Once the parties have decided to resort to arbitration, two equally important decisions remain: how will the case be administered, and who will decide it? The arbitrator is the judge of the dispute, and the quality and speed of the award depend to a large extent on choosing well and on the framework within which the arbitrator works.
Institutional arbitration
In institutional arbitration, the parties agree that the dispute will be administered by an arbitration centre under its established rules, such as the Saudi Center for Commercial Arbitration or well-known regional and international centres. The centre handles the administrative side: receiving the request for arbitration, notifying the parties, assisting in constituting the tribunal where agreement fails, and monitoring deadlines.
- Its advantages: clear written rules, professional administration, and ready mechanisms for resolving procedural problems, such as appointing an arbitrator where a party refuses to do so, or handling challenges.
- What to bear in mind: administrative fees in addition to arbitrators' fees, and adherence to the centre's schedules and procedures.
Ad hoc arbitration
In ad hoc arbitration, the parties and the tribunal manage the proceedings themselves, as they agree and in accordance with the Arbitration Law. Where needed, the parties may turn to the competent court for help on certain matters, such as appointing an arbitrator if they cannot agree.
- Its advantages: greater flexibility, lower administrative cost, and a good fit for experienced parties who cooperate well on procedure.
- What to bear in mind: the absence of an administering body can cause delay if one party does not cooperate, and precise drafting of the arbitration agreement becomes all the more important.
Broadly, institutional arbitration suits large or international disputes, or those where the other party is expected not to cooperate, while ad hoc arbitration may suit simpler disputes between parties who trust one another.
A sole arbitrator or a three-member tribunal?
A sole arbitrator is faster and less costly, and suits medium-sized or straightforward disputes. A three-member tribunal, where each party appoints an arbitrator and the two arbitrators choose a chair, offers a range of expertise and greater reassurance to the parties in complex or high-value disputes, but it costs more and takes longer to coordinate.
Practical criteria for choosing an arbitrator
- Statutory eligibility: the Arbitration Law sets requirements for arbitrators, including full legal capacity and good conduct, in addition to the qualification the law specifies, so verify this first.
- Impartiality and independence: an arbitrator must disclose any circumstance that may raise doubts about their impartiality, such as a prior relationship with a party or its counsel. Ask about this expressly before the appointment.
- Expertise in the subject of the dispute: an arbitrator who understands the sector, such as construction, franchising or technology, saves a great deal of time in explaining technical issues.
- Procedural experience: managing arbitration hearings is a skill distinct from legal knowledge.
- Availability: a prominent arbitrator who is overloaded with cases may delay the award. Make sure they can commit to the timetable.
- Language: particularly where documents and witnesses are in a language other than Arabic.
The arbitrator you appoint is not your lawyer; their duty is impartiality. Appointing an arbitrator perceived as biased may weaken your position rather than strengthen it, and may expose the arbitration to a challenge.
Choosing the framework and the arbitrator is part of case strategy, not a mere formality. Our team helps clients assess the available options and choose what suits the nature and value of the dispute.