Ali Ebshara Ali Ebshara

Saudi Arabia: Your Next Arbitration Seat?

In 2015 my friends visited me in Kuwait from the Kingdom of Saudi Arabia and asked if we could watch a movie at a movie theatre. Something they did not have access to at the time as movie theatres were still banned. In 2025 those same friends invited me to the Kingdom to watch the Saudi Grand Prix and Cristiano Ronaldo play for a local football team.

It has been a busy decade for the Kingdom. The country is positioning itself as a global financial hub. It has had a fundamental restructuring to its financial and legal systems with notable changes in arbitration.

Arbitration Law & the Court

Arbitration laws were passed in 2012. This introduced party autonomy in seat and rules selection, enforceability of awards, and recognition of international arbitration. It created the framework for an arbitration system that would be expected in a modern economy. In 2016, the Kingdom launched the Saudi Center for Commercial Arbitration (SCCA), the Kingdom’s first institutional arbitration platform. It provided ADR services and allowed for a clear path to arbitration in the Kingdom.

The SCCA was expanded upon through the 2023 SCCA Arbitration Rules. This established an independent SCCA Court to oversee cases, introduced emergency arbitrators and expedited tracks, enabled online dispute resolution, and clarified procedures for consolidation, joinder, cybersecurity, and foreign counsel representation. They also allowed for the publication of anonymized awards.

These changes modernized arbitration in the Kingdom and it now offers many of the tools and safeguards investors expect in a global commercial hub, positioning the country as a credible international and regional hub for dispute resolution.

The legal system

Practicing law in the GCC is dependent on a local understanding of customs and procedures. To state that the law is based on a single principle is a simplification, it has continued to develop as the region became more globalized. As a result, practice in the region is greatly dependent on a local understanding of local culture and the systems in place. Much of it is learnt through experience and local training.

This has been alienating to foreign attorneys. Different countries in the region have tackled this through different methods. Dubai in the UAE has created a separate jurisdiction, the Dubai international Finance Centre (DIFC), which follows a system similar to English Common Law. Abu Dhabi has followed a similar path.

The Kingdom created a Codified Transactions Law in 2023, which has over 700 articles and codified governing contracts, property, torts, and dispute resolution, and introduces mandatory provisions like good faith and liquidated damages, applicable even to pre-existing contracts. It allows for further clarity of local laws and creates an easier entry point for legal research.

The Economy & Case Trends Compared to Other Institutions

The Kingdom’s economy is the largest in the region with a GDP of over 1 trillion. The legal sector is currently valued at 5.9 billion and is projected to reach 8.4 billion by 2030. The projected compound annual growth rate is 6%. In more saturated markets that figure is 2.5%. Whether the 8.4 billion is met or not, it shows that there is currently heavy investment into the market and it is developing rapidly. As these legal developments are happening, more and more financial regulations are being passed that are creating a welcoming global investment space.

With the increased investment, the Kingdom is in a better position than ever to create clients in need of arbitration attorneys and that is likely to increase in the coming years. The Kingdom is already home to a number of international legal firms and that number continues to expand.

Comparisons

This graph compares the SCCA against other major arbitration institutions - the London Court of International Arbitration, Dubai International Arbitration Centre, Singapore International Arbitration Centre, and the ICC International Court of Arbitration.


  • DIAC figures are from the 2023 report.

  • SCCA and DIAC did not report international percentages. Both indicated a range of nationalities involved in the disputes (28 total nationalities in SCCA; DIAC reported parties from 49 different countries during 2023.)

  • SCCA reported that 38% of its 120 case load was in Construction and Engineering. Exact figures for arbitration cases are not available.

  • Additionally, the ICC disputes totaled 102 billion USD, DIAC 1.497 billion USD (2023), SIAC 11.86 billion USD, and SCCA 304 million USD. LCIA did not disclose a total ‘amount in dispute’ for new filings but the median claim size was USD 4.6 million.

