The Saudi Vision 2030 programme, launched in 2016, is over half-way to its intended completion year.

The ambition is to substantially increase economic and social diversification of the country by 2030, pivoting the Kingdom鈥檚 economy away from its dependence on oil through a series of megaprojects spanning infrastructure, as well as tourism, entertainment, sport and other sectors.

The scale of the programme is truly breathtaking. As reported by the real estate consultancy group Knight Frank, since the programme鈥檚 start in 2016, the value of the projects launched by the Kingdom exceeded $1.25 trillion, with over $140 billion of construction awards made in 2023 alone.

Alongside the new 鈥済iga projects鈥�, the Kingdom is also investing in the development and improvement of its infrastructure.

Digital rendering of how 鈥楾he Bow鈥� at Neom鈥檚 Trojena mountain destination will look (Image: Webuild)

Global appeal

The Vision 2030 programme has propelled Saudi Arabia to become the world鈥檚 largest construction market. But the programme鈥檚 goals cannot be achieved without significant participation of foreign construction and consultancy companies, which the Kingdom has been seeking to attract.

To enhance its attractiveness to foreign developers, construction companies and investors and to increase their confidence in working in the country, the Kingdom has expended significant effort in updating its legal and dispute resolution 鈥渋nfrastructure鈥�.

Saudi Arabia has recognised that a stable and predictable legal system, including effective and transparent dispute resolution, are the linchpin of an investor-friendly regime which needs to be in place to ensure that the Vision 2030 is delivered.

The legal landscape

The Government Tenders and Procurement Law, replacing the outdated 2006 law, came into force in 2019 and applies to commercial agreements between private entities and government bodies. The Saudi Ministry of Finance regularly reviews and revises the law to bring it up to date.

The new Civil Transactions Law (which is effectively the country鈥檚 first Civil Code) entered into force in December 2023. Modelled partly on the civil codes of other Middle East and North Africa (MENA) countries, it provides a detailed set of rules governing various stages of contracting (from formation to termination) as well as particular provisions for specific types of contract, including construction.

Last year, Saudi Arabia acceded to the United Nations Convention on Contracts for the International Sale of Goods (鈥淐ISG鈥�) which establishes rules governing the formation of contracts for the international sale of goods. CISG entered into force on 1 September 2024.

Settling commercial disputes

Deborah Ruff, Pillsbury Winthrop Shaw Pittman

The first modern arbitration law has been in place since 1983 and has been updated over the years. In 2014, the Saudi Centre for Commercial Arbitration (鈥淪CCA鈥�) was established to provide alternative dispute resolution services for commercial disputes, mainly arbitration and mediation. SCCA鈥檚 vision seems to be aligned with the Vision 2030 programme: it aims to be the preferred alternative dispute resolution (ADR) choice in the region, by 2030.

Like other arbitration institutions, SCCA in 2022 established an independent SCCA Court to handle procedural matters in the arbitrations administered by SCCA. SCCA operates in Arabic and English.

The SCCA arbitration rules, revised in May 2023, are similarly broadly in line with those of major arbitration institutions; they include provisions for early determination of claims (Article 26), an emergency arbitrator (Article 7), expedited determination procedure for certain claims (Article 1 of Appendix II), as well as consolidation (Articles 11 and 13). They also include express provisions encouraging the use of technology in arbitrations. Importantly, the 2023 SCCA arbitration rules no longer refer to Sharia rules and give parties the choice of the applicable law, although general Sharia principles still apply to the enforcement of local and foreign awards in the Kingdom of Saudi Arabia (KSA).

In 2024, the Chartered Institute of Arbitrators launched its KSA branch, in a bid to build private dispute resolution capacity in KSA and the MENA region.

Attempting to grow trust

Julia Belcher, Pillsbury Winthrop Shaw Pittman LLP

While the track record of enforcing arbitration awards in the Kingdom has not always been stellar, according to the latest SCCA study of arbitration-related decisions of the Saudi courts between 2017 and 2022, over 92% (120 out of 131) motions to annul awards were denied.

Furthermore, out of the 11 motions that were granted, only seven were granted in full. Although these statistics do not appear to include cases where enforcement was denied even though the award debtor did not participate to contest enforcement, these findings are indeed positive.

It appears that the Kingdom鈥檚 efforts in updating and 鈥渦pgrading鈥� its ADR laws and practice have started to bear fruit. While international parties will want to monitor how quickly things change in practice, this should give investors, construction companies and other potential participants in the Vision 2030 programme increased comfort.

*According to a forecast by Knight Frank.

Deborah Ruff is global leader of international arbitration and partner and Julia Kalinina Belcher is special counsel, at Pillsbury Winthrop Shaw Pittman LLP