Decree-Law No. 120 of 2026 Establishes a Modern Dispute Resolution Framework and Strengthens Kuwait’s Position on the Regional Arbitration Map
By Tareq Yousef AlShumaimry
Former Secretary-General of the GCC Commercial Arbitration Centre
In a significant legislative development reflecting the State of Kuwait’s commitment to modernising its legal and investment environment, Decree-Law No. 120 of 2026 promulgating the Arbitration Law was issued on 13 October 2026 and published in the Official Gazette on 18 October 2026.
The new legislation marks a major shift in the regulation of commercial and investment arbitration, ushering in a new era of alignment with international standards and modern arbitration legislation across the Gulf region.
The significance of the law lies in consolidating arbitration provisions within a standalone legislative framework. Previously, these provisions were dispersed between the Civil and Commercial Procedures Law and Law No. 11 of 1995 concerning Judicial Arbitration.
This consolidation enhances procedural clarity and legal certainty, two fundamental safeguards sought by both domestic and foreign investors.
Key Reforms Enhancing Arbitration Efficiency
The new law enshrines fundamental principles firmly established in international arbitration, most notably the separability of the arbitration agreement from the underlying contract, the arbitral tribunal’s authority to determine its own jurisdiction, commonly known as competence-competence, and respect for party autonomy in selecting arbitrators, determining procedures and choosing the applicable law.
The legislation also recognises electronic arbitration agreements and permits the use of modern communication technologies in conducting proceedings, holding hearings, exchanging documents and executing electronic signatures, while granting such procedures legal validity. Among its significant innovations is the regulation of emergency arbitration and interim and conservatory measures before the constitution of the arbitral tribunal, enabling parties to protect assets and safeguard urgent rights.
The law also establishes time limits for rendering arbitral awards, strengthens the confidentiality of proceedings and requires parties to disclose sources of third-party funding for arbitration costs, thereby reducing the potential for conflicts of interest.
Furthermore, it introduces provisions governing the establishment, licensing and supervision of arbitration centres, alongside safeguards regulating arbitration in contracts involving state entities. These measures seek to strike an appropriate balance between protecting investment and safeguarding public funds.
One of the law’s particularly distinctive features is Article 79, which provides for the Court of Appeal to determine the merits of a dispute when setting aside an arbitral award, subject to Article 78. This mechanism is intended to prevent unnecessary expenditure of time and costs.
Kuwait’s new arbitration legislation closely reflects the fundamental principles underpinning the UNCITRAL Model Law on International Commercial Arbitration of 1985, as amended in 2006. These principles include the separability of arbitration agreements, party autonomy, competence-competence, procedural equality, interim measures and judicial supervision of arbitral awards.
Nevertheless, this convergence does not amount to complete legislative uniformity. The Kuwaiti law incorporates specific domestic provisions governing arbitration institutions, judicial arbitration, state contracts, confidentiality and disclosure of third-party funding, while also differing in certain aspects of judicial oversight and procedures for setting aside arbitral awards.
It is important to emphasise that the UNCITRAL Model Law serves as a legislative reference and framework rather than a binding international convention. Accordingly, differences between national legislation and the Model Law do not necessarily undermine adherence to its fundamental principles.
Gulf Arbitration Laws: A Continuing Legislative Evolution
The member states of the Gulf Cooperation Council (GCC) have progressively modernised their arbitration legislation. In Saudi Arabia, the Arbitration Law was enacted by Royal Decree No. M/34 on 16 April 2012. It remains the principal legislative framework governing arbitration, alongside continuing developments in the Kingdom’s judicial system and arbitration institutions.
In the United Arab Emirates, Federal Law No. 6 of 2018 on Arbitration was subsequently amended by Federal Decree-Law No. 15 of 2023, reflecting the country’s sustained commitment to strengthening its arbitration environment.
Bahrain enacted Law No. 9 of 2015 concerning Arbitration, distinguished by its direct adoption of the amended UNCITRAL Model Law. This places Bahrain among the Gulf jurisdictions whose arbitration legislation is most closely aligned with the international model.
Qatar introduced Law No. 2 of 2017 promulgating the Arbitration Law in Civil and Commercial Matters, drawing upon contemporary principles of international arbitration. In the Sultanate of Oman, the Arbitration Law was promulgated by Royal Decree No. 47 of 1997 and subsequently amended by Royal Decree No. 3 of 2007, alongside continuing efforts to develop the country’s legislative and institutional arbitration framework.
