Saudi Center for Commercial Arbitration Service Reduce Costs, by 30%

The Saudi Center for Commercial Arbitration has launched a package of facilities, to make at avail of disputants its range of arbitration services, foremost of which is the reduction of arbitrators’ fees, by up to 30%.

The fees for case registration was reduced by 50%, and a new methodology for calculating arbitrators’ fees, based on the value of the arbitrator’s working hour, was introduced, with the aim of supporting the business sectors and the investment environment.

The step comes after the center’s board adopted several amendments to the first annex of the center’s rules, and in an effort to enable broad segments of business sectors and investors to benefit from the package of institutional arbitration services, provided and to be accessible to commercial establishments, of various sectors, sizes and nationalities.

The amendments included the first annex of the arbitration rules, which had become effective starting as of the 1^st of September 2021; reducing the cost of .filing lawsuits by 50% in most cases, so that they are consolidated with a fixed fee calculated upon the total final fee

The center restructured its administrative fees, setting a ceiling for them, so that they shall not exceed, no matter how much the amount in question increased; starting from SR2000 and shall not exceed the barrier of SR300,000. It also restructured the arbitrators’ fees, after reducing them by up to 30%, in order to achieve a higher level of transparency.

The center has established a maximum and minimum limits for the arbitrators’ fees and an average between them.

It sets that the final fees in each case shall not depart the two limits.

Depending on the complexity of the dispute, the effort exerted and the time taken by the arbitrator to rule on the case, setting an highest and lowest limits for the fees; would help achieving justice in pricing between the parties to the cases and the arbitrators, by increasing and decreasing the fees, and enabling the two parties to predict the costs of arbitration, before the start of the case procedures.

The center has introduced a new additional methodology for calculating the arbitrators’ fees, according to the value of the arbitrator’s working hour, in addition to the methodology for calculating fees, according to the value of the amount in dispute or (Ad-Valorem method).

In terms of an online arbitration, the center has reduced the costs of this service by 40%, in order to facilitate the benefit of business sectors, especially entrepreneurs and small and medium enterprises, in addition to large companies, in case of their disputes with small-sized enterprises.

As well as restructuring arbitration costs and fees; the amendments to Annex I of the Arbitration Rules provided financial facilities for the payment of center’s fees and arbitrators’ fees, including payment in instalments and payment by letter of bank guarantee, in cases where large sums of money are required, in advance.

To help clients estimate the costs of arbitration, the center has provided an interactive calculator, that gives its user a preliminary knowledge of the arbitration costs, in a way that compares the various arbitration services provided by the center, which increase and decrease by rates ranging between 25 and 200%, according to the type of service required and the number of arbitrators.

Chairman of Board of the Saudi Center for Commercial Arbitration, Dr. Walid bin Suleiman Abanmi stressed that the center does not stop developing a system for alternative dispute settlement services, for business sectors locally and internationally, in order to make it a preferred choice for its clients to secure prompt justice..

Amendments to Annex I took into account the activation of the benefit from other arbitration services, which are provided by the center, alongside ordinary arbitration, such as expedited arbitration that provides a fast path to dispute settlement, with financial costs of 20% less than ordinary arbitration, and online arbitration, he added.

The later is to enable the disputants to settle their cases remotely, within a period that shall not exceed 30 days from the appointment of the arbitrator, he elaborated.

Abanmi indicated that the center’s interactive calculator plays a guiding role for its user, in knowing which arbitration services are the least expensive for his commercial dispute; by calculating the initial cost of the arbitration process in a comparative manner, and enabling to choose the appropriate arbitration meeting one’s needs.