The Saudi Center for Commercial Arbitration (the “SCCA”) is an arbitration institution established in Saudi Arabia in 2014 with the aim of providing a platform for resolving commercial disputes through arbitration in accordance with international standards. In 2023, in line with its vision to become a “preferred ADR choice in the region by 2030”, the SCCA released a second edition of its rules applicable to commercial arbitration, which entered into force on 1 May 2023 (the “2023 Arbitration Rules”).
The 2023 Arbitration Rules introduced a number of amendments, which will be discussed in the following paragraphs. The 2023 Arbitration Rules will seem familiar to parties with experience using the rules of other major international arbitration institutions.
Standard SCCA Arbitration
As with any kind of arbitration proceeding, any party wishing to initiate an SCCA arbitration needs to make sure that there is an agreement between the parties to do so. Such an agreement may be inserted in a contract with the other party or any other legal instrument out of which a dispute has arisen. The 2023 Arbitration Rules propose the following SCCA model clause that can be adjusted by the parties to further reflect the specificities of their dealings:
Once the agreement to arbitration is identified, the party wishing to launch the SCCA arbitration needs to submit a Request for Arbitration to the Administrator. As per Article 5(2) of the 2023 SCCA Arbitration Rules, the Request for Arbitration shall contain the following:
- A statement that the dispute be referred to SCCA arbitration;
- The names and contact details of the parties and, if known, of their authorized representatives;
- A copy of the contract(s) or legal instrument(s) out of which or in relation to which the dispute arises, and a copy of the arbitration agreement(s) invoked by the Claimant to support its claims if not part of the contract(s) or legal instrument(s);
- A description of the claim and a concise summary of the facts supporting it;
- A statement of the relief or remedy sought and any amount claimed; and
- A proposal as to the number of arbitrators, language of arbitration, and place of arbitration, if the parties have not previously agreed thereon.
In accordance with Article 5(4) of the 2023 SCCA Arbitration Rules, the Request for Arbitration “shall be accompanied by the appropriate SCCA registration fee”. Pursuant to Article 1 of Appendix I, this non-refundable fee amounts to SAR 5,000.00.
As per Article 5(4) of the 2023 SCCA Arbitration Rules, the arbitration shall “be deemed to commence on the date on which the Administrator determines at its discretion that [the] filing requirements have been satisfied and the SCCA registration fee has been paid.” Then, the opposing party has 30 days from the commencement date to submit its Answer to the Request for Arbitration under Article 6 of the 2023 SCCA Arbitration Rules.
Regarding the conduct of the arbitration, Article 25(1) of the 2023 SCCA Arbitration Rules stipulates that the arbitral tribunal may conduct the proceedings “in whatever manner it considers appropriate, provided that each party has the right to be heard and is given a fair opportunity to present its case.” However, the 2023 SCCA Arbitration Rules encourage the use of new technologies and electronic communications to the extent possible. Article 25(2) of the 2023 SCCA Arbitration Rules provides that “[i]n establishing procedures for the arbitration, the Arbitral Tribunal and the parties are encouraged to consider how technology, including but not limited to electronic communications, e-filings, and the electronic presentation of evidence, could be used, including to reduce the environmental impact of the arbitration.”
Online Dispute Resolution Procedure
The 2023 SCCA Arbitration Rules contain, in Appendix IV, a specific set of rules called Online Dispute Resolution Rules (the “ODR Procedure Rules”). The ODR Procedure Rules were established in October 2018 and amended in July 2021. In 2023, they were adapted to reflect the new edition of the 2023 SCCA Arbitration Rules. As stated in Article 1(2) of ODR Procedure Rules, the “ODR Procedure Rules shall apply in addition to any provisions of the Rules that are not in conflict with the ODR Procedure Rules. If in conflict, the provisions of the ODR Procedure Rules shall prevail.”
The ODR Procedure Rules were designed to apply, upon the written agreement of the parties, to small-scale disputes not exceeding SAR 200,000.00 “representing the aggregate amount in claims, exclusive any costs of arbitration” (Article 1(1) of the ODR Procedure Rules). The specificity of the procedure resides in the fact that the Request for Arbitration (Article 2 of the ODR Procedure Rules), as well as the Answer to the Request for Arbitration (Article 3 of the ODR Procedure Rules) are to be uploaded and exchanged using the ODR Platform.
Other rules of procedure are equally adapted:
- The time limit to submit the Answer to the Request for Arbitration is reduced from 30 days to 10 days as of the commencement of the procedure (Article 3 of the ODR Procedure Rules).
- The dispute is resolved by a sole arbitrator who is appointed by the SCCA Court (Article 5(1) of the ODR Procedure Rules).
- The filing fee, the administrative fee, and the arbitrator fee are equally reduced:
- The place of arbitration shall be Riyadh (Saudi Arabia) unless the parties agree otherwise (Article 7 of the ODR Procedure Rules).
- The language of the arbitration shall be Arabic unless otherwise agreed by the parties (Article 8 of the ODR Procedure Rules).
- The final award shall be rendered within 30 days of the sole arbitrator’s appointment unless the time limit is extended by the Administrator (Article 11 of the ODR Procedure Rules).
This is thus a fast, inexpensive procedure as compared to traditional arbitrations.
The SCCA Court
The SCCA Court was established in November 2022, following the trends of other arbitration institutions such as the ICC. This independent body of the SCCA comprises 15 members from 13 different countries and is led by Jan Paulsson, a well-known and highly respected arbitrator.
The 2023 Arbitration Rules vested the SCCA Court with several powers, such as the appointment of an emergency arbitrator (Article 7(5)); consolidation of multiple arbitrations at the request of a party or the arbitral tribunal (Article 13); deciding on a number of arbitrators in case of a lack of agreement between the parties (Article 15); nomination of arbitrators (Article 16); and deciding on the admissibility and merits of the challenge of arbitrators (Article 18).
Pursuant to Article 3(1) of the 2023 Arbitration Rules, any right of appeal or review of the decisions adopted by the SCCA Court is expressly “waived”.
Representation in SCCA Arbitration
Article 9 of the 2023 SCCA Arbitration Rules makes it explicit that parties may be represented or assisted by representatives of their choice, “including foreign legal practitioners regardless of the jurisdiction in which they are based or licensed to practice.”
The new SCCA Arbitration Rules also reflect the realities of today’s arbitration world, which call for greater transparency regarding any third party that may have an interest, usually financial, in the outcome of the arbitration. Thus, Article 17(6) of the 2023 SCCA Arbitration Rules stipulates that each party “must promptly disclose to the Administrator, all the other parties, and the arbitrators the identity of any non-party who has an economic interest in the arbitration’s outcome, including any third-party funder.”
By incorporating internationally recognized principles of arbitration into the new 2023 Arbitration Rules and by offering parties a transparent, efficient, and environmentally friendly dispute resolution process, the Saudi Center for Commercial Arbitration continues to play a significant role in promoting arbitration as an effective means of resolving commercial disputes in Saudi Arabia and in the Middle East.