Akıncı Arbitration Newsletter - June 2023

New Rules of Saudi Centre for Commercial Arbitration (SCCA) Has Been Published

Saudi Centre for Commercial Arbitration (“SCCA”) has published the 2023 Arbitration Rules (the "Rules"). The Rules were developed as the second version of the SCCA Arbitration Rules which were adopted on 1 May 2016. Saudi Arabia aims to become one of the leading alternative dispute resolution centres in the region by 2030. The revised Rules are considered as a significant development in this respect.

One of the important changes introduced by the Rules is the establishment of the SCCA Court of Arbitration. The Court of Arbitration is vested with many powers, including the appointment of arbitrators and the determination of the advance on costs.

In addition, the use of technology in the proceedings has been increased, and many opportunities such as electronic submission of request for arbitration and e-signature of the arbitral award have been introduced.

Further, under the revised Rules, it is now procedurally possible to consolidate arbitrations arising out of multiple contracts and to consolidate cases. Moreover, the powers of the arbitral tribunals have been expanded, and the arbitral tribunals have been granted additional powers such as determining the conduct of the hearing, intervening in changes in party counsel and encouraging the parties for settlement. The early disposition of claims or defences is another innovation introduced in the Rules.

It must be noted that the Rules will apply to arbitration proceedings commenced as of 1 May 2023.

Court of Cassation Decided that Claims in Relation to the Annulment of Objection Against Enforcement Proceedings Can Be Heard by the Arbitral Tribunals and Arbitrators Can Award Damages for Debt Denial

In the arbitration proceedings subject to the annulment proceedings, the arbitral tribunal partially annulled the respondent's objection to the enforcement proceedings. The respondent requested the annulment of the arbitral award, stating that the annulment of the objection to the enforcement proceedings cannot be subject to arbitration and that the arbitrator's award of damages for debt denial was erroneous. The respondent also argued that it was unlawful not to distribute the costs of the proceedings in proportion to the accepted/denied claims of the case, that the arbitral tribunal did not conduct an expert examination and acted contrary to the principle of equality of the parties.

The Regional Court of Appeal rejected the respondent's objection and concluded that the annulment of the objection to the enforcement proceedings was arbitrable and that damages for debt denial could be awarded in arbitration. In addition, with regard to the right to be heard and the use of expert evidence, the court stated that the parties have duly submitted their evidence during the arbitration proceedings and the arbitrator has a discretion to receive an expert report during the proceedings, the determination and analysis of the applicable legal rules belong to the arbitrator, and the merits of the arbitrator's decision are not subjected to review in annulment proceedings. Finally, the court also rejected the respondent's objection regarding the costs of the proceedings. Thus, the court rejected the request for annulment of the arbitral decision.

Upon appeal, the 6th Civil Chamber of the Court of Cassation upheld the decision of the Regional Court of Appeal with its decision dated 13 February 2023 and numbered E. 2023/260 K. 2023/544.

What Happened in Turkish Arbitration in April 2023?

At the seminar organised by the Society of Construction Law, Turkey on "Negotiation and Dispute Resolution Methods from Claim to Arbitration", Prof. Dr. Ziya Akıncı and Fatma Güney, partners of our office, shared their knowledge on the subject and answered the questions of the participants.

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