COURT PROCEDURE

Arbitration in IP Disputes: When Is It Better?

MAY 2026 · 6 min read

Many trademark owners rush to court without knowing the Saudi system opens a faster, less costly door in specific cases: arbitration. But it is not a magic solution for every dispute. Here is when it is the better option and when it is a trap.

What Makes Arbitration a Viable Option?

Arbitration in Saudi Arabia is governed by the Arbitration Law (Royal Decree) and administered through the Saudi Center for Commercial Arbitration and others.

An arbitral award has judicial force on enforcement and is internationally enforceable through the New York Convention to which Saudi Arabia is a party.

When Is Arbitration More Suitable Than Courts?

Contractual disputes: license, franchise, or distribution agreements containing an "arbitration clause" — arbitration is the only available track by contract.

Disputes needing technical expertise: trademark valuation or complex design-similarity analysis. Arbitration allows expert arbitrators.

Disputes between parties wanting confidentiality: court cases are public; arbitration is confidential.

Cross-border disputes: easier transborder enforcement than national court judgments.

When Arbitration Does Not Work

Pure counterfeiting disputes: require criminal procedure not available to arbitration.

Urgent preliminary injunction: courts are faster at immediate cease orders and seizure.

When no arbitration clause exists between parties: arbitration cannot be imposed on a non-consenting party.

How Arbitration Starts

A written arbitration agreement is required: either a clause in a prior contract or a standalone agreement after the dispute arises.

The agreement defines: the arbitral center, number of arbitrators, language, applicable law, and time limit.

Duration and Cost

Mid-range arbitration in Saudi Arabia: 6–12 months from dispute to award — about 30%–50% faster than litigation.

Cost: center fees (variable by dispute value) + arbitrator fees + counsel fees. Usually higher than first-instance court fees, but lower than three judicial degrees combined.

Smart Arbitration Clauses in Your Contracts

If you are drafting a commercial contract using marks (license, franchise, distribution), include a detailed arbitration clause. This sets the path before a problem arises.

Avoid vague clauses. Specify the center, language, number of arbitrators, and law. A vague clause can turn the dispute into jurisdiction battles.

Summary

Arbitration is a powerful tool in the right cases — not a general substitute. At Rights we steer clients to arbitration when it is faster and more effective, and to courts when the case requires it. The decision is made case-by-case, not on general assumptions.