This study aims at studying the function of administrative courts in resolving administrative contract disputes, and how far it is lawful to resort to arbitration in settling disputes that arise from this types of contracts, under the power of administrative courts to settle these administrative disputes regarding administrative contracts suits pursuant to Article 1 of the Administrative Court Law issued by the Royal Degree No 41/49, especially when reality reveals that administration resorts to arbitration as a means to settle some of the administrative contracts disputes and burdens the government with great deal of expenses especially regarding disputes that are referred to external arbitration authorities for settlement. The researcher uses a mixed approach combining three approaches: the comparative, analytical, and descriptive approaches. The study is divided into four chapters. The introductory chapter covers the definition of administrative contracts and its criteria according to what was resolved in the administrative judicial courts in Egypt and the Sultanate of Oman. While, the first chapter studies the development stages for juridical courts in settling contracts disputes related to administration in Egypt and the Sultanate. The second chapter, however, was dedicated for the study of the function of administrative courts in settling the disputes of administrative contracts by dividing the study into two stages. The first stage is prior to the commencement of the contract. However, second stage is subsequent to the commencement of the contract. In the third chapter, the researcher tackles the different types of arbitration to distinguish them from other similar systems and the permissibility of resorting to arbitration in administrative contracts in both Egypt and the Sultanate. In the conclusion, the researcher points out the most significant findings and recommendations that he has established in his study.