New Rules for the SCCA—The Changes and How They Compare
The stated aim of the Saudi Center for Commercial Arbitration (SCCA) is to become the Middle East’s preferred centre for alternative dispute resolution by 2030. This week, the SCCA launched its revised Arbitration Rules, which the SCCA accurately describes as being in conformity with the latest international standards and best practice being followed by other eminent arbitral institutions.
Provided with this article are two easy reference comparison tables which juxtapose the SCCA rules with those of (i) the “top 5” arbitration rules (ICC, LCIA, SIAC, HKIAC and CIETAC) and (ii) the Middle East’s most prominent arbitration rules (ADGM, ADCCAC, BCDR, DIAC and QICCA). The tables can of course be joined to enable comparison between any combination of the aforementioned rules.
Key Changes
The SCCA Court—Impressive and Empowered
The SCCA Court is a 15-member body independent of the SCCA.1As highlighted in the introduction to the new rules, the SCCA Court is now empowered to determine key administrative aspects of the arbitration process. These responsibilities can include: (i) appointing, removing and replacing arbitrators;2 (ii) determining consolidation applications;3 (iii) fixing costs, including administrative and arbitrator fees;4 and (iv) conducting the procedural review and approval of awards (which may include proposing modifications as to form).5 Except where the rules provide otherwise, decisions of the SCCA Court are final and binding upon the parties and the Arbitral Tribunal.6
Choice of law—to be applied without caveat
The new rules make clear that Tribunals will apply the law which is designated by the parties as applicable to the substance of the dispute. By removing the “without prejudice to the rules of Sharia” caveat that appeared in the old rules, the SCCA is now aligned with the rules of other prominent centres. This adjustment will maximise uptake of the rules outside of the Kingdom. If the parties make no designation on the applicable law, the Tribunal will apply the law that they determine to be appropriate.7
Multi-contract and multi-party arbitration
A single Request for Arbitration (RFA) may be issued for claims arising out of or in connection with more than one contract or arbitration agreement where (i) the relief sought arises out of the same transaction or a series of related transactions; (ii) a common question of law or fact arises under each arbitration agreement giving rise to the arbitration; and (iii) if applicable, the multiple arbitration agreements under which the claims are made are compatible.8Objections to the use of a single RFA will be referred to the Tribunal once constituted, unless the SCCA as administrator refers an objection to the SCCA Court for determination.9
On joinder, it remains the position that a request for joinder can be submitted to the SCCA as administrator. No party may be joined after the appointment of an arbitrator, unless all parties agree (including the additional Party, which must accept the constitution of the Tribunal), or the additional party agrees with the joinder, accepts the constitution of the Tribunal and the Tribunal determines the joinder is appropriate (notwithstanding the lack of unanimous agreement by the parties).10
Summary dismissal provisions—greater clarity and firmer timelines
Whereas the old SCCA rules did not include express provision for summary dismissal, the new rules provides that either party may apply to the Tribunal to dispose of issues of jurisdiction, admissibility or legal merit in a claim or defence.11 The rules illustratively note that an application of this kind may concern assertions that (i) an allegation of fact or law material to the case is manifestly without merit; (ii) no award can be issued in a party’s favour under applicable law; or (iii) a material issue of fact or law is suitable for determination by way of early disposition.12
The deadline for a summary dismissal application is 30 days from the filing of the concerned claim or defence, and the Tribunal will issue its order or award – having heard from the parties – within 30 days of the application being allowed to proceed (subject to a maximum 15-day extension at the discretion of the SCCA in exceptional circumstances).13
Maximising process efficiency—including through technology
Consistent with international best practice, the new SCCA rules stipulate that the Tribunal will look to maintain efficiency and economy in the conduct of the proceedings. To that end, by way of example, the new rules:
- encourage the Arbitral Tribunal and parties to consider how technology, including electronic communications, e-filings and the electronic presentation of evidence, could be used both generally and with a view to reducing the arbitration’s environmental impact;14
- provide that Tribunals may make procedural orders that dispense with or limit the length or content of written submissions, require the use of electronic communications and/or limit the written or oral testimony of any witness;15
- state that Tribunals may at their discretion decide preliminary issues, bifurcate proceedings, direct the order of proof, exclude cumulative or irrelevant testimony or other evidence, and direct the parties to focus their presentations on issues whose resolution could disposal of all or part of the case;16 and
- specify that Tribunals may decide a dispute on a document-only basis unless a party requests a hearing and the Tribunal deems it appropriate in the circumstances to hold one, whether in-person, remotely by video-conference or in a hybrid format.17
While the new rules are in nearly all respects more efficient, there is one outlier: under the old rules an award was to be issued no later than 60 days from the close of the hearing unless otherwise agreed, specified by law or determined by the SCCA; under the new rules, the deadline is now 75 days unless otherwise agreed or extended by the SCCA on its own initiative or by the Tribunal’s request.18 This change is no doubt motivated by a desire to ensure that the default timeline is more appropriate to the increasing volume and complexity of disputes being conducted under the SCCA rules. The 75-day deadline to issue an award is the only time period in the rules that cannot be extended at the discretion of the Tribunal (or by the SCCA as administrator before the Tribunal is constituted).19
Interim measures—clear powers, tests and timelines
The new rules also firm up the position on interim measures. In respect of interim measures prior to the constitution of the Tribunal, the new rules expand on the old rules. In short: an emergency arbitrator will be appointed within one business day of the application being received (consistent with the old rules) and the emergency arbitrator’s interim award will be issued within 15 days from the date that the case file is transmitted (a new time-limit, which is subject to extension by the SCCA if necessary).20 As in the old rules, the emergency arbitrator shall have the power to award any interim, provisional or precautionary measures that he or she deems necessary (including injunctive relief and measures for the protection or conservation of property).21 Unlike the new DIAC Rules, however, there is no provision in the new SCCA rules for without notice applications for interim measures.
