In an attempt to foster "a fair and attractive arbitration environment, promote the spread of the arbitration culture, based on the highest international benchmarks and standards, and reduce the pressure on the court system", the Standing Committee for Arbitration1 (the "Standing Committee"), established under the umbrella of the Council on Saudi Chambers2 (the "Council"), issued on 2/4/1439 H. (20/12/2017 G.) the 'Rules for the Licensing of Saudi Arbitration Centers' (the "Licensing Rules"), as well as the 'Indicative Standards for the Determination of Arbitrator Fees and Expenses' (the "Indicative Standards") and the 'Internal Rules and Regulations Governing the Work of the Standing Committee for Arbitration' (the "Internal Regulations").
2. The Licensing Rules
As the name indicates, the Licensing Rules specify the process and conditions for the licensing of arbitration centers and branches thereto. Arbitration centers must be established either as companies pursuant to the Companies Law or as public entities or professional associations or chambers of commerce and industry. The Licensing Rules mention that the owners of (privately-owned) arbitration centers must be either Sharia or legal jurists and must include at least one Saudi partner.
Amongst other specifications, arbitration centers must operate from premises of at least 250 square meters, located on a commercial street.
Licensees must provide the Committee with a bank guarantee of SR 500,000 to settle any outstanding debts that they may owe following the expiry or termination of their license.
Licenses are granted for renewable three Hijri-year periods.
Arbitration Centers must submit to the Committee an annual report on their activities.
3. The Indicative Standards
Amongst other things, the Indicative Standards require arbitration centers to establish the lower and upper limits for administrative charges and arbitral tribunal fees, provided that arbitral fees and expenses do not exceed 10% of the disputed amount. The Indicative Standards list factors that may be utilized for the determination of arbitral fees and expenses.
4. The Internal Regulations
The Internal Regulations regulate the objects, composition, governance, and authorities of the Standing Committee. As stated in the previous section, the Standing Committee is responsible for the licensing of arbitration centers. It also enacts standards for the registration of arbitrators, as well as indicative rules for the determination of their fees and expenses.
It is worthwhile to note that the Standing Committee is composed of representatives of the Ministry of Justice, the Ministry of Commerce and Investment, the General Investment Authority, as well as three members with Sharia and legal proficiency, and three other members with experience, selected by the Council. The Standing Committee appoints a Chairman and a Vice-Chairman from those members appointed by the Council. The current members of the Standing Committee are listed on the website of Council.3
The Standing Committee also has an executive team, responsible for the management of day-to-day matters.
5. Entry Into Force
The Licensing Rules, the Indicative Standards, and the Internal Regulations have entered into force as from their publication in the Official Gazette on 9 November 2018.
1. Established pursuant to Council of Ministers Decision No. (257) dated 14/6/1435 H. (14/4/2014 G.).
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