Decree Issued for "Arbitration Law" to Encourage Investment

Decree-Law No. 120 of 2026 concerning the issuance of the Arbitration Law has been promulgated, establishing an integrated national arbitration framework that reduces time through fixed deadlines and simplified procedural orders, safeguards public funds by imposing strict controls on the arbitration of contracts concluded by state entities, limits the arbitrator’s liability, restricts grounds for appeal and ensures swift resolution for investors, and regulates arbitration institutions under prudent oversight. This aims to make arbitration in the State of Kuwait a specialized, efficient, and reliable form of justice, serving as one of the pillars of its economic development.

The explanatory memorandum for the aforementioned decree-law, which comprises 108 articles distributed across 15 chapters, stated that the state’s continued implementation of its developmental policies aimed at transforming Kuwait into an attractive financial and commercial investment hub requires a modern arbitration environment that inspires confidence among market participants. It added that this law was drafted as a comprehensive, standalone arbitration legislation that draws upon the best stable international systems while preserving the distinctiveness of the Kuwaiti legal system.

It further noted that recent contracts have witnessed profound transformations in arbitration systems and their applications, with countries successively enacting modern, independent arbitration laws and establishing arbitration centers that attract major disputes and associated legal and financial services, while the Kuwaiti system remained governed by provisions no longer adequate to meet the demands of the modern era.

The memorandum explained that the accompanying law was built on several foundations, including subjecting arbitration in contracts concluded by state entities to controls that safeguard public funds without closing the door to arbitration for them; introducing a system for interim and conservatory arbitrators under a title consistent with national procedural terminology; subjecting arbitration centers to a licensing and oversight regime managed by a specialized department within the Ministry of Justice, which will maintain registers of arbitrators and centers; and incorporating judicial arbitration into this law, after it had previously been governed by separate legislation, thereby unifying the reference framework for arbitration in the state and keeping pace with modern technological means in all arbitration proceedings.