. For international parties assessing post-award risk, the report suggests a reassuringly low risk of annulment.

Sharia and public policy annulments

One concern that has historically been voiced by some foreign investors and international parties in Saudi-seated arbitrations is the risk of awards being challenged on grounds of public policy and Sharia law.

Reassuringly, the report shows that reliance on Sharia as a ground for annulment was "extremely limited", with only one instance of partial annulment recorded on that basis (0.5%). Public policy annulments occurred in only three cases (1.55%).

The cumulative picture is also consistent. Across SCCA studies covering more than 3,300 judgments from 2017 to 2025 - including 565 annulment applications - a total of 91.7% of annulment requests were rejected and only 2.3% of cases involved annulment based on Sharia or public policy. The report provides a credible assessment of instances where public policy and Sharia grounds have been successfully engaged but demonstrates that such grounds apply only in very specific and narrow circumstances.

One such example cited is the annulment of an award in 2023 on grounds of public policy, on the basis the tribunal wrongly treated an unregistered lease as valid and thereby the award conflicted with the regulatory requirement that registration is a condition of validity. In another example, a tribunal had misapplied a statutory limitation period.

The report also includes analysis of Sharia law as a ground for refusing recognition and enforcement. In a 2025 case, the court considered enforcement of an arbitral award relating to a lease agreement. The award ordered the rescission of the contract and the return of the leased property together with payment of rent, taxes, fines and arbitral fees. Whilst elements of the award such as the order for rescission, value of rent and associated amounts were upheld and enforced, the part of the award that ordered payment of a delay penalty constituted riba (interest) and was therefore prohibited under Sharia law and unenforceable.

The report characterises Saudi courts' approach to Sharia and public policy annulment as "highly restrictive", emphasising that procedural or formal irregularities do not justify annulment unless they fall within Article 50 and reiterating that merits review is not permitted.

Protecting due process and tribunal integrity

Saudi court assistance and intervention during proceedings is described as confined to instances "expressly provided for” by the Saudi Arbitration Law, and the report found no decisions in the dataset where courts extended their supervisory role beyond statutory limits.

The courts appear to take a principled, narrow approach to when intervention is warranted.

Within those limits, however, courts do intervene where core safeguards are at stake. Courts generally respect party-agreed arbitrator appointment mechanisms but intervene exceptionally to safeguard fairness and impartiality, including where mechanisms create imbalance or compromise independence.

The report records annulments where a party unilaterally appointed the entire tribunal (procedural unfairness), where an internal company "committee" staffed by the company's own employees was found to fatally undermine impartiality, and where tribunal composition changed without one party's knowledge.

Service-related defects have also led to annulment. Courts have annulled awards where defective service deprived a party of the opportunity to present its defence. The cases confirm that proof of delivery to agreed electronic channels is required, and that WhatsApp messages sent to a number not officially registered by the receiving party were found insufficient to constitute adequate service. In at least one case, an award was annulled in full where documented procedural violations materially affected the respondent's ability to present its defence, including lack of access to submissions, evidence, and steps relating to expert evidence.

The overall picture of the Saudi courts effectively supervising and supporting arbitration is encouraging but arbitration users should keep in mind that procedural requirements, including proper service, must be properly adhered to.

‘Kompetenz-Kompetenz’ and party autonomy

The report records that the Saudi courts uphold the tribunal's primary authority to rule on its own jurisdiction, including challenges to the existence or validity of the arbitration agreement, and affirm separability of the arbitration clause. The invalidity, rescission, or termination of the underlying contract does not, of itself, invalidate an arbitration clause that is otherwise independently valid.

Where parties agree institutional rules, Saudi courts uphold those agreements and recognise the binding effect and finality of the institutional procedural framework, so far as consistent with party agreement and applicable law.

In a 2025 Riyadh commercial case arising from SCCA-administered arbitration, the court held that the SCCA Court's decision rejecting an arbitrator challenge was not subject to judicial challenge because the parties had agreed to the SCCA Rules, which make such decisions final and binding. The court found that judicial interference would contradict the parties' agreement. This decision indicates that the Saudi courts will respect the will of the parties and the institutional framework they have agreed upon.

Analysis of the Arbitration Law

Beyond the case law, the report's legislative comparison identifies significant proposed changes in the Draft Arbitration Law that was published for consultation at the end of 2025. The comparison finds that the existing Saudi Arbitration Law largely reflects internationally recognised standards, with domestic adaptations, and the Draft Arbitration Law maintains that approach while aiming for greater legal certainty.

The proposed reforms cover several areas of practical significance:

• Arbitrator eligibility and immunity: The Draft Law would remove the current requirement that a sole arbitrator or tribunal chair hold a degree in Sharia or law, increasing flexibility to appoint technical experts as sole arbitrators or chairs. The Draft Law would also expressly codify arbitrator immunity from civil liability, except in cases of fraud or gross professional misconduct.
• Digital proceedings and remote hearings: The Draft Law would expressly support digitalisation, including electronic service and notifications and empowering tribunals to hold remote hearings using modern technology. It would allow electronic signatures on awards and would deem awards to have been rendered at the seat even if physically signed outside the Kingdom.
• Interim and emergency relief: The Draft Law would expand the interim measures framework and would require the competent court to decide on enforcement or assistance requests within 15 days in cases of non-compliance with a tribunal order. It would also expressly define and recognise emergency arbitrators for urgent interim relief before a tribunal is constituted — a significant gap in the current framework.
• Multi-party proceedings: The Draft Law would introduce joinder, intervention, and consolidation of proceedings, subject to conditions – features that are increasingly expected in modern institutional arbitration rules.
• Award timelines: The Draft Law would remove the current default 12-month time limit for issuing a final award where parties have not themselves set a time limit, while retaining a court-extension mechanism where parties have agreed a time limit.
• Enforcement: The Draft Law would remove the requirement to deposit the award with the competent court, and an Arabic translation of it, as a precondition to enforcement – requiring translation only at the point when enforcement is actually sought. The Draft Law would also introduce rights of appeal against both the grant and the refusal of enforcement orders, with the Supreme Court identified as the competent appellate authority – a departure from the current position under which enforcement orders are non-appealable.

The report frames the Draft Arbitration Law as part of a trajectory toward reduced formalities, accelerated procedures, stronger institutional arbitration and closer alignment with international standards, alongside the courts' "consistent record of arbitration-friendly practices".

Taken together, the reforms are consistent with a deliberate policy choice to remove procedural friction points that generate satellite litigation, particularly around service, formalities for awards, and enforcement steps. The introduction of emergency arbitrators and multi-party procedure provisions would bring Saudi Arabia expressly in line with features now standard in other international arbitration seats.

Co-written by Melissa McLaren of Pinsent Masons