Kuwait’s New Arbitration Law: What Decree-Law No. 120 of 2026 Changes for Parties to a Dispute

By Fahad Alburaikan, Co-Founding Partner, Alitqan Legal Group

Kuwait’s new Arbitration Law was promulgated by Decree-Law No. 120 of 2026 on 13 October 2026 and published in the Official Gazette, Kuwait Al-Youm (Issue 1813), on 18 October 2026. The promulgating articles set no special commencement date, so the Law takes effect under the general constitutional rule one month after publication. It is the first stand-alone statute to bring consensual and judicial arbitration together in a single text of 108 articles across fifteen chapters, after decades in which arbitration was split between a chapter of the Civil and Commercial Procedure Law (1980) and the Judicial Arbitration Law (1995).

This article is a practical reading of the Law from the standpoint of the parties: what protects your agreement to arbitrate, what secures the arbitrator’s impartiality, how you protect your rights before the tribunal is fully constituted, how an award is challenged and enforced, and what you should review in your contracts now. The full text is published on our website: Decree-Law No. 120 of 2026 Promulgating the Arbitration Law.

The essentials in six points

• One statute instead of two: Chapter Twelve of the Civil and Commercial Procedure Law and Law No. 11 of 1995 are repealed and replaced by a stand-alone law.
• No retroactive effect on pending arbitrations: an arbitration already under way when the Law takes effect continues under the old rules, even if it rests on an earlier arbitration agreement.
• A harder agreement to escape: it may be evidenced by electronic correspondence or by reference, it survives the invalidity of the main contract, and the tribunal rules on its own jurisdiction.
• Declared and continuing impartiality: the arbitrator discloses on acceptance and throughout the proceedings, and the parties disclose who is funding the arbitration.
• Urgent protection on short deadlines: an arbitrator for interim and conservatory measures may act before the tribunal is constituted, appointed by the court within five days and deciding within fifteen.
• Judicial review that does not stall enforcement: an action to set aside before the Court of Appeal is decided within six months by a final judgment, and filing it does not automatically suspend enforcement.

A single legislative reference that preserves the specificity of judicial arbitration

Article Four of the promulgating articles repeals Chapter Twelve on arbitration in the Civil and Commercial Procedure Law and repeals Law No. 11 of 1995 on judicial arbitration in civil and commercial matters. Both regimes are absorbed into the new Law.

This consolidation has practical value: it makes the governing rule easier to find and reduces conflict between texts and procedures. Judicial arbitration nevertheless keeps its specificity in a separate chapter, and the distinction matters, particularly when identifying the route of challenge. An award in consensual arbitration is subject to an action to set aside, whereas the Law allows an appeal in cassation against awards of the judicial arbitration tribunal in the cases specified in Article 97.

Protecting the arbitration agreement from attempts to escape it

The Law widens the ways in which the writing requirement is satisfied. It recognises electronic correspondence, express reference to a document containing an arbitration agreement, and the other forms listed in Article 5. This matters in modern transactions, where the documents may be spread across contracts, correspondence and interlinked instruments.

Article 8 establishes the independence of the arbitration agreement from the other terms of the contract. The invalidity, rescission or termination of the contract does not, of itself, extinguish a valid arbitration agreement, subject to the exception for lack of capacity of a contracting party. The effect is to shield the arbitral process from being derailed merely by a challenge to the main contract.

Article 10 requires a court before which a dispute covered by an arbitration agreement is brought to decline jurisdiction, provided the defendant so pleads before raising any defence on the merits, unless the court finds the agreement void or incapable of being performed. Article 49 reinforces this protection by assigning to the tribunal itself the decision on pleas concerning its jurisdiction, whether they relate to the existence, validity or scope of the arbitration agreement. This keeps the proceedings moving, while judicial review remains available through the mechanisms the Law lays down.

The arbitrator’s impartiality is a continuing obligation

The Law builds its guarantees of impartiality and independence on an express duty of disclosure. Article 12 requires the arbitrator to accept the mandate in writing, to declare that they have no interest in the dispute, and to notify the parties of anything that raises serious doubts about their impartiality or independence. Article 13 completes this protection by requiring disclosure, without delay, of circumstances that arise throughout the proceedings.

