INVESTOR-STATE DISPUTE SETTLEMENT FRAMEWORK IN SAUDI ARABIA: IMPROVING INVESTMENT STABILITY TO SUPPORT VISION 2030 OBJECTIVES

Abstract

The aim of this study is to examine the Investor-State Dispute Settlement (ISDS) framework and investment stability mechanisms in Saudi Arabia’s Bilateral Investment Treaties (BITs), focusing on their alignment with Vision 2030’s economic diversification goals. The research aims to identify key challenges within Saudi BITs, such as speculative claims, ambiguous Most-Favoured-Nation (MFN) clauses, and the lack of explicit stabilisation and Exhaustion of Local Remedies provisions, and propose actionable reforms to enhance investor confidence and protect state sovereignty. The study employs a qualitative approach, relying on secondary data from statutes, treaties, case law, and academic literature. Key findings highlight gaps in Saudi BITs, including the absence of robust procedural safeguards against speculative claims, the broad application of MFN clauses that undermines jurisdictional predictability, and inconsistent stabilisation mechanisms that fail to ensure regulatory certainty for investors. The analysis reveals that although recent treaty reforms address substantive protections, procedural ambiguities continue to expose Saudi Arabia to increased legal and financial risks. The study recommends incorporating clear procedural safeguards, such as filtering mechanisms for speculative claims, and explicitly excluding dispute settlement from MFN clauses to reduce jurisdictional uncertainty. Additionally, adaptive stabilisation clauses should be adopted to balance regulatory autonomy with investor protection, ensuring long-term economic stability. These reforms are integral to attaining a predictable and attractive investment environment under Vision 2030.