Update to the SCCA Arbitration Rules

The Saudi Center for Commercial Arbitration (‘SCCA’) has published the new SCCA Arbitration Rules (‘2023 Rules’). The publication of the 2023 Rules are broadly in line with the SCCA’s goal to establish itself as a global arbitration hub and the preferred choice for ADR in the region. We have previously commented on the steps the SCCA has taken to strengthen the governance and efficiency of arbitration in the Kingdom (https://beale-law.com/article/the-saudi-center-for-commercial-arbitration-opens-scca-dubai/) and the release of the 2023 Rules mark another significant development on this journey.

Key Changes

The SCCA has stated that the 2023 Rules have been developed in accordance with international best practices and interestingly, also noted that they “contain prescriptive provisions to ensure that disputes are resolved fairly, efficiently, and promptly while upholding the fundamental principle of due process”[1].

The 2023 Rules come into force from 1 May 2023 and will apply to all SCCA Arbitrations commenced on or after that date.

The 2023 Rules introduce:

• the SCCA Court;
• the expansion of the Tribunal’s discretionary powers;
• the use of technology, such as the electronic transmission of documents, presentation of evidence utilizing electronic means, and the electronic signing of awards
• the improvement of arbitration timelines;
• the implementation of other emerging practices in international arbitration such as the regulation of arbitrations involving multiple contracts and parties, with provisions for joinder, consolidation, and coordination of parallel arbitrations (Articles 13 and 14); and
• a procedure which makes small claims not exceeding SAR 200,000 (approx. USD $53,300) automatically subject to the amended Online Dispute Resolution Procedure Rules (Appendix 4, Article 1).

The SCCA Court

The 2023 Rules replace the SCCA Committee for Administrative Decisions with the SCCA Court, which will operate in a manner which is similar to that of the ICC Court or the London Court of International Arbitration.

The SCCA Court is made up of 15 international arbitration experts from 12 different countries and will be responsible for making key administrative decisions in relation to aspects of the arbitration process, including  the scrutiny and approval of draft awards.

Discretionary Powers

Tribunals have been expressly empowered with the discretion to determine issues which aim to ensure the efficiency of the arbitration, including the power to:

• reject changes in party representation to safeguard against conflicts and the finality of the award considering the stage of the arbitration (Article 9.3);
• encourage parties to consider resolving their dispute by negotiation or mediation (Article 25.7);
• make procedural orders limiting the length of written submissions, oral testimony, or requiring the parties to share correspondence only through electronic means (Article 27); and
• determine the appropriateness of holding a hearing and the format of any such hearing (Article 29).

Technology

The 2023 Rules encourage the use of technology to minimise the environmental impact and optimise efficiency by:

• allowing documents to be filed electronically (Article 4);
• allowing all administrative conferences to be held remotely (Article 10);
• allowing a determination to be made by the Tribunal on “the extent to which technology shall be used in view of all the circumstances of the case” (Article 25(2));
• allowing the Tribunal to determine if a hearing will be conducted, in whole or part, by videoconference or other appropriate means of communication (Article 29(2));
• allowing the signing of awards by the Tribunal electronically (subject to applicable law) (Article 36).

Challenge to Arbitrators and Arbitration Timelines

The 2023 Rules add two new grounds on which an arbitrator may be challenged, (1) where an arbitrator fails to perform his or her duties and (2) if the arbitrator does not possess the qualifications agreed to by the parties (Article 18).

The 2023 Rules also introduce new applicable timelines in which arbitrators are to issue their awards in order to facilitate the timely issuance of awards. These provide that:

• emergency arbitrators are to issue interim awards or orders within 14 days from the transmission of the case file (Appendix 2, Article 7); and
• Tribunals are to issue final awards within 75 days from the close of proceedings (Article 33).

Other Significant Changes

Two other interesting additions in the 2023 Rules include:

• that a party may request the Tribunal’s permission to amend or supplement its Request for Arbitration, the Answer or any statement of claim or defense following the constitution of the Tribunal, and the Tribunal may allow it, subject to the provision of appropriate security by the requesting party (Article 8). We assume the intention of such security would be to cover the SCCA and Tribunal costs, but guidance on this is expected to be provided in the practice notes; and
• the expedited Online Dispute Resolution Procedure Rules have been amended take precedence over the 2023 Rules for small disputes where the aggregate amount in dispute does not exceed SAR 200,000 (exclusive of costs of arbitration).

The release of the 2023 Rules is another significant development in the SCCA’s journey to becoming a leading institution in the region. It is clear they have made a concerted effort to demonstrate that they are able to administer proceedings in accordance with international best practice, while also utilising the efficiencies which can be derived from the use of the latest technology. It will be a matter for users to ultimately determine whether the SCCA’s commitment to innovation and best practice results in it meeting its ambitious goals, but in our view, these changes are another welcome development to the arbitration landscape in the Middle East.

[1] https://sadr.org/ADRServices-arbitration-arbitration-rules?lang=en