Kuwait’s new arbitration law, Decree-Law No. 120 of 2026, marks the most significant overhaul of the country’s arbitration framework in three decades. Issued on 13 October 2026 and published in the Official Gazette (Kuwait Alyoum) on 18 October 2026, the Decree-Law promulgates a standalone arbitration statute comprising 108 articles across 15 chapters, and repeals the prior judicial-arbitration regime under Law No. 11 of 1995. For contractors, investors, arbitral institutions and in-house counsel, the change is practical and immediate: arbitration clauses may need re-papering, state-contract approval steps have shifted, pending cases require careful handling, and enforcement mechanics have been clarified. This guide explains what has changed and what to do now.
Search-intent summary. This article gives contractors, investors, arbitral institutions and in-house counsel an actionable, legally accurate guide to Decree-Law No. 120 of 2026, the essential statutory changes, what to amend in contracts, approval and compliance steps for state contracts, transitional treatment of pending arbitrations, and enforcement and court-support implications.
About this guidance. Practical guidance prepared by Global Law Experts’ Arbitration & Dispute Resolution practice group. It contains drafting examples and checklists for immediate use; it is not a substitute for local counsel review. All statutory references should be verified against the official text before being relied upon.
For almost thirty years, arbitration in Kuwait sat within the framework of Law No. 11 of 1995 concerning judicial arbitration, which treated arbitration largely as an adjunct to the judicial system. The new instrument changes that posture. By creating a dedicated, free-standing arbitration law and repealing the 1995 regime, Kuwait signals a modern, pro-arbitration orientation aligned with international practice.
The practical consequences reach across the contracting lifecycle. Commercial parties must check that their existing arbitration clauses remain fit for purpose. State counterparties and their contractors must understand which approvals are now required before an arbitration agreement binds a government body. Arbitral institutions operating in Kuwait face a defined compliance window. And anyone with a live dispute needs clarity on whether the old or new rules govern their proceedings. The remainder of this guide works through each of these themes, anchored to the text of the Decree-Law.
At a high level, Kuwait’s new arbitration law, Decree-Law No. 120 of 2026, reorganises the field into a single coherent statute and introduces a series of modernising provisions. The headline changes are:
Each of these is examined in detail below. Because the precise wording and article numbering of a newly promulgated decree-law are critical, practitioners should always verify specific clauses and figures against the official Gazette text before relying on any clause or checklist in this guide.
One of the most commercially important features of the new law is its treatment of the writing requirement. Under Decree-Law No. 120 of 2026, an arbitration agreement must be in writing to be valid, but “writing” is defined broadly to accommodate modern commercial practice. This removes doubt that previously surrounded informal or electronic arrangements.
The law recognises the arbitration agreement in several forms. These include a traditional signed document, but also exchanges that establish the parties’ consent through recorded communications. The agreement may be concluded either before a dispute arises (a classic arbitration clause within a contract) or after a dispute has crystallised (a submission agreement). This flexibility allows parties already in conflict to agree to arbitrate without needing a pre-existing clause.
The statute also permits incorporation by reference, a contract that refers to another document containing an arbitration clause can validly bind the parties to arbitrate, provided the reference makes that clause part of the contract. This is particularly relevant where parties use standard terms, framework agreements or purchase orders that cross-refer to master agreements.
Sample reference language, DRAFT ONLY. Obtain local counsel review. “The arbitration clause set out in Clause [X] of the Master Agreement dated [date] is incorporated into and forms part of this Purchase Order, and the parties agree to be bound by it.”
Because digital exchanges now plainly satisfy the writing requirement, parties should retain clear electronic records demonstrating mutual assent. When concluding arbitration agreements electronically, keep auditable evidence of who agreed, when, and to what terms. This reduces the risk of a later challenge to the existence or scope of the agreement. The direction of travel mirrors the UNCITRAL Model Law’s approach to the form of the arbitration agreement, which is helpful comparative context when drafting for cross-border counterparties.
The Decree-Law sets clear default rules for how tribunals are constituted. A tribunal must consist of a sole arbitrator or an odd number of arbitrators, avoiding the deadlock risk of an even-numbered panel. Where the parties have not agreed on the number, the default is three arbitrators.
Party autonomy remains the starting point: the parties are free to specify the number of arbitrators and the method of their appointment. The statutory defaults apply only to fill gaps where the parties’ agreement is silent or incomplete. This means careful drafting can avoid reliance on default mechanisms altogether.
Where the parties cannot agree on appointment, the competent court may step in and appoint an arbitrator. This supervisory role provides a reliable fallback so that a recalcitrant or unresponsive party cannot stall the constitution of the tribunal. Where the law provides for appointment by reference to a register of arbitrators, this introduces a degree of institutional oversight over who may serve; counsel should confirm the exact appointing authority and procedure against the statutory text.
