Saudi Centre For Commercial Arbitration 2023 Rules
Established in 2014, the Saudi Centre for Commercial Arbitration (SCCA) recently published their revised 2023 SCCA Arbitration Rules. The 2023 SCCA Arbitration Rules, were first adopted on 1 May 2023, and apply to all arbitrations filed with the Centre on or after May 1 of this year. The new rules include some significant changes, and this article, looks at the changes in relation to consolidation/ joinder of proceedings and summary judgment. The revision of the rules aligns with the SCCA’s aim of becoming a preferred ADR choice in the gulf region by 2030. As part of their strategic plan for 2030, the SCCA aims to reinforce its status as an arbitration-friendly jurisdiction that adheres to international best practices.
The rules have been modernised and updated in line with international best practices, after comprehensive review that took into consideration practical and commercial concerns raised by arbitration users and practitioners. Previously the rules required parties to comply with the rules of Sharia in any arbitration held under the auspices of the centre regardless of what applicable law they had chosen. The 2023 rules now provide at Article 37 that the Tribunal must apply the law designated by the parties and in default of any party provision the Tribunal must apply the most appropriate rules.
In a notable improvement from the 2021 Rules, the 2023 Rules have introduced comprehensive provisions for the consolidation, joinder, and coordination of proceedings in a single arbitration. These new rules streamline complex disputes and provide an efficient and effective resolution process for parties involved in complex commercial relationships. Consolidation of claims arising from multiple contracts or arbitration agreements is now permitted under Article 11. Consolidation is allowed when the relief sought arises from the same or related transactions, there is a common question of law or facts, and the multiple arbitration agreements involved are compatible. Notably, and without fettering the Arbitral Tribunal‘s authority to rule on its jurisdiction into the proceeding, the SCCA Court has the discretion to determine consolidation applications before the constitution of the Arbitral Tribunal; ensuring that proceedings can commence smoothly and with minimal disruption.
Article 12 of the new rules modernizes the joinder provisions for additional parties in ongoing arbitrations. The Rules encourage parties to apply for joinder to the Administrator before the appointment of any arbitrator. After an arbitrator has been appointed, the party seeking to join an additional party must demonstrate that all parties, including the additional party, agree to the joinder and accept the constitution of the Arbitral Tribunal. Alternatively, the additional party must agree to the joinder, accept the constitution of the Arbitral Tribunal, and the Arbitral Tribunal must determine the joinder to be appropriate. The Arbitral Tribunal will consider various factors, such as jurisdiction, timing of the joinder request, conflicts of interest, and the impact on the arbitration process. Procedural efficiency is a key consideration, with the timing and impact of the joinder request on the proceeding given due weight.
Under Article 13, the SCCA Court is empowered to consolidate multiple arbitrations into a single proceeding. Consolidation is permitted when parties agree to it, when all claims are made under the same arbitration agreement(s), or when claims arise in connection with the same legal relationship and the arbitration agreement(s) are compatible. In deciding on a consolidation request, the SCCA Court considers factors such as the compatibility of applicable law, the appointment of arbitrators, progress in the arbitrations, common issues of law or facts, and the interests of justice and efficiency. To facilitate consolidation, the SCCA Court can complete the appointment of the Arbitral Tribunal, modify appointments, or select arbitrators from the previously appointed panels; measures considered as forward thinking.
Article 14 grants the Arbitral Tribunal discretion to coordinate proceedings and harmonize procedural aspects to facilitate the issuance of a single award in relation to all arbitrations, or to suspend any of those arbitrations until after the determination in another. This coordination is allowed when the same Arbitral Tribunal is constituted in each arbitration, a common question of law or facts arises in each arbitration, and coordination will assist in resolving the dispute(s) in an expeditious and cost-effective manner. Once again, these are progressive concepts, clearly aimed at disentangling procedural complexities involved in consolidation of proceedings at a point when one or both of the arbitration(s) subject to consolidation are procedurally progressed.
It is evident that the SCCA Court and the Arbitral Tribunal are provided with a healthy range of powers to effectively manage the proceeding’s and harmonise both the process and outcome in multiple contract and multiple party proceedings in a single arbitration. By offering a robust platform and, an intelligent and time-efficient process for the management of the consolidation of arbitrations and the joinder of parties, these rules provide a more efficient system for parties involved in complex commercial relationships.
The revision to the SCCA rules sees at Article 26 the Tribunal allowed to dispose of jurisdiction, admissibility or legal merit issues, advanced before it in a claim/ defence, without needing to follow all steps that might otherwise need to be addressed in an arbitration. As a result, a form of summary judgment is established, and this looks to promote the attractiveness of the centre by allowing Tribunal’s to address claims that inter alia lack merit.
The SCCA has been active in promoting its reach in recent years. The rules introduced a couple of months ago follow earlier rules in 2021, 2018 and its initial 2016 rules, and mark a positive step towards facilitating the streamlined resolution of disputes and the adjudication of disputes in complex commercial relationships. The SCCA have engaged in a series of roadshows, to promote the rules, and Leonora Riesenburg, from 4-5 Gray’s Inn International Arbitration Group, moderated a panel discussion by leading international practitioners on the 2023 rules, at the DIFC Academy on in June of 2023.
Members of 4-5 Gray’s Inn’s International Arbitration Group have experience of a wide range of jurisdictions. Leonora Riesenburg, based in Dubai, and Arran Dowling-Hussey examine the revised rules of the Saudi Centre for Commercial Arbitration (‘SCCA’). For any queries as to the availability of members of the group email: [email protected]