The SCCA has a lower case volume compared to more established institutions.. The SCCA has seen a total of 120 cases in 2024 with a value of 304 million in dispute. 73 of the cases were arbitration. In 2023 the total cases were 92 and 46 of which were arbitration. The majority of cases at 38% are construction and engineering based, followed by professional services at 18% with additional cases in employment and labor, and capital markets. The average length for resolution was less than 6 months.

Some Considerations and Challenges for Foreign Attorneys

Enforcement at Local Courts

At the current time, foreign attorneys are not allowed to appear before Saudi courts with few exceptions. Enforcement of arbitration decisions in the Kingdom is under the jurisdiction of the specialized Enforcement Courts per the Enforcement Law in Royal Decree No. M/53/1433H, July 3, 2012. As a result, working with local counsel becomes necessary if the arbitration award needs to be enforced.

Additionally, there are strict rules on gaining a local license to practice law in the Kingdom. At the current time, to obtain a license to practice law as a non-saudi national the attorney must meet resident requirements and they are unable to work in local courts with issues concerning local laws without a Saudi national as a lead attorney.

Law Firm Structures

Foreign law firms often structure themselves as a “Professional Services Company (JV).” To set up a JV in the Kingdom requires at least 25% of the company to be owned by a Saudi national. However, the ability to practice before local courts and local laws is still limited. The firm may practice in international matters like arbitration, but only a licensed Saudi national may appear before a local court.

Additional restrictions include maintaining 70% of profits within the Kingdom and cases involving Saudi matters may not be off-sourced to a different office, and at least 50% of the hired attorneys must be of Saudi nationality. This is not a unique consideration to the Kingdom, many countries have similar hiring requirements, residency considerations and additional tax burdens. Commonly, international law firms are choosing to opt into a 50:50 model with a local Saudi firm.

The Kingdom also allows for local branches of international firms. These allow for 100% foreign ownership but practice is limited to international matters and consulting.

Public Policy and Arbitration Laws

As the system continues to evolve, arbitration attorneys must continue to monitor changes to local laws, arbitration laws and other economic regulations that may impact their particular fields. Additionally, there are public policy considerations weaved into arbitration that should be noted. Examples of this are:

Saudi Arabia’s Arbitration Law (Royal Decree No. M/34)

Article 38

“1. Subject to the provisions of Sharia and public order in the Kingdom, the arbitration tribunal shall…

a) Apply to the subject matter of the dispute the rules agreed upon… If they agree on applying the law of a given country, then the substantive rules of that country shall apply, excluding rules relating to conflict of laws, unless agreed otherwise.”

Article 25(1)(2)

  1. “The two parties to arbitration may agree on the procedures to be followed by the arbitration tribunal in conducting the proceedings…  provided that said rules are not in conflict with the provisions of Sharia.

  2. In the absence of such agreement, the arbitration tribunal may, subject to the provisions of Sharia and this Law, adopt the arbitration proceedings it deems fit.”

Article 25 and 38 shows that there still needs to be an understanding of legal customs and local laws. Even if an attorney were to for example only fly into Riyadh for SCCA Arbitration court, a local understanding of Saudi law may be necessary to be able to have a full assessment of the legal issue, strategy, and enforcement.

The Kingdom is in a better position than ever to create a demand for arbitration firms. The Kingdom is already home to a number of international legal firms and that number continues to expand. The ability for foreign lawyers to have a presence in the region is expanding and the market for arbitration is present and growing. Additionally, initiatives by the Kingdom as well as neighboring countries have created and will continue to grow a pool of talented bilingual Arabic speaking attorneys, both foreign and locally educated. It is likely the case that we will see the Kingdom become a prominent arbitration space in the region.

* AI disclosure: A generative large language model was used to assist with background research. The legal analysis, writing, structure, and substantive opinions expressed in this article are solely those of the author.