As with any modern arbitration regime, arbitrators are subject to standards of independence and impartiality, and parties retain the ability to challenge an arbitrator on recognised grounds. When drafting, counsel should align the challenge procedure in any institutional clause with the statutory framework to avoid conflict between the chosen rules and the governing law.
The provisions on state contracts are among the most consequential in Kuwait’s new arbitration law, Decree-Law No. 120 of 2026, and they demand immediate attention from anyone contracting with Kuwaiti government entities. The statute conditions the validity of arbitration agreements in government contracts on obtaining specified approvals before the agreement takes effect.
The Decree-Law distinguishes between categories of government contract, reserving higher-level sign-off for more sensitive arrangements. In broad terms:
Because the precise categorisation and the identity of the approving authority are determined by the statutory text, parties should confirm the applicable approval category and authority for their specific contract with local counsel before signing. The practical effect is that no arbitration agreement in a state contract should be treated as binding until the correct approval has been secured and documented. A failure to obtain the right approval risks rendering the arbitration agreement invalid, with potentially severe consequences for dispute resolution later.
Sample clause, DRAFT ONLY. Obtain local counsel review. “The parties acknowledge that this arbitration agreement is subject to the approval required under Decree-Law No. 120 of 2026. The required approval shall be obtained in writing from the competent authority prior to [signature / effectiveness] of this Agreement, and a copy of such approval shall be appended as a schedule. The arbitration agreement shall not take effect until such approval has been obtained.”
Counsel should treat the approval as a condition precedent and allocate the consequences of non-approval expressly. Consider building in a fallback dispute-resolution mechanism that engages only if the required approval is not obtained, so the contract is not left without a resolution pathway. A practical checklist for state-contract parties includes:
With a new statute in force, existing clauses should be reviewed and, where appropriate, re-papered to reference the correct governing law and to capture the new approval and appointment mechanics. Below are four drafting examples for different contract types. Each is a starting point only.
All clauses below are DRAFT ONLY, verify against the text of Decree-Law No. 120 and obtain local counsel review before use.
“Any dispute arising out of or in connection with this Agreement shall be finally resolved by arbitration seated in Kuwait City, Kuwait, conducted in accordance with Decree-Law No. 120 of 2026. The tribunal shall consist of [one / three] arbitrator(s). The language of the arbitration shall be [English/Arabic].”
When to use: straightforward two-party commercial contracts where the parties prefer an ad hoc process. Redline note: specify the number of arbitrators to avoid the default three where a sole arbitrator would be more cost-effective.
“Any dispute arising out of or in connection with this Agreement shall be finally resolved under the Rules of [ICC / LCIA / DIAC] by [one / three] arbitrator(s) appointed in accordance with those Rules. The seat of arbitration shall be Kuwait City, Kuwait, and the arbitration shall be governed by Decree-Law No. 120 of 2026. The language of the arbitration shall be [English/Arabic].”
When to use: where parties want institutional administration and a recognised ruleset. Redline note: confirm the chosen institution’s appointment and challenge procedures are compatible with the statutory framework, and that any institution administering an arbitration seated in Kuwait complies with the new law’s requirements for centres operating in Kuwait. Parties using the ICC should note that the ICC Arbitration Rules in force from 1 June 2026 apply to cases filed on or after that date.
“Subject to the approval required under Decree-Law No. 120 of 2026, any dispute arising out of or in connection with this Agreement shall be finally resolved by arbitration seated in Kuwait City, Kuwait, under Decree-Law No. 120 of 2026, by three arbitrators. The approval of the competent authority shall be obtained in writing prior to the effectiveness of this arbitration agreement, and shall be appended as Schedule [X].”
When to use: any contract with a Kuwaiti government entity. Redline note: make the approval a condition precedent and identify the correct approving authority based on contract type and current law.
“Any dispute arising out of or relating to this Agreement, including disputes involving [multiple parties / affiliated entities], shall be finally resolved by arbitration seated in Kuwait City under Decree-Law No. 120 of 2026 and the Rules of [institution]. The parties agree to consolidation and joinder in accordance with those Rules, and the tribunal shall comprise three arbitrators appointed [as specified].”
When to use: complex, multi-party or investment-type arrangements. Redline note: address consolidation, joinder and appointment carefully to avoid gaps that trigger default rules.
A critical question for anyone with a live dispute is whether the new law applies. The treatment of pending proceedings is governed by the transitional provisions of Decree-Law No. 120 of 2026, and parties mid-arbitration should not assume they automatically migrate to the new regime. Because transitional arrangements can be nuanced, counsel should map each proceeding against the precise transitional text to determine the governing framework.
Where parties wish to benefit from features of the new statute, they may be able to agree to adopt elements of it by consent, subject to the status and stage of their proceedings and to what the transitional rules permit. Any such decision should be taken with local counsel, documented in writing, and tested against the transitional rules to confirm it is permissible and effective.
