The development of international and domestic business operations in the current century closely relates to the increasing requirement of Arbitration as a way of dispute settlement. The Commercial Reconciliation and Arbitration System is considered as a favored procedure than raising a case at the Court due to the relatively quick decision taking and solution reached, less cost, and the simplicity of procedure, besides keeping the friendly relations between the parties concerned.

The Arbitration and Reconciliation laws of Kuwait are explained here under three divisions:-

1. Civil and Commercial procedure Code, 1980
The Law Decree No.38 of 1980 promulgated the Civil and Commercial procedure Code, 1980. It stipulates that the Ministry of Justice may form one or more Arbitration Panels to be held in the seat of the Court of First Instance or in any other location to be specified by the Chief of the Panel.

The presidency over the Panel shall be taken over by a counsel or a Justice judge to be selected by the General Assembly of the competent court , and its membership duly comprise of two merchants or experts of other specialized areas all of whom shall act as members and to be selected from the rolls prepared for this said purpose in accordance with the procedures and rules to be issued under a resolution made by the Minister of Justice.

The number of arbitrators in the Panel shall be specified in the agreement of Arbitration or in any separate agreement. The parties have the freedom to choose their arbitrators. In case any dispute arise regarding arbitrators or if any arbitrator abstain or withdraw from Arbitration, the Court of jurisdiction originally competent to hear the dispute shall appoint the necessary number of arbitrators upon the request of one litigant party, under the ordinary procedure of case filing. The number of arbitrators appointed by the court shall be equal to the number agreed upon between the litigant parties or complementary thereto.