This guarantee gains weight from the parties’ obligation under Article 30 to disclose the sources funding the costs of the arbitration. That disclosure helps expose conflicts that may arise from an arbitrator’s connection to a funder who does not appear among the parties at the outset.

The Law also regulates the challenge of arbitrators with defined time limits and procedures, and provides that a challenge does not automatically suspend the proceedings. This strikes a balance between a party’s right to object to an arbitrator whose independence is seriously in doubt and the need to prevent challenges from becoming a tool for prolonging the dispute.

Equality and the rights of the defence as limits on procedural flexibility

Among the most important guarantees for the parties is Article 22, which requires respect for the fundamental principles of litigation, equal treatment of the parties, equivalent conditions for presenting their claims and defences, and conduct of the proceedings without delay or unnecessary expense.

The parties’ freedom to choose the procedure does not permit any breach of the right to be heard, and the tribunal’s power to manage the proceedings remains bound by these principles. Two important applications follow: under Article 27, the respondent’s default is not treated as an admission of the claimant’s claims, and under Article 36, the parties may examine the expert’s report, comment on it and discuss it in accordance with its provisions.

The philosophy of the Law shows through here: faster resolution, with a genuine opportunity for each party to present its case and confront the evidence against it.

Urgent protection before the tribunal is fully constituted

The Law introduces, in Articles 41 to 45, an arbitrator for interim and conservatory measures whose appointment the parties may agree before the arbitral tribunal is constituted. The value of this mechanism appears when rights face a risk that cannot wait for the tribunal to be completed.

The legislator set short deadlines. Where the court is asked to make the appointment under Article 42, it does so within five days, and the default rule is that the decision issues within fifteen days of the appointment, with extension possible under the statutory conditions.

To protect the parties, this arbitrator is subject to the rules on disclosure, impartiality and confidentiality, and may not be appointed to decide the merits of the dispute. An objection against the decision may be brought before the competent court within seven days of notification. Urgent protection is thus paired with safeguards that stop a provisional measure from becoming an advance ruling on the merits.

The deadlines every party should keep in view

Confidentiality as a statutory guarantee backed by a sanction

Article 40 makes the arbitral proceedings confidential and restricts disclosure of what is submitted in them and of the deliberations to cases of written consent of the parties or as permitted by law. Article 62 prohibits publication of the award or any part of it without the written consent of all parties, while allowing arbitration centres to publish extracts for academic and research purposes after redacting the parties’ details and anything that could identify them.

Article 103 reinforces this protection with imprisonment of up to six months and a fine of up to ten thousand Kuwaiti dinars, or either penalty, for anyone who discloses a secret of the arbitral proceedings that came to them in their capacity as arbitrator, expert, secretary or employee of an arbitration centre or of the competent department, and for anyone who publishes an award or part of it without the consent of all parties. This guarantee is particularly significant in disputes involving trade secrets, financial data or information whose circulation could affect the parties’ interests.

Controlling time and cost, and protecting the award from formal defects

Article 59 sets the default period for issuing the award, absent party agreement, at twelve months from the tribunal’s constitution. It regulates extensions and allows recourse to the president of the competent court to seek an additional period or to terminate the proceedings.

This should not be reduced to a promise that every arbitration will end within a year, since the period can be extended by law and by agreement. The real guarantee is a clear time frame and a means of confronting proceedings that drag on without resolution.

On cost, Article 60 allows the court to adjust the assessment of the arbitrators’ fees or expenses in proportion to the effort, the nature of the dispute and the arbitrator’s expertise, while excluding any review of the amount where the parties have agreed it. Careful attention to the financial arrangement from the outset therefore remains one of the parties’ most important protections.

Article 58 also softens the nullity arising from formal omissions in the award where the missing information can be supplied from the context or the case file, unless the omission is serious and affects the rights of the defence. This approach protects the fruit of the proceedings from being lost to immaterial formal defects.