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Ali Ebshara Ali Ebshara

Library of Congress

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Ali Ebshara Ali Ebshara

AIs as Inventors: Thaler v. Hirshfeld

Published on the Berkeley Tech Law Journal Blog

On September 2, 2021, the U.S. District Court for the Eastern District of Virginia in Thaler v. Hirshfeld ruled in favor of the United States Patent and Trademark Office (USPTO), stating that an artificial intelligence (AI) cannot be listed as an inventor on a patent.1 The plaintiff alleged he had created an AI capable of forming patentable creations and filed for a patent application with the AI listed as an inventor.2 But the USPTO refused the application and stated that patent laws do not expand to include machines within the definition of an inventor.3

In coming to its decision, the court considered the interpretation of the language in the Patent Act.4 Specifically, the court considered the Act’s use of the term “individual” and whether it can expand to non-humans.5 The court relied on the Dictionary Act to find that the term “individual” should be interpreted through its common usage.6 The court also considered the use of personal pronouns like “himself” or “herself,” citing a case where the Supreme Court held that words in statutes should be interpreted by the words adjacent to them.7 In this sense, the pronouns used before the term “individual” help cement the fact that Congress had intended the term “individual” to refer to a person. The court also relied on the Federal Circuit’s decisions holding that being an inventor requires mental capacity to conceive the invention and that only natural persons can be inventors.8

The plaintiff had argued that the Patent Act should incorporate AI, as it would incentivize creation through AI and better protect moral rights. The plaintiff reasoned that human inventors’ moral rights currently stand unprotected due to the necessity of a human inventor to list themselves as the sole inventor, even when they have only had partial contribution alongside an AI.9 The court rejected this argument.10 In reliance on Fisons PLC v. Quigg, the court held that policy considerations cannot change the language of statutes and that such considerations should be left for Congress, not the courts.11 The court also emphasized the USPTO’s efforts in deciding whether an AI can be labeled as an inventor, referencing the USPTO’s research that found AI to be narrow and dependent on human intervention, and that AI able to be independently creative does not currently exist.12

In an almost directly contradicting decision, the Federal Court of Australia found that an AI can be listed as an inventor.13 The Australian court found that the ordinary usage of the term “inventor” is an agent noun that is not limited to a person but extends to anything that invents.14 Further, the court agreed with the plaintiff’s argument on the fact that listing AI as inventors would allow for better disclosure practices in patents and create greater financial incentives to create AI.15

Although the U.S. district court decision might seem like a negative outlook on the future of AI regulation within the patent space, it can be interpreted positively—the court simply indicated that AI cannot be listed as inventors yet. The court had acknowledged in its decision that a future where AI can be listed as inventors is likely, but we are simply not there yet.16 The Australian decision indicates that there is a movement towards acknowledging AI rights, and it is likely that the United States will follow suit within the near future.

Footnotes

  1. See Thaler v. Hirshfeld, No. 1:20-cv-903, 2021 WL 3934803, at *2 (E.D. Va. Sept. 2, 2021).

  2. Id.

  3. Id.

  4. Id. at *4.

  5. Id. at *5–6.

  6. Id. at *6.

  7. Id. (citing Gustafson v. Alloyd Co., 513 U.S. 561, 575 (1995)).

  8. Id. (citing Univ. of Utah v. Max-Planck-Gesellschaft, 734 F.3d 1315, 1323 (Fed. Cir. 2013) (“[I]nventors are the individuals that conceive of the invention . . . .”); Beech Aircraft Corp. v. EDO Corp., 990 F.2d 1237, 1248 (Fed. Cir. 1993) (“[O]nly natural persons can be ‘inventors.’”)).

  9. Id. at *7.

  10. Id.

  11. Id. (quoting Fisons PLC v. Quigg, 876 F.2d 99, 101 (Fed. Cir. 1989)).

  12. Id. at *8.

  13. Thaler v Commissioner of Patents [2021] FCA 879 (Austl.).

  14. Id. ¶ 120.

  15. Id. ¶ 130.

  16. See Thaler, 2021 WL 3934803, at *8 (“[T]here may come a time when artificial intelligence reaches a level of sophistication such that it might satisfy accepted meanings of inventorship. But that time has not yet arrived . . . .”).

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