Draft Decree on 'Arbitration Law'

The Cabinet approved a draft decree-law issuing an Arbitration Law, recognizing arbitration as a cornerstone of effective justice and a pillar of confidence in the business environment due to its speed in resolving disputes, specialization in adjudication, and flexibility in procedures. This decision was made during the Cabinet meeting held yesterday, Wednesday, under the chairmanship of Acting Prime Minister and Minister of Interior Sheikh Fahad Al-Yousef.

In a statement, the Cabinet clarified that the draft decree-law was prepared as a comprehensive, independent legislation for arbitration, drawing on stable international systems and best practices while preserving the distinctiveness of Kuwait’s legal system and its established procedural terminology. It strikes a precise balance between the principle of party autonomy, which is the foundation of arbitration, and the safeguards of public order, which underpin state sovereignty.

The statement noted that the draft decree-law establishes a unified framework that reconciles the authenticity of Kuwait’s legal system with the latest developments in comparative arbitration laws, creating an integrated national arbitration system. This system saves time through fixed timelines and streamlined procedural orders, protects public funds through strict controls on arbitrating state entities’ contracts, and provides arbitrators with limited liability and investors with restricted grounds for appeal and swift resolution.

The Cabinet forwarded the draft decree-law issuing the Arbitration Law to His Highness the Amir of Kuwait, Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah.

Minister of Justice and Advisor Nasser Al-Samit announced the Cabinet’s approval of the draft decree-law on arbitration, describing it as a significant legislative step in regulating dispute resolution mechanisms in Kuwait. He stated that the project repeals the existing law on judicial arbitration and Article Twelve of the Civil and Commercial Procedures Law governing arbitration, while merging and developing the provisions of judicial arbitration within the new law. This consolidates all forms of arbitration under a single legislative framework, rather than distributing its provisions across multiple laws.

Al-Samit explained that the project is guided by principles established by the UNCITRAL Model Law on International Commercial Arbitration issued by the United Nations Commission on International Trade Law, adheres to international best practices, and includes provisions tailored to the nature of Kuwait’s legal system and the needs of the country’s commercial and investment environment.

He added that unifying the arbitration system achieves greater clarity and legislative consistency, addresses practical issues such as lengthy procedures and fragmented regulations, and provides a faster and more flexible means of resolving disputes, particularly commercial and investment-related ones.

Al-Samit pointed out that the new law sets clear timelines for arbitration stages, enhances guarantees of neutrality, transparency, and confidentiality, regulates arbitration centers and their oversight, and permits the use of electronic means in procedures, hearings, and document exchange.

He emphasized that the law’s importance extends beyond expediting dispute resolution and reducing the burden on courts; it also aims to strengthen confidence in the state’s legal and economic environment, provide clearer guarantees for business partners and investors, and bolster Kuwait’s position as an attractive financial and commercial hub for investment.