Article 34 of the Saudi Privatization Law

This article regulates the governing law and ways to resolve disputes in privatization contracts:

First: the governing law. The contract and any subsidiary contract are subject to the provisions of this Law, and to the provisions of other laws in the Kingdom to the extent they do not conflict with it, including those on dispute resolution.

Second: arbitration. After the competent authority's approval, it is permitted for:

• The contract to include an arbitration clause to resolve any dispute arising from it or from a subsidiary contract, or to conclude an arbitration agreement for an existing dispute.
• The clause or agreement to specify the applicable law on the subject matter of the dispute.

This is subject to what the statutory provisions require for in rem disputes relating to real estate inside the Kingdom, which this permission does not affect.

Third: third-party disputes. Disputes between the private party and third parties concerning privatization projects, such as its dispute with a supplier or subcontractor, are not governed by this Law but by the general rules.

In practice, a foreign investor in particular can negotiate an arbitration clause and a chosen law, but this is not valid without the competent authority's approval. Anyone drafting an arbitration clause in a privatization contract should consult a lawyer who specializes in commercial matters or foreign investment.