With the enactment of Decree-Law No. 120 of 2026, Kuwait has joined this broader Gulf legislative modernisation process through an independent arbitration law combining international standards with national legal characteristics.
Arbitration Centres and Chambers of Commerce: Parallel Institutional Development
The evolution of arbitration across the Gulf has extended beyond national legislation to encompass the rules and institutional frameworks of arbitration centres associated with chambers of commerce and specialised dispute resolution institutions.
In Kuwait, the Kuwait Commercial Arbitration Centre, affiliated with the Kuwait Chamber of Commerce and Industry, was established in 1999.
In Saudi Arabia, the Saudi Center for Commercial Arbitration (SCCA) has emerged as a leading national institution specialising in the administration of commercial disputes, with its updated Arbitration Rules taking effect in May 2023.
The United Arab Emirates hosts several prominent arbitration institutions, including the Dubai International Arbitration Centre (DIAC), operating under its 2022 Arbitration Rules, the Abu Dhabi International Arbitration Centre, whose rules came into effect in 2024, and the Sharjah International Commercial Arbitration Centre.
In Bahrain, the Bahrain Chamber for Dispute Resolution (BCDR) operates under its updated 2022 Arbitration Rules. Meanwhile, the Qatar International Center for Conciliation and Arbitration (QICCA), affiliated with the Qatar Chamber, administers disputes under its revised rules, effective from January 2025.
Oman has also witnessed significant institutional development through the Oman Commercial Arbitration Centre, which updated its arbitration rules in 2026 pursuant to Decision No. 3 of 2026. These amendments introduced developments concerning expedited arbitration procedures, digitalisation and disclosure of third-party funding.
Collectively, these developments demonstrate that competition among Gulf jurisdictions in international arbitration increasingly extends beyond legislative reform to encompass the quality of institutional rules and the efficiency of dispute administration.
The GCC Commercial Arbitration Centre: Towards a New Legal Framework for Greater Regional Integration
Within the broader development of arbitration across the Gulf, particular significance attaches to the GCC Commercial Arbitration Centre.
The Centre was established pursuant to a decision of the Supreme Council of the Gulf Cooperation Council at its 14th session, held in Riyadh in 1993, with its headquarters located in the Kingdom of Bahrain. It was conceived as a joint Gulf institution dedicated to resolving commercial disputes and supporting economic cooperation among GCC member states.
Drawing upon my experience as Secretary-General of the Centre, I undertook, beginning in 2021, a comprehensive review and revision of the legal framework governing its operations. This initiative sought to modernise the Centre’s governing provisions and enhance its operational mechanisms in response to developments in international commercial arbitration, while strengthening its role in facilitating trade and investment throughout the GCC.
The institutional process towards adopting a new legal framework for the Centre is expected to proceed following its submission to the relevant GCC ministers and completion of the procedures required for approval by the Supreme Council of the Gulf Cooperation Council.
This initiative represents an important step towards modernising the legal framework for joint Gulf arbitration and reinforcing the Centre’s position as a regional institution capable of addressing complex cross-border commercial and investment disputes.
Modernising the Centre’s legal framework in parallel with developments in national arbitration legislation would also promote greater legal integration across the Gulf and provide a more coherent and predictable environment for investors and businesses operating within GCC markets.
Kuwait: From Legislative Modernisation to Investor Confidence
The enactment of Kuwait’s new Arbitration Law represents far more than an addition to the country’s legislative framework. It is a significant step towards establishing a clearer, more predictable and more effective investment environment in which commercial disputes can be resolved efficiently. Nevertheless, the law’s ultimate success will depend on the effectiveness of its implementation, the independence of arbitration institutions, judicial expertise, the timely enforcement of arbitral awards, the professional development of arbitrators and the continued modernisation of institutional rules and procedures.
Investors seek more than promising economic opportunities. They require a legal system through which risks can be assessed, rights protected and disputes resolved fairly and effectively.
Against this background, Arbitration Law No. 120 of 2026 sends an important message to the international business community: Kuwait is advancing the modernisation of its legal framework in line with international standards, while strengthening its economic competitiveness and its position within the Gulf arbitration landscape. Modern legislation lays the foundations for confidence, but effective implementation is what transforms that confidence into sustainable investment and lasting economic strength.
Through this combination of legislative reform and institutional efficiency, Kuwait can further consolidate its standing among jurisdictions recognised for their commitment to investment protection and international arbitration.
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