Setting aside and enforcing the award: judicial review focused on the award

The Law makes the action to set aside the route of challenge against an award in consensual arbitration and assigns it to the Court of Appeal, with defined grounds and time limits. The grounds include the absence or invalidity of the arbitration agreement, a fundamental nullity affecting the award, irregular constitution of the tribunal, exceeding the scope of the agreement, and the other cases the Law lists.

The Court of Appeal must decide the action within a period not exceeding six months, by a final judgment not open to appeal. Filing the action does not automatically suspend enforcement, although enforcement may be stayed for serious reasons under the conditions set out in Article 77.

Protection is thus distributed between the successful party, whose award is not frozen merely because an action has been filed, and the objecting party, who may seek a stay where the grounds exist. Enforcement remains conditional on the statutory requirements, including proper service, no conflict with public policy, and no inconsistency with an earlier judgment.

One notable innovation is Article 79, which requires the Court of Appeal, when it sets aside the award wholly or in part, to address the merits of the dispute and decide them, having regard to Article 78. This legislative choice avoids sending the dispute back to square one and gives the action to set aside a practical effect beyond merely annulling the award.

Regulating arbitration centres and strengthening institutional trust

The Law subjects the establishment of institutional arbitration centres to licensing and ties their operation to the approval of their procedural rules and their schedules of fees and charges by the Ministry of Justice. It also requires them to provide the means of case management and notification procedures that secure actual knowledge and protect the rights of the defence. Article Three of the promulgating articles gives centres existing when the Law takes effect one year to bring themselves into compliance.

The Law backs this regime with a criminal sanction in Article 102: imprisonment of up to one year and a fine of three thousand to thirty thousand Kuwaiti dinars, or either penalty, for anyone who establishes or manages a centre without a licence, operates before its rules are approved or during a suspension or after revocation, assigns the licence without written consent, submits incorrect information to obtain or renew the licence, or holds themselves out as an arbitration centre. The court may also order the closure of the offending centre and publication of a summary of the judgment at its expense.

These provisions give a clearer basis for verifying a centre’s legal status, its rules and its costs. The choice of centre and arbitrators nevertheless remains a professional decision that calls for examining experience, competence and the suitability of the rules to the nature of the dispute. The licence is a regulatory safeguard, and its benefit is completed by a sound choice. The GCC Commercial Arbitration Centre remains an available option under a separate regional convention.

In contracts with state entities, Article 3 lays down conditions for approving arbitration after consulting the Fatwa and Legislation Department, with a special regime for contracts connected to Kuwait Petroleum Corporation and its companies. Verifying the required approvals is therefore an essential part of drafting a sound arbitration clause in these contracts.

Does the new Law apply to your pending arbitration?

No. Article One of the promulgating articles provides that the Law does not apply to an arbitration pending when it takes effect, even if that arbitration rests on an earlier arbitration agreement, while procedures completed under any earlier legislation remain valid. What matters is therefore the status of the arbitral proceedings and the date they began, not the date the contract was signed. A contract signed before the Law will have its arbitration governed by the new Law if the arbitration begins after the Law takes effect, while an arbitration that began earlier continues under the rules it began with.

Note that pinpointing the moment an arbitration is “pending” may be contentious in borderline cases, for example where a request for arbitration has been sent but the tribunal has not yet been constituted. Such cases deserve specific analysis before any procedural step is taken.

A checklist for the arbitration clause in your contracts

The benefit of this framework begins with the drafting of the arbitration clause itself. Seven points deserve review in new and existing contracts:

1. Writing and reference: make sure the clause is in writing or expressly incorporated by reference to a document containing it, and keep the electronic correspondence that evidences the agreement (Article 5).
2. Seat: specify the seat of arbitration expressly, since it determines the court competent for appointments, assistance and the action to set aside.
3. Rules and centre: if you opt for institutional arbitration, choose a licensed centre, or one on its way to compliance within the one-year period, and review its approved procedural rules and fee schedule.
4. Language and constitution of the tribunal: specify the language of the arbitration, the number of arbitrators, how they are chosen, and the appointing authority if a party defaults.
5. Duration: decide whether to rely on the statutory period (twelve months) or agree a different one, and who may extend it (Article 59).
6. Fees and funding: agree how fees and expenses are determined from the outset, since agreement excludes later review (Article 60), and prepare for the duty to disclose any external funder (Article 30).
7. Interim measures and state approvals: provide for recourse to the interim-measures arbitrator before the tribunal is constituted, and in government contracts verify the approvals required by Article 3 before signing.

