Commercial Dispute Resolution in Saudi Arabia: Courts vs. Arbitration
The Commercial Courts Law 2020: Saudi Arabia's Reformed Litigation Framework
The Commercial Courts Law (Royal Decree M/93 of 2020) established a dedicated court system for commercial disputes, separating them from the general court system. Commercial courts now operate at three levels: Primary Commercial Courts (first instance), Commercial Courts of Appeal, and the Supreme Court. Cases are heard by specialized commercial judges with designated expertise in corporate, contract, and financial disputes. The new courts introduced mandatory case management timelines — first-instance judgments must be issued within 12 months of case filing — and digital case management through the Najiz platform. These reforms have significantly improved predictability and speed for commercial litigants.
Types of Commercial Disputes Handled by Saudi Commercial Courts
Saudi commercial courts have jurisdiction over: contract disputes between merchants, partnership dissolution and valuation disputes, corporate governance disputes (oppression claims, director liability), bankruptcy and insolvency proceedings (under the Bankruptcy Law 2018), banking and finance disputes, insurance disputes, intellectual property disputes (for infringement and unfair competition), and real estate commercial disputes. Consumer protection claims and government contract disputes are handled in separate specialist forums (Consumer Protection Authority and the Board of Grievances, respectively).
The Litigation Process: From Filing to Enforcement
Commercial litigation in Saudi Arabia begins with filing a claim statement (sahifa da’wa) through the Najiz portal, accompanied by supporting documents, evidence index, and payment of the court fee (calculated as a percentage of the claim value). The defendant is served and given 15 days to file a defence. A preliminary hearing is scheduled, at which the court determines jurisdiction and procedural matters. Substantive hearings follow, with witness examination, expert appointment (if required), and written submissions. Following judgment, the losing party has 30 days to appeal. Final judgments are enforced through the Enforcement Courts (established under the Enforcement Law of 2012), which have significant coercive powers including asset freezing, travel bans, and imprisonment for wilful non-compliance
Interim Relief: Preserving Assets Before and During Proceedings
Both commercial courts and arbitral tribunals in Saudi Arabia have the power to grant interim relief — precautionary measures to prevent dissipation of assets, destruction of evidence, or other irreversible harm while the main proceedings are pending. In court proceedings, a precautionary attachment (hajz tahtiat) can be granted ex parte on a showing of prima facie entitlement and urgency. In arbitration proceedings, the SCCA Rules allow the tribunal to order interim measures and the Emergency Arbitrator procedure enables relief within 48 hours of appointment. SADR/SCCA emergency arbitration is particularly valuable for cross-border commercial disputes where assets may be moved offshore.
Choosing Between Courts and Arbitration: A Decision Framework
The choice between litigation and arbitration should be made at the contract drafting stage — not when a dispute has already arisen. Key factors favouring arbitration: cross-border counterparty, confidentiality requirements, technical subject matter, New York Convention enforcement outside Saudi Arabia, and desire for arbitrator selection control. Key factors favouring court litigation: urgent interim relief needs, need for third-party joinder, straightforward debt claims (courts are faster and cheaper for undisputed debts), and government counterparty (where arbitration may be restricted). Our Commercial Disputes and Arbitration teams work jointly on forum selection and pre-dispute strategy for all major commercial relationships.
Facing a commercial dispute in Saudi Arabia? Contact Alnowaiser Law Firm's dispute resolution team at
Email Info@alnowaiserlaw.com or call +966 50 048 5751.