Arbitrators’ Fees in Saudi Arabia

Introductory overview

Arbitrators’ fees are a central factor in any company’s decision to resort to arbitration instead of state courts. They are not just a side cost item, but a component that directly affects risk management, cash flow, and corporate governance. Before the executive management or the board agrees to activate an arbitration clause in an existing dispute, one practical question always appears: What will the arbitrator’s fees be? How are they calculated? And can they be kept within a reasonable, negotiable range?

This article presents a practical view, based on the accumulated experience of the Law Office of Mohammed Almuzayen in commercial, construction, and industrial disputes. It focuses on arbitrators’ fees in Saudi Arabia from a perspective that matters to legal and finance departments in all types of companies.

What you will find in this article

• A practical definition of arbitrators’ fees and how they relate to corporate risk management.
• A simplified table of fee brackets based on the value of the dispute, with indicative percentage ranges.
• An explanation of the commonly observed 5%–10% range, and how it varies between simple, medium-complexity, and large disputes.
• How arbitrators’ fees and arbitration costs are allocated between the parties.
• A comparison between institutional arbitration and ad hoc (free) arbitration from the angle of fees and flexibility.
• An overview of two services companies can benefit from: direct arbitration services, and advisory/mediation support in selecting a suitable arbitrator and negotiating fees.

About the author

Attorney and arbitrator Mohammed Almuzayen has over fifteen years of experience, specializing in construction disputes, infrastructure and engineering projects, government contracts, and franchise agreements. He holds an LL.B. from King Saud University (Riyadh, 2009) and has extensive practical experience through his work with several major national companies, including Almajdouie Group, Bin Zagr, United Mining Investments Company, Al-Mawarid Holding (listed), and Golden Oil Investment.

1. What do we mean by arbitrators’ fees?

Arbitrators’ fees are the financial consideration paid to the sole arbitrator or to the arbitral tribunal for managing the dispute from registration until issuance of the final award. They cover the review of documents, hearings, deliberations, and drafting of the award. These fees are distinct from other cost components of arbitration such as administrative fees, filing fees, experts’ fees, translation, and travel expenses.

Based on our work with industrial companies, construction firms, and listed entities, arbitrators’ fees are not treated as a minor procedural detail. They are a key input in assessing whether arbitration is preferable to litigation, in deciding when to accept a settlement, and in building a clear internal policy for dispute management.

2. Fee brackets for arbitrators in Saudi Arabia

Presenting arbitrators’ fees in brackets linked to the value of the dispute helps decision makers form a realistic picture of expected cost before initiating arbitration. Market practice generally follows a tiered structure. The following table summarizes the common indicative ranges, focusing on arbitrators’ fees only (excluding administrative charges and other expenses):

From these brackets, the picture for management can be simplified as follows:

• For simple and medium-complexity disputes, arbitrators’ fees typically fall within an indicative range of 5%–10% of the claim value, depending on expected effort, number of hearings, and nature of the claim.
• For large disputes, the effective percentage of fees compared to the claim value decreases, even though the absolute amount is high due to the size and complexity of the case.

This framework allows arbitration costs to be incorporated into financial models for disputes, instead of being treated as a surprise item that cannot be estimated in advance.

Legal consultation section

When assessing arbitration as an option in a commercial or construction dispute, companies need clear numbers and a fee structure that can be defended before audit committees and boards. The Law Office of Mohammed Almuzayen can provide an initial estimate based on the dispute’s value and complexity and propose suitable fee models—whether in institutional or ad hoc arbitration—in line with the company’s risk management and governance policies.

3. Simple disputes, medium-complexity disputes, and large disputes

The way arbitrators’ fees are viewed will differ depending on the nature of the dispute—not merely its monetary value. In practice, the picture can be divided into three levels:

1. Simple disputes

These are disputes with relatively limited documentation, clear contracts, and modest amounts—whether under commercial contracts, supply agreements, or smaller subcontracting arrangements. In this band, fees—before any negotiation—may lean towards the upper part of the range in the table. This can be managed by:

• Agreeing on a fixed, lump-sum fee that does not vary with the claim value.
• Narrowing the arbitrator’s mandate in terms of number of submissions and hearings.

2. Medium-complexity disputes

These are cases where multiple contracts or parties are involved, or where technical issues require expert reports, with higher values than simple cases but still below mega-project levels. Practical experience shows that in such dispute’s arbitrators’ fees tend to settle around 5%–8% of the claim value, with flexibility to allocate fees across different phases (for example, up to the expert stage and post-expert stage) as agreed between the parties.

3. Large disputes

These relate to major infrastructure projects, strategic industrial contracts, or sizeable joint ventures, often involving multi-million-riyal claims. For this category, it is rarely appropriate to speak of a single flat percentage. It is preferable to design a hybrid model consisting of:

• A fixed base fee covering the minimum expected effort.
• A percentage of the amount in dispute (or of the quantified claims after crystallization).

In several large cases we have handled, the effective fee percentage fell in the 2%–4% range of the claim value, while the absolute fee remained high given the project size and complexity of the contracts.

