Saudi Arabia Regulatory Update: Four new special economic zones launched
SCCA announces new Arbitration rules: another step forward for arbitration in the Kingdom of Saudi Arabia
Legal Development 08 May 2023 08 May 2023
On 1 May 2023, the Saudi Centre for Commercial Arbitration (“SCCA”) announced the publication of revised SCCA arbitration rules (“New Rules”). The New Rules came into force on 1 May and will apply to all arbitrations filed on or after that date.
The New Rules are the result of nearly 2 years work managed by the SCCA in consultation with the SCCA Rules Advisory Committee made up of 16 international subject matter experts, including Clyde & Co partner Ben Cowling.
The New Rules represent a substantial revision of the previous SCCA rules which were first published in 2016 (“Old Rules”). The key features of the New Rules are:
- The establishment of a new SCCA Court;
- Updating of the Old Rules to streamline the arbitration procedure;
- The introduction of new rules to align SCCA arbitrations with international best practice.
We discuss these changes in more detail below:
The SCCA Court
One of the most prominent features of the New Rules is the establishment of an SCCA Court to make key administrative decisions relating to SCCA administered arbitrations.
The SCCA Court comprises 15 judges with decades of arbitration court experience. The SCCA Court judges come from a range of backgrounds including international arbitrators, academics, former leaders of arbitral institutions, retired appeal court judges, and high profile practitioners, including Clyde & Co partner Professor Loukas Mistelis. Professor Jan Paulson, who is well known in the international arbitration community, has been elected as the SCCA Court President with Dr. Ziad Al-Sudairy and Mr. James Hosking serving as vice presidents.
The introduction of the SCCA Court will bring the SCCA in line with other international arbitration institutions such as the LCIA and ICC, each of whom have their own supervisory Court.
Updating existing procedures
Another key feature of the New Rules are the substantial updates to existing arbitration procedures under the Old Rules which have been introduced to streamline the arbitration process. By way of example.
- Pursuant to Article 4.1, a notice of arbitration can now be served electronically;
- Article 7 contains detailed provisions for the granting of emergency relief;
- Under Article 16, the procedure for the appointment of the arbitral tribunal has been tightened up with specific time limits for the nomination and appointment of arbitrators. There are now also specific provisions relating to the appointment of sole arbitrators and 3 member tribunals;
- Article 18 contains more detailed provisions for challenging arbitrators. In addition to a challenge based on the arbitrator’s impartiality or independence, an arbitrator may be challenged if he or she has failed to perform his or her duties or manifestly does not possess the qualifications agreed to by the parties;
- Article 24.4 introduces a time limit to any challenge to the arbitral tribunal's jurisdiction and requires such a challenge to be made no later than the time of the transmission of the answer to the request for arbitration to the tribunal;
- Article 25.2 tightens up the timeframe for conducting the initial case management conference and provides that the tribunal shall convene the conference within 30 days from the date of its constitution;
- In relation to the conduct of the arbitration hearing:
- Article 27 provides the tribunal with a wide discretion to make any procedural order to limit the length or content of, or dispense with written submissions or the testimony of witnesses;
- Article 29 provides that the tribunal may decide the dispute on a documents only basis;
- Article 30 contains detailed provisions with regard to the giving of evidence by witnesses of fact;
- Article 31 contains detailed provisions with regard to the appointment of independent experts by the tribunal and the submission of evidence by tribunal appointed experts.
- Section V of the New Rules also introduces more prescriptive rules in relation to the issuing of the arbitral award, the correction of the award, and the apportionment of costs between the parties.
The New Rules feature a number of new provisions which did not feature in the Old Rules. These include:
- Article 11 which provides for claims arising out of or in connection with more than one contract or arbitration agreement to be referred to a single arbitration;
- Article 13 which contains detailed provisions with regard to the consolidation of two or more arbitrations where the parties have agreed to consolidation, or where the claims are made under the same arbitration agreement or where the disputes arise in connection with the same legal relationship;
- Article 17.6 which requires parties relying on litigation funding to identify the third-party funder;
- Article 26 which provides for new procedures to allow for the early disposition of claims or defences. This new rule provides for a form of summary judgment to dispose of issues such as jurisdictional challenges, admissibility of evidence or the legal merits of a claim or defence, without the need to follow every step that would otherwise be taken in the ordinary course of an arbitration. Article 26 effectively allows the Tribunal to:
- Strike out a claim based on an allegation of fact or law that is manifestly without merit
- Strike out a claim even if the facts advanced are assumed to be true but no award could be issued in the claimants favour under the applicable law
These new provisions reflect recent trends in international arbitration and give the tribunal in SCCA arbitrations a greater degree of flexibility to dispose of arbitrations effectively and efficiently.
The New Rules are a significant improvement over the Old Rules and bring the SCCA firmly in line with other international arbitration institutions. In particular, they are more detailed, more prescriptive and provide a greater degree of clarity and certainty to the arbitration process than was the case under the Old Rules.
Most importantly, the changes introduced under the New Rules will bring SSCA arbitrations in line with international best practice and will further enhance the Kingdom’s growing reputation as an arbitration friendly jurisdiction.