Arbitration centres operating in Kuwait are given a transition window under the new law to bring their rules and operations into compliance. Institutions should begin this work promptly: reviewing their rules against the statute, updating appointment and challenge procedures, and confirming that their administration aligns with the statutory requirements. The precise length of the compliance window should be confirmed against the statutory text. Early compliance reduces the risk of challenges to awards administered under outdated rules.
Parties with pending cases should map their proceedings carefully: identify the governing framework, confirm the tribunal’s constitution remains valid, and plan enforcement strategy accordingly. For awards that are made or enforced across the transition, counsel should document the applicable regime at each stage to pre-empt enforcement challenges.
The new law strengthens the courts’ supportive, rather than interventionist, role, a hallmark of a modern arbitration regime and a key reason Decree-Law No. 120 of 2026 is regarded as pro-arbitration.
Where a party objects on the basis of a valid arbitration agreement, the court is directed to decline jurisdiction and refer the parties to arbitration. Importantly, the commencement of a court action does not, of itself, stop the arbitration from proceeding. This discourages a party from using litigation as a delaying tactic and reinforces the primacy of the parties’ agreement to arbitrate.
The law contemplates court assistance for arbitration, including support where the tribunal’s powers need to be supplemented. Parties seeking urgent protection should understand the interaction between the tribunal’s authority and the courts’ supportive jurisdiction, and should draft clauses that preserve the ability to seek interim relief without being treated as a waiver of the arbitration agreement.
For enforcement, the framework provides for recognition and enforcement of awards, with defined grounds on which enforcement may be resisted or an award challenged. Counsel should structure proceedings with enforcement in mind from the outset, ensuring the award is reasoned, the tribunal was properly constituted, and procedural fairness is documented.
For cross-border matters, enforcement of foreign arbitral awards engages Kuwait’s international obligations as a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The Convention framework remains an essential reference point for understanding how awards rendered in one jurisdiction are recognised and enforced in another, and it complements the domestic enforcement provisions of the new law. Recent Kuwaiti Court of Cassation decisions have also shaped the practical boundaries of arbitration, and counsel should keep developing case law in view when assessing enforcement risk.
| Phase | Key risk | Recommended mitigation | Responsible stakeholder |
|---|---|---|---|
| Contracting | Clause references repealed Law 11/1995 | Re-paper clause to cite Decree-Law No. 120 of 2026 | In-house / external counsel |
| Contracting (state) | Missing or incorrect approval | Secure written approval as condition precedent before effectiveness | Contractor + government liaison |
| Tribunal formation | Reliance on unwanted defaults | Specify number and appointment method in the clause | Counsel |
| Pending dispute | Uncertainty over governing framework | Map proceedings; confirm old vs new regime with counsel | Dispute team |
| Enforcement | Challenge to award validity | Document fair procedure; ensure proper constitution and reasoning | Counsel + tribunal |
| Attribute | Law No. 11 of 1995 | Decree-Law No. 120 of 2026 |
|---|---|---|
| Scope / structure | Judicial arbitration embedded in court framework | Standalone, dedicated arbitration statute (108 articles, 15 chapters) |
| Writing requirement | Traditional written form emphasis | Writing broadened to digital exchanges and incorporation by reference |
| Tribunal composition | Court-anchored model | Sole or odd number; default three |
| State-contract approvals | Less specific statutory approval regime | Tiered approvals; senior sign-off for sensitive contracts, competent authority approval for others |
| Court intervention | Greater judicial involvement | Courts decline jurisdiction on valid objection; filing does not of itself stop arbitration |
| Institutional regulation | Limited express regulation of centres | Compliance obligations and transition window for centres |
| Transitional rules | N/A (prior regime) | Transitional provisions govern treatment of pending proceedings; compliance window for centres |
| Enforcement | Older recognition framework | Clarified recognition and enforcement, aligned with international practice |
Kuwait’s new arbitration law, Decree-Law No. 120 of 2026, is a decisive modernisation that affects how contracts are drafted, how state agreements are approved, how tribunals are constituted, and how awards are enforced. The most urgent priorities are clear: re-paper clauses to reference the new statute, secure the correct approvals for government contracts, map pending disputes against the transitional rules, and ensure institutions begin their compliance work. Every drafting example in this guide is a starting point only and must be verified against the text of the Decree-Law and reviewed by local counsel before use. Contractors, investors, arbitral institutions and in-house counsel who act now will be best placed to benefit from Kuwait’s strengthened, pro-arbitration framework.
For tailored support on re-papering clauses, state-contract approvals and enforcement strategy, connect with the Arbitration & Dispute Resolution, Kuwait practice team and the Global Law Experts directory of Kuwait arbitration lawyers.
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