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A.         LEGISLATION AND RULES

A.1       Legislation

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. The SCCA commenced operation in 2017. It is a sophisticated arbitration center based on UNCITRAL rules.  

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.

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.

In November 2022, the SCCA announced that it has opened its first office outside of Saudi Arabia in the Dubai International Financial Center, one of the most prominent centers in the region. The SCCA is operating in the UAE under the name of “SCCA Dubai” and offers arbitration and mediation proceedings services in the UAE.

Moreover, in continuation of its approach to follow international best practices, the SCCA established the SCCA Court in November 2022. The court is tasked with determining matters relating to SCCA-administered arbitrations and mediations such as emergency applications, consideration of jurisdictional objections, and administrative appointment of arbitrators. The SCCA Court will not intervene in matters which are exclusively vested with the arbitral tribunal.

The SCCA is expected to revise its Arbitration Rules in early 2023.  

B.         CASES

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.

The SCCA has published statistics relating to the enforcement of arbitral awards in the Kingdom for the years 2017 to 2021. It appears from the publication that of the 107 motions to annul an arbitral award (apparently covering both domestic and foreign awards), 94% of the motions were denied and only 6% were granted on grounds relating to violation of Sharia and public policy (3%), composition of conflicted arbitral tribunal (1%), award did not end the dispute (1%), and award lacked majority vote (1%).

Author

Abdulrahman Al Ajlan is a partner and head of the litigation practice in Baker McKenzie's Riyadh office. He has been practicing law in Saudi Arabia for 15 years and has extensive experience in litigation and arbitration in the Kingdom.

Author

Anton Mikel is a partner in Baker McKenzie's Riyadh office. He specializes in litigation and arbitration.

Author

Rami Bou Raad has been practicing in the Middle East for many years. He specializes in litigation and disputes resolution across a variety of industry sectors, including construction, real estate, pharmaceutical and general commercial disputes.