An important note before signing an arbitration clause: capacity and signing authority

Before signing an arbitration clause, check that the signatory has the capacity to do so, whether an individual, a company or a government entity. Article 4 provides that an agreement to arbitrate is valid only if made by a person with capacity to dispose of the rights in dispute, whether a natural or a legal person. Article 8 makes lack of capacity the sole exception under which the arbitration agreement falls with the main contract, which means a defect of capacity is not cured by the rule that the arbitration clause is independent.

This note takes three practical forms:

• An individual: must have full legal capacity at the time of signing, and the right must be one they are entitled to dispose of. Where an agent signs, the power of attorney must expressly authorise agreeing to arbitration.
• A company: the manager or representative who signs must be specifically authorised to agree to arbitration, under the memorandum or articles of association, a resolution of the general assembly or the board, or an express written delegation. Authority to manage the company and sign its contracts does not necessarily include authority to agree to arbitration, and this point is frequently raised as a plea of invalidity once a dispute has arisen.
• A government entity: must have obtained the approvals required by Article 3 of the Law, after consulting the Fatwa and Legislation Department: the approval of the Council of Ministers for contracts relating to development and the exploitation of non-oil natural resources, and the approval of the competent minister for other contracts under the rules adopted by the Council of Ministers. Arbitration in contracts connected to Kuwait Petroleum Corporation and its wholly owned companies follows the procedures and conditions set by the Supreme Petroleum Council. An arbitration clause in a government contract concluded without these approvals is exposed to challenge as to its very validity.

The safest course is to attach to the contract the documents evidencing each signatory’s authority (a commercial register extract, the delegation resolution, or the government approval letter) and to record in the recitals the basis of each signatory’s capacity, so that a clause intended to speed up resolution does not become a gateway to prolonging the dispute.

Frequently asked questions about Kuwait’s new Arbitration Law

When does Decree-Law No. 120 of 2026 take effect?

It was promulgated on 13 October 2026 and published in the Official Gazette on 18 October 2026. The promulgating articles set no specific commencement date, so it takes effect under the general constitutional rule one month after publication.

Did the new Law repeal the Judicial Arbitration Law No. 11 of 1995?

Yes. Article Four of the promulgating articles repeals Law No. 11 of 1995 and Chapter Twelve of the Civil and Commercial Procedure Law. Judicial arbitration is now a chapter within the new Law.

How is an arbitral award challenged?

An award in consensual arbitration is challenged by an action to set aside before the Court of Appeal on exhaustively listed grounds, decided within six months by a final judgment. Awards of the judicial arbitration tribunal may be appealed in cassation in the cases specified in Article 97.

Does filing an action to set aside suspend enforcement of the award?

Not automatically. The objecting party may apply for a stay of enforcement where serious grounds exist, under the conditions in Article 77.

What about arbitration clauses in government contracts?

Approval of arbitration in contracts with state entities is governed by Article 3, after consulting the Fatwa and Legislation Department, with a special regime for contracts of Kuwait Petroleum Corporation and its companies. Absence of the required approval puts the validity of the clause itself at risk.

Conclusion

The practical value of Kuwait’s new Arbitration Law lies in turning the guarantees of arbitration into enforceable duties and procedures: disclosure that protects independence, equality that protects the right to be heard, interim protection that prevents the loss of rights, and judicial review that disciplines the award and its enforcement. The benefit begins with the drafting of the arbitration clause itself, choosing the seat, the rules, the language, the method of constitution, the duration and the costs with care proportionate to the nature of the relationship and its risks.

This article is for general awareness only and is not a substitute for examining each case individually in light of its facts and the decisions and regulations to be issued in implementation of the Law. Quotations from Kuwaiti legislation are unofficial translations, and the Arabic text prevails. To discuss the arbitration clause in your contracts or a pending dispute, contact us.