Saudi Centre for Commercial Arbitration – Revised Arbitration Rules

Introduction

The Saudi Centre for Commercial Arbitration (‘SCCA’) announced the publication of the revised SCCA Arbitration Rules (‘New Rules’) on 1 May 2023.  The Chairman of the SCCA Board of Directors has stated that the launch of the New Rules is the start of a new chapter, which will help to advance the arbitration industry in the Kingdom of Saudi Arabia and the wider Middle East and achieve the SCCA’s vision “to be the preferred ADR choice in the region by 2030”.  The New Rules take into account the best practices followed by other international arbitral institutions and have been crafted under the guiding principles of “Fairness, respect and transparency”. This article summarises the key changes in the New Rules.

Application

The New Rules (available here) apply to all arbitrations filed on or after 1 May 2023.^[1]

The SCCA Court

Following the announcement of the formation of the SCCA Court last November, the New Rules effectively launch and empower the new SCCA Court which replaces the SCCA Committee for Administrative Decisions. The SCCA Court will make key administrative decisions for SCCA-administered arbitrations. It is made up of 15 eminent luminaries from 12 different countries with extensive and diverse experience of international arbitration and arbitral institutions.

The SCCA Court’s role now includes appointing arbitrators^[2] and emergency arbitrators;^[3] reviewing and approving awards;^[4] determining fees;^[5] determining objections to multi-contract arbitrations;^[6] and determining disputes relating to the number of arbitrators and the place of arbitration.^[7]

Challenge of arbitrators

The New Rules add two new grounds on which an arbitrator may be challenged:

• failure to perform his or her duties; and
• the arbitrator manifestly does not possess the qualifications agreed to by the parties.

Shari’ah Law

If the parties wish to choose a law other than Shari’ah to govern the contract or the arbitration agreement but want to ensure Shari’ah compliance, especially where the place of arbitration is not Saudi Arabia, this can be added as a provision. This forms part of the model clauses now included with the rules which provides:

“The law governing the [contract and/or arbitration agreement] shall be [__] to the extent that such law does not conflict with Shari’ah as outlined in the [e.g., Shari’ah Standards of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI)], in which case Shari’ah shall take precedence.”

The Substantive Law Applicable to the Contract and the Arbitration Agreement

The default law governing the arbitration agreement shall be the law of the place of arbitration, according to Article 37(4) of the Rules, and if parties wish to choose another law, they must explicitly add a provision to the following effect: “The law governing the arbitration agreement shall be [___]”.

Discretionary Powers

The New Rules also increase the Arbitral Tribunal’s discretionary powers which now include the power to:

• determine the most effective mode and format of hearings, including remote hearings by videoconference and other appropriate communication or in a hybrid format;^[8]
• encourage the parties to consider settlement of all or part of the dispute either by negotiation or through any form of amicable dispute resolution methods such as mediation;
• limit the length or content of, or dispense with, certain written submissions or the written or oral testimony of any witness;^[9] and
• the ability to reject changes in party representation if it considers it necessary to safeguard the composition of the Arbitral Tribunal or the finality of the award, after taking into account, among other things, the stage of the arbitration and the likely impact of the change or addition in representation.^[10]

Efficiency

Several clauses have been included to assist in the efficiency of the dispute resolution process. For example:

• emergency arbitrators are now required to issue interim awards no later than 15 days from the date on which the case file was transmitted to the emergency arbitrator, although the Administrator may extend this time limit in accordance with a reasoned request from the emergency arbitrator or on its own initiative if it considers it necessary to do so;^[11]
• where claims arise out of or in connection with more than one contract or arbitration agreement, it appears that parties may submit a single request for arbitration where: a) the relief sought arises out of the same transaction or series of related transactions; b) a common question of law or fact under each arbitration agreement giving rise to the arbitration; and c) the multiple arbitration agreement under which the claims are made are compatible;^[12]
• where any party applies to the tribunal to dispose of issues of jurisdiction, admissibility or legal merit raised in a claim or defence without the need to follow every step that would otherwise be taken in the ordinary course of an arbitration, and the tribunal determines that the application shall proceed, its order or award on the application must be made within 30 days from the date on which it allows the application to proceed.^[13]

Technology

A key feature of the New Rules is the promotion of the use of technology to file documents and manage cases. For example, the New Rules include:

• a third revision to the Online Dispute Resolution (“ODR”) Procedure Rules which apply alongside the Rules and prevail over the Rules in case of conflict. The ODR Procedure Rules are specifically tailored for small disputes where the aggregate amount in dispute does not exceed SAR 200,000 / USD54,500 (exclusive of costs of arbitration). Under the ODR Procedure Rules, the SCCA shall promptly appoint a sole arbitrator who shall then issue the final award within 30 days from the date of his or her appointment. The final award is typically based on the parties’ written submissions, unless the parties agree otherwise or the arbitrator deems it necessary to hold a hearing, which would typically be held via phone or video-conference;
• a provision for arbitrators to sign all awards electronically;^[14] 
• a provision that notice is served “at the email address which the addressee represents as its authorised email address at the time of such communication”;^[15] and
• a provision that all administrative conferences are to be held remotely by video conference, telephone or other appropriate means of communication by default, unless the parties agree otherwise.^[16]

Comment

The New Rules, as intended, take into account the best practices followed by other international arbitral institutions and have clearly been designed to assure would be arbitral parties that the SCCA can offer proceedings that are efficient, streamlined and that can be tailored to specific cases. Accordingly, the New Rules are a welcome addition as arbitration increasingly becomes the preferred forum to resolve disputes in most major industries across the Kingdom of Saudi Arabia.

Co-authored by Georgie Rossall, Trainee Solicitor at CMS Dubai

^[1] Article 2(2)

^[2] Article 16

^[3] Article 7

^[4] Article 36

^[5] Articles 40 and 41

^[6] Article 11

^[7] Articles 15 and 22

^[8] Article 29

^[9] Article 27

^[10] Article 9(3)

^[11] Article 7(8)

^[12] Article 11

^[13] Article 26

^[14] Article 36 (1)

^[15] Article 4(2).

^[16] Article 10