A Critical Perspective on Commercial Arbitration Laws

Arbitration represents an optimal means of resolving commercial and international disputes, owing to its speed, flexibility, and specialization. Although the Kuwaiti legislator recognized the importance of arbitration early on, the regulatory legal framework governing it in Kuwait has become plagued by several loopholes and structural duplication, rendering it lagging behind contemporary international commercial arbitration standards.

This article examines the rules governing arbitration under Kuwaiti legislation, which are primarily divided between the Civil and Commercial Procedure Law No. 38 of 1980 (Chapter Twelve), concerning voluntary arbitration, and Law No. 11 of 1995 concerning judicial arbitration.

First: Legislative Duplication and the Absence of Independent Legislation. The first major issue lies in the existence of two parallel arbitration systems:

1. Voluntary Arbitration (1980 Procedure Law): Based on the parties’ will and their appointment of arbitrators.

2. Judicial Arbitration (Law No. 11 of 1995): A special system supervised by the Ministry of Justice, with tribunals composed of a presiding judge and arbitrators selected by the parties. This duplication has led to a fragmentation of legal provisions, rather than consolidating them into a single, independent arbitration law aligned with modern international standards, such as the UNCITRAL Model Law, adopted by most leading investment jurisdictions.

Second: The Predominance of a Judicial Character and the Erosion of Arbitration’s Flexibility. The primary objective of arbitration is to avoid judicial bureaucracy while ensuring confidentiality and speed. However, the Judicial Arbitration system under Law No. 11 of 1995 imposes clear judicial dominance, requiring the presence of judges in the tribunal’s composition and holding hearings publicly in courts in certain cases. This strips arbitration of its two essential features: absolute confidentiality and procedural flexibility.

Third: Restrictions on the Tribunal’s Jurisdiction and Extensive Judicial Intervention. The chapter on voluntary arbitration in the Procedure Law contains several shortcomings compared to global standards, most notably:

Opinion Articles

Local News

Economic News

Urgent Matters: Article 173 of the Procedure Law requires an explicit agreement between the parties to grant arbitrators jurisdiction over interim or urgent measures, thereby restricting the tribunal’s authority and forcing parties to resort to ordinary courts for conservatory measures.

Waleed Abdullah Al-Otaibi

College of Commercial Studies, Law Major