As to interim measures after the constitution of the Tribunal, the new rules expressly stipulate (consistent with the old rules) that the Tribunal may on application by a party grant interim measures, including an order to maintain or restore the status quo pending determination of the dispute, to prevent actions likely to cause harm or prejudice to the arbitral process, to preserve assets, or to preserve evidence that may be relevant and material to the resolution of the dispute.22 As before, to succeed with such an application, the applicant will have to satisfy the Tribunal that: (i) any harm which would result absent the order is not adequately reparable by an award of damages; (ii) that harm “substantially outweighs” the harm likely to result to the party subject to the interim measure if it is granted; and (iii) there is a reasonable possibility that the applicant will succeed on the merits of the claim.23
Any interim measures which are granted may be modified, suspended or terminated by the Tribunal on application by any party, or in exceptional circumstances on the Tribunal’s own initiative (after notifying the parties).24
Third Party Funding—transparency required
Reflecting the increasing use of third party funding in the region, the new rules provide that each party must disclose to the SCCA as administrator, all the other parties, and the arbitrators, the identity of any non-party – including a third-party funder - who has an economic interest in the outcome of the arbitration.25
Challenging Arbitrators—two new grounds
An arbitrator may now be challenged on three grounds under the rules.26First, justifiable doubts as to their impartiality or independence. Second, failure to perform their duties. Third, because they manifestly do not possess the qualifications agreed by the parties.27 The time-limit for challenging an arbitrator is now 14 days from being notified of the appointment or becoming aware of the relevant circumstances giving rise to the challenge (down from 15 days under the old rules).28 The SCCA may also on its own initiative (acting in the role of administrator) request that the SCCA Court consider the removal of an arbitrator for failing to perform his or her duties.29
Change in Counsel—Tribunal can refuse permission
Under the new rules, each party must inform the other parties, the Tribunal and the SCCA as administrator if it proposes changing or adding legal counsel – and the Tribunal may refuse to allow a proposed change if it considers the block necessary to safeguard the composition of the Tribunal or the finality of the award. The rules stipulate that in making this decision the Tribunal shall take into account, “among other things”, the stage of the arbitration and the likely impact of the change or addition in representation.30
Encouraging settlement—including through mediation
The new rules provide that, at any time during the arbitration, the Tribunal may encourage the parties to consider settlement of all or part of the dispute either through negotiation, mediation or any other form of amicable dispute resolution.31
The Expedited Procedure Rules—no change
The same expedited procedure provisions that appear in the old rules are in the new rules. In summary, the expedited procedure applies if the parties agree or the aggregate claims value does not exceed SAR 4 Million (c. US$1M).32 The expedited procedure stipulates that an award will be made no later than 30 days from the closure of the proceedings unless otherwise agreed by the parties, specified by law or determined by the SCCA, and in any case the award will be issued within 180 days from the Tribunal being constituted (unless extended by the SCCA in exceptional circumstances).33
The Online Dispute Resolution Procedure Rules—no change
As with the SCCA Expedited Procedure Rules, there is no change to the Online Dispute Resolution Procedure Rules (ODRPR). It remains that the parties can agree to apply the ODRPR where the aggregate claim value does not exceed SAR 200,000 (c. US$500,000).34 If applied, the final award – typically based on the parties’ written submissions – will be issued within 30 days from the date of the arbitrator’s appointment.35
1 Article 3.
2 Article 7 (emergency arbitrator), Article 16 (arbitrators), Article 18 (challenge to arbitrators) and Article 19 (replacement of an arbitrator).
3 Article 13.
4 Articles 41 and 42.
5 Article 36(4).
6 Article 3(2).
7 Article 37(1).
8 Article 11.
9 If the SCCA Court is asked to make a determination, the SCCA Court is required to have regard to the consolidation requirements in Article 13. Article 13(3) reads: “In deciding whether to consolidate two or more arbitrations, the SCCA Court shall have regard to all relevant circumstances, including: (a) the applicable law; (b) the extent to which the same arbitrators have been appointed in all the relevant proceedings; (c) the progress already made in the arbitrations; (d) whether the arbitrations raise common issues of law and/or facts; and (e) whether the consolidation of the arbitrations would serve the interests of justice and efficiency.”
10 Article 12.
11 Article 26.
12 Article 26(1).
13 Article 26(4).
14 Article 25(2).
15 Article 27.
16 Article 25(3) and Article 25(4).
17 Article 29.
18 Article 33(4).
19 Article 4(6). N.B. In addition to the time provision at Article 33(4), the Tribunal is also not permitted to extend any periods of time established by the Administrator.
20 Article 7(8).
21 Article 7(7).
22 Article 28(2).
23 Article 28(3).
24 Article 28(5).
25 Article 17(6).
26 While the first ground was stipulated in the old rules, the second and third grounds for challenge are new.
27 Article 18.
28 Article 18.
29 Article 18(2).
30Article 9(3).
31 Article 25(7).
32Appendix II, Article 2.
33 Appendix II, Article 10.
34Appendix IV, Article 1.
35 Appendix IV, Article 10 and Appendix IV, Article 11.
Authors
