SCCA Annual Seminar at Dubai Arbitration Week Explores the Promising ADR Outlook in Saudi Arabia
Published Date: 21/11/2023
Findings Released From 3rd SCCA Study of Saudi Case Law Related to Arbitration
Following a series of events held since the beginning of 2023 in, among other cities, New York, London, Paris, Beijing, Shanghai, and Abu Dhabi, the Saudi Center for Commercial Arbitration (SCCA) has held its third annual seminar at Dubai Arbitration Week (DAW), which took place on November 13–17, 2023, and addressed “Exploring Legal Frontiers in ADR and KSA”. SCCA members also spoke at various other key events during that week highlighting the supportive arbitration environment that Saudi Arabia has become and presenting recent SCCA achievements, in particular the publication of the SCCA Court Internal Rules and the publication of the 2023 edition of the SCCA Arbitration Rules.
SCCA’s third annual seminar, held on 16 November 2023, enjoyed a full house, gathering prominent figures from the public and private sector, including government representatives, arbitrators, practitioners, and academics linked to commercial arbitration in the region. The attendees shared their insights on developments and local and international trends in the industry.
The first panel discussed the recent developments in Saudi legislation. In particular, the upcoming Saudi Civil Transactions Law has been heralded as a milestone that will stimulate more investment in Saudi Arabia by enhancing transparency, certainty, and predictability in legal outcomes. The panelists described the law as a noteworthy reform in the Saudi legal system that will have an immediate positive impact on the arbitration and ADR industry in particular, the judicial environment in general, and, in the long term, Saudi Arabia’s international commercial transactions.
The second panel explored two key items in international arbitration, joinder and consolidation, and their role in facilitating the resolution of disputes involving multi-contracts and multi-parties. The panel discussed how these two concepts enhance the effectiveness of arbitration, especially in the built industry and banking & finance that are known for multiple parties with multiple contractual relationships. The panel highlighted that the 2023 SCCA Arbitration Rules have dedicated an entire section in this regard in line with international best practices.
The seminar concluded with a comprehensive report on SCCA’s findings in its third study of Saudi case law related to arbitration. SCCA announced that it reviewed a batch of 700 Appeals Court judgments from 2022. The results show continued judicial support in aid of arbitration. SCCA reported that of the 716 motions filed with the Appeals Courts, 316 relate to arbitral awards. The report further revealed that 88 of these 316 motions (27.85%) relate to motions to annul the award. Of the 88 motions to annul only 5 (5.68%) were successful, that is, 83 motions to annul (94.32) were denied.
SCCA then analyzed the reasons why motions to annul are being filed with the Appeals Courts. Based on these 88 motions to annul, SCCA identified 102 grounds of which 13 pertain to asserted violations of Shari’ah (12.75). SCCA drew the conclusion from this data that Shari’ah continues to play minor role in Saudi’s annulment statistics. In fact, this 2023 batch of 700 judgments did not showcase a single Shari’ah-based ground that was successful. When taking a step back and looking at the overall results of the SCCA study over the past three years, of the 349 motions to annul found in a 2017-2022 batch of 1420 Appeals Court judgments, only 5 motions to annul based on Shari’ah (1.43%) were successful.
SCCA then also revealed further statistics from the Saudi Enforcement Court and analyzed two significant Supreme Court judgments that embraced the res judicata effect of arbitral awards. The Supreme Court emphasized that this requires stripping any other (judicial) bodies off the jurisdiction to reconsider the facts or subject matter of the dispute, a concept codified in Article 50(4) of the Saudi Arbitration Law. In both decisions, the Supreme Court overturned the Appeals Court judgments (annulling the award) and remanded the matter to the Appeals Courts for further action. The Supreme Court emphasized that when a court’s consideration extends to the examination of the validity or even the correctness of the arbitral tribunal’s ruling, it has thereby overstepped the boundaries of its jurisdiction, as that is within the exclusive jurisdiction of the arbitral tribunal.
SCCA held its third annual seminar and otherwise participated in DAW as an extension of efforts SCCA has exerted locally and internationally, and a continuation of its ongoing outreach activities. During 2023, SCCA held events in New York, London, Paris, Beijing, Shanghai, Dubai, Abu Dhabi, and a number of Saudi cities to showcase Saudi Arabia as a safe, mature, and trustworthy seat of arbitration, and the advanced level support in aid of arbitration Saudi Arabia has achieved thanks to the executive, judicial, and legislative support it enjoys. This will enhance Saudi Arabia’s reputation as a safe domestic and international arbitration ecosystem that attracts and supports investments and business leaders in line with Saudi’s Vision2030.