A. LEGISLATION AND RULES
International arbitration in the Kingdom of Saudi Arabia continues to be governed by the arbitration law issued by Royal Decree No. 34/M, dated 24/5/1433H (corresponding to 16 April 2012G) and its implementing regulations (which came into force on 7 June 2017), which replaced the arbitration law issued by Royal Decree No. 46/M, dated 12/7/1403H, to which no notable amendments have been made since.
A.2 Institutions, Rules and Infrastructure
The Saudi Center for Commercial Arbitration (SCCA) continues to be the leading domestic and international commercial arbitration center in the Kingdom. On 16 August 2020, the SCCA opened a new branch at King Salman Energy Park, located in Al Khobar (Eastern Province). This new branch is an addition to SCCA’s headquarters in Riyadh, its branch in Jeddah and its representative office in King Abdullah Economic City.
The SCCA does provide for simplified and expedited procedures, which are special fast-track, simplified and reduced cost procedures to administer the arbitration process. Expedited procedures apply in any case where the aggregate amount in dispute does not exceed SAR 4 million (approximately USD 1.07 million). Expedited procedures provide parties with a rapid filing process, abbreviated procedure to appoint the arbitrator, the possibility to render the award based solely on parties’ written submissions without holding hearings, and abbreviated timelines. The final award is rendered within 180 days from the date the tribunal is constituted.
On 31 August 2021, the SCCA announced the launch of a package of enhancements to make its range of services more accessible. They include, among many other things, a reduction in arbitrator fees of up to 30%, a 50% reduction in initial costs for starting most arbitration proceedings, and the flexibility for parties to now agree to a new alternative fee arrangement based on arbitrators’ hourly rates in addition to the existing ad valorem lump sum model.
For Online Dispute Resolution, the SCCA reduced the cost of its service by 40% to make it even more accessible to all business sectors, especially innovators, entrepreneurs and those operating small-to-large-sized enterprises.
Furthermore, to help clients in estimating the costs of arbitration, the SCCA provided an interactive calculator that provides a preliminary assessment of the arbitration costs while comparing the various SCCA arbitration services based on the service selected and the number of arbitrators, the costs may rise or fall by 25 to 200%.
On 9/4/1440H corresponding to 13 December 2018G, the Permanent Committee of Saudi Arbitration Centers granted a license to establish the Saudi Real Estate Arbitration Center (“Center“) as the first center of its kind in the Kingdom of Saudi Arabia and the Gulf states. The Center falls under the umbrella of the Real Estate General Authority and has an independent legal personality administratively and financially. The Center’s objective is to settle disputes related to real estate activities, whose parties agree to settle it by arbitration or through conciliation and reconciliation within the framework of the Centre, by a fast and simplified electronic mechanism.
We are not aware of any new notable arbitration cases to report in the Kingdom. Saudi courts and other adjudicatory authorities do not, in general, report their decisions, and previous decisions of the courts and other adjudicatory authorities of Saudi Arabia are not considered to establish a binding precedent for the decision of later cases. Due to the fact that arbitral awards are not made public, it is difficult to obtain information about new arbitrations.