Saudi Center for Commercial Arbitration (SCCA): A Practical Guide

The Saudi Center for Commercial Arbitration (SCCA) is an independent, non-profit institution based in Riyadh that administers the arbitration and mediation of commercial disputes, both between Saudi parties and in international business. A company uses it by agreeing with the other side, usually through a clause in the contract, that disputes will be settled by arbitration under the center’s rules instead of in the courts. The center then manages the case, and the arbitral tribunal issues a binding award that is enforced through the Saudi enforcement courts.

What the Saudi Center for Commercial Arbitration is

The center was established by a decision of the Council of Ministers to give businesses in the Kingdom a local institution for resolving commercial disputes outside the courts. It does not decide disputes itself: arbitrators decide them, or, in mediation, the parties settle with a mediator’s help. The center administers the process under its published rules, keeps lists of qualified arbitrators and mediators, appoints them where the parties do not, and manages the case file and fees.

Its work sits within the Saudi Arbitration Law, which follows the UNCITRAL Model Law on International Commercial Arbitration, the reference text many countries have built their arbitration laws on. The Kingdom is also a party to the New York Convention on the recognition and enforcement of foreign arbitral awards, which matters when an award has to be enforced abroad, or a foreign award in Saudi Arabia.

Arbitration or the courts: when arbitration makes sense

Commercial disputes in the Kingdom go to the commercial courts unless the parties have agreed to arbitrate. Arbitration usually makes sense when:

• The parties are from different countries and want a neutral forum and an award that can be enforced abroad under the New York Convention.
• The dispute is technical, as in construction, energy, technology or finance, and the parties want arbitrators who know the field.
• Confidentiality matters, because arbitration hearings are private, unlike court hearings.
• The parties want control over the procedure, such as the language, the number of arbitrators and the timetable.
• Finality matters: an award cannot be appealed on its merits and can only be challenged on limited grounds.

The courts may be better for small claims, where arbitration costs can outweigh the amount in dispute, and for simple debt collection where the facts are not contested. Some matters cannot go to arbitration at all, such as personal status matters and others in which settlement is not permitted. Government bodies need a specific approval before agreeing to arbitration, so check this before signing a contract with one.

How to write an arbitration clause that names the center

The Arbitration Law requires the arbitration agreement to be in writing, either as a clause in the contract or as a separate agreement, signed before or after a dispute arises. The safest starting point is the model clause the center publishes, which reads along these lines:

“Any dispute, controversy or claim arising out of or relating to this contract, including its breach, termination or validity, shall be finally resolved by arbitration administered by the Saudi Center for Commercial Arbitration in accordance with its Arbitration Rules.”

Then add the points the model clause leaves to you:

• Seat of arbitration: the city whose law governs the procedure and whose courts hear any challenge, for example Riyadh.
• Number of arbitrators: a sole arbitrator for smaller or simpler disputes, or three for larger ones.
• Language: under the Arbitration Law, arbitration is in Arabic unless the parties agree otherwise, so state English or both if you want them.
• Governing law: the law that governs the contract itself.
• Mediation first, if you want it: a tiered clause can require the parties to try mediation at the center before arbitration starts.

Make sure the signatory has authority to agree to arbitration for the company, and use the same clause across related contracts so one dispute is not split between forums. If the other side later goes to court despite the clause, raise the arbitration agreement at the start, before any defense on the merits, so the court declines the case. Have a licensed lawyer review the clause before you sign any significant contract; Innovant can help you take stock of your contracts and organize the records a case will need.

How a case runs at the center

The request for arbitration

The claimant files a request for arbitration with the center, which can be done online. It names the parties, attaches the contract and the clause, describes the dispute and the relief sought, deals with the nomination of arbitrators, and comes with the registration fee in the center’s fee schedule. The center then notifies the respondent.

The answer

The respondent answers within the time the rules allow, addressing the claim and the arbitrators and adding any counterclaim.

Forming the tribunal

The arbitrators are appointed as the parties agreed; where they did not agree, or a party fails to nominate, the center appoints. Each arbitrator must disclose anything that could raise doubts about independence or impartiality, and a party can challenge an arbitrator on those grounds. The Arbitration Law requires the arbitrator, or the presiding arbitrator of a panel, to hold a university degree in Sharia or law.

Procedure and hearings

The tribunal meets the parties early to set a timetable, then receives written submissions, documents, witness statements and expert reports, and holds hearings in person or remotely. It can order interim measures. The center’s rules also provide an emergency arbitrator for urgent relief before the tribunal is formed and an expedited procedure for some cases, and state when each applies.

The award

The tribunal issues a written, reasoned award signed by the arbitrators, and it binds the parties. Administrative fees and arbitrators’ fees, which depend largely on the amount in dispute, are set out in the center’s fee schedule, and the award usually decides who bears the costs.

Mediation at the center

Mediation is a separate, voluntary service. A neutral mediator helps the parties negotiate a settlement but does not decide the dispute. It is usually quicker and cheaper than arbitration, confidential, and easier on the business relationship. If the parties settle, they sign a written settlement agreement; if not, they remain free to arbitrate or go to court as their contract provides. Have a lawyer draft the settlement agreement so that it is clear and enforceable.

Enforcing the award

An arbitral award made in the Kingdom becomes enforceable once the competent court issues an order to enforce it. It is then executed through the enforcement courts like a judgment, with applications filed through Najiz, the Ministry of Justice platform. The court does not reopen the merits. It checks a short list of conditions, chiefly that the award does not conflict with Islamic Sharia or public order, does not contradict an earlier judgment of a Saudi court on the same matter, and was properly served on the losing party.

The award cannot be appealed, but the losing party can bring an action to annul it on limited grounds set out in the law, such as an invalid arbitration agreement, a party that could not present its case, or a tribunal that ruled beyond what was referred to it. Foreign arbitral awards are enforced in the Kingdom under the Enforcement Law and the New York Convention, subject to similar checks. Enforcement and annulment are court matters, so use a licensed lawyer for both.

Common mistakes

• Writing a vague clause such as “disputes will be settled by arbitration in Saudi Arabia”, or misspelling the center’s name, instead of naming the center, its rules and the seat exactly.
• Agreeing to arbitration with a government body without checking the required approval.
• Going to court on a contract that has an arbitration clause, or failing to raise the clause in time when the other side does.
• Leaving documents and correspondence scattered until a dispute starts. A well-organized file is the cheapest advantage in any arbitration.

Frequently asked questions

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