4. How are arbitrators’ fees managed financially between the parties?

Financial management of arbitrators’ fees is as important as the percentage itself, because it affects cash flow and risk allocation during the dispute. In practice, the process can be summarized as follows:

• At the outset of arbitration, a provisional deposit (advance on costs) is usually required to cover arbitrators’ fees and initial expenses. This may be paid by the claimant alone or by both parties, depending on the institution’s rules or the parties’ agreement.
• During the proceedings, the parties may be asked to replenish the advance if it becomes clear that the initial deposit is insufficient for the remaining stages.
• In the final award, the tribunal decides how arbitrators’ fees and arbitration costs are to be allocated between the parties. Typically, the losing party bears most of the costs, or they are apportioned according to the parties’ relative success or failure in their claims.

Embedding these issues within a clear internal dispute management policy helps legal and finance teams explain the impact of arbitration on the company’s financial statements and justify choosing arbitration over other paths.

5. Arbitrators’ fees in institutional vs ad hoc arbitration

Institutional arbitration

In institutional arbitration, the case is administered by an arbitration center that publishes clear schedules for filing fees, administrative fees, and arbitrators’ fees based on defined brackets. This framework provides companies with more predictability and procedural structure, and is generally more suitable for large, complex disputes. However, it can restrict room for negotiation on fees—especially in simple and medium-complexity cases where high administrative charges may be disproportionate to the amounts in dispute.

Ad hoc (free) arbitration

In ad hoc arbitration, the company is not automatically bound by a predefined fee schedule. The parties may agree directly with the arbitrator on a fee structure aligned with the nature and value of the dispute. This allows significantly more flexibility, such as:

• Using fixed lump-sum fees in simple disputes.
• Staging fees across time or phases (for example, pre- and post-expert stage) in medium-complexity cases.
• Adopting a hybrid model in large cases that reflects the number of arbitrators and the specialist expertise required.

Direct arbitration service

The Law Office of Mohammed Almuzayen can act as sole arbitrator, co-arbitrator, or presiding arbitrator in commercial, construction, and industrial disputes, applying fee models agreed in advance that reflect the value and complexity of the dispute and comply with corporate governance and internal audit requirements.

Arbitrator selection and fee negotiation service

In other situations, companies may prefer the firm to support them in selecting suitable arbitrators rather than serving as arbitrator itself. In such cases, the firm can:

• Analyze the dispute and relevant industry sector.
• Propose a shortlist of suitable arbitrators based on an up-to-date database and proven track record in similar cases.
• Assist the legal department in reviewing proposed fee structures and negotiating them to reach a balanced and defensible outcome.

This approach allows companies to handle arbitrators’ fees within a professional, structured framework instead of relying on random “arbitrator numbers” found without any reliable reference.

Frequently asked questions on arbitrators’ fees

What is the commonly observed range for arbitrators’ fees?

In many simple and medium-complexity cases, arbitrators’ fees tend to fall within an indicative range of 5%–10% of the claim value, with variation from case to case depending on expected effort, nature of the dispute, and the agreed fee model.

Can arbitrators’ fees be reduced below market ranges?

Yes. In ad hoc arbitration, or where a sole arbitrator is appointed directly, it is often possible to negotiate lower fees—provided the scope of work and number of hearings are clearly defined and the fee arrangement is recorded in writing before proceedings start.

Are arbitrators’ fee schedules mandatory in all arbitrations?

Fee schedules issued by arbitration institutions apply to cases administered by those institutions. In ad hoc arbitration, parties are generally free to agree different fee models as long as they comply with applicable law and their own agreements.

Who ultimately bears arbitrators’ fees?

Fees are normally advanced by one or both parties at the outset. The tribunal then decides in the final award how costs are to be allocated. In most cases, the losing party—or the party that loses the majority of its claims—bears the larger share of arbitrators’ fees and other costs.

How can companies safely choose a suitable arbitrator?

The safest route is to work through an experienced legal firm with a strong arbitration practice, equipped with a database of arbitrators and practical insight into their qualifications, track record, and typical fee levels. Such a firm can help shortlist candidates and negotiate fee terms in a way that protects the company’s interests and reduces risk.

Conclusion

Arbitrators’ fees are a core component of any decision by companies to resort to arbitration and cannot be treated as an afterthought. Understanding indicative fee brackets, the nature of simple, medium-complexity, and large disputes, and the differences between institutional and ad hoc arbitration from a cost perspective enables legal and finance teams to embed arbitration within a deliberate dispute management strategy. With specialized professional support, arbitrators’ fees can be transformed from a source of uncertainty and risk into a predictable, manageable, and negotiable item that optimizes cost efficiency while preserving the quality and credibility of the arbitral process.

Related articles

• Legal Consultations in Saudi Arabia for Companies – Practical Guide from Mohammed Almuzayen Law Firm. 

Short descriptive summary

This article offers a practical explanation of arbitrators’ fees in Saudi Arabia from a corporate perspective. It presents a simplified table of fee brackets linked to claim value, showing that in many simple and medium-complexity disputes fees typically fall within an indicative range of 5%–10% of the claim value, with lower effective percentages in large cases. It also explains how arbitrators’ fees are allocated between the parties, highlights key differences between institutional and ad hoc arbitration in terms of cost flexibility, and outlines how the Law Office of Mohammed Almuzayen can support companies through direct arbitration services or by assisting in arbitrator selection and fee negotiation in line with risk management and corporate governance policies.