Arbitration

The time and costs involved in litigation have driven many contracting parties towards arbitration as an alternative method of dispute resolution. Arbitration is becoming more and more acceptable and the choice of the parties to a contract.

Generally, the courts will not exercise jurisdiction in cases, where there is an express agreement between the parties to refer a dispute to arbitration. The defence of lack of jurisdiction may be waived expressly or implidely. This rule is contained in the Civil and Commercial Procedure Code. In order to refer a dispute to arbitration there must be an express written agreement between the parties. It also requires the agreement to specify the dispute to be referred to arbitration and that such matter must be one which may be settled between the parties and does not pertain to public policy. The law does not distinguish between local or foreign arbitration.

Quite often in agreements between foreign corporations and Kuwaiti companies, both in the public as well as the private sector, a provision is made for reference of any dispute to arbitration in Kuwait or abroad.

Kuwaiti law gives the parties sufficient flexibility to negotiate and include such terms in their agreement as they consider fair and appropriate. It is also common in contracts involving Kuwaiti entities to include arbitration clauses, where the parities agree to have their dispute resolved by arbitration conducted in accordance with the procedural rules of the International Chamber of Commerce or any other international arbitral forum.

Kuwait is a member of the GCC Commercial Arbitration Centre.