Articles

Saudi Cabinet approves a new Commercial Courts Law

April 22,2020

The new Commercial Court Law issued by Royal Decree No. (M / 93) dated 15/8/1414H (04/08/2020 AD) includes many new provisions and procedures for the Saudi Judiciary. It is a significant shift in commercial justice designed to promote trade and investment in the Kingdom. The new law mandates the establishment of publicly-viewable Commercial Courts throughout the regions and provinces of the Kingdom and limited the competency of Shari`ah Courts to hear/ consider commercial disputes. The new law shall apply to all new and pending cases and will become effective 60 days from the date of its publication.  Some salient features of the Commercial Courts Law are as below: 

• Statute of Limitations in Commercial Cases is a period of five (5) years.
• Setting schedules for proceedings - through its implementing regulations - deem it obligatory to specify the number of court sessions for a hearing, the times and deadlines of these sessions, and the instances in which cases can be adjourned. 

• The new Law obligates parties to the commercial dispute to attempt conciliation before filing the case, in a manner mandated by the implementing regulations of the Law.

• Faster debt collection. The law allows the creditor to file for a debt payment order under certain conditions, and the court will decide on the application within ten (10) days of receiving the request. The debtor has the right to file its objections if any. 

• The Law provides merchants with the freedom to determine the procedures to be followed in deciding disputes, expressly stating that such determinations have the power of law, and merchants are also free to agree upon the applicable rules of evidence, as long as such rules do not violate public policy and the needs of justice. 

• The Commercial Court may act in accordance with the procedural and evidentiary rules exercised in a foreign country, as agreed upon by the parties, as long as such rules do not violate public policy. The Law also provides that the parties may agree to shift the burden of proof between the parties instead of obligating only the claimant with such a burden.  

• Disclosure of documents / Discovery. The Law allows the parties to a dispute to request perusal of the documents in possession of the other(s) and, if a party receiving such a request fails to respond within 15 days, the applicant(s) may submit its discovery request to the Commercial Court, which may issue an enforceable order thereon. 

• Litigants have the right to cross-examine each other’s’ witnesses via deposition, and it is now possible to cross-examine witnesses directly under the court's supervision.

• The law provides admissibility of electronic documents and sound recordings and makes it possible for the court to seek the assistance of technical experts to scrutinize and verify/authenticate these audio recordings.

• The law permits electronic notification to any parties residing outside the Kingdom.

• The Law makes it possible for litigants to agree, even before the initiation of a case, on the finality of the judgment of the Court of First Instance. (Waiver of Appeal Rights)

• Any judgments by the preliminary courts amounting to under fifty thousand (50,000) Saudi Riyals are not subject to appeal. The time limit for the appeal of judgments rendered in the jurisdiction and urgent cases shall be (10 days).

• The law requires that Saudi Arabian licensed lawyers must make the pleadings.

• Commercial case data will be made accessible to the public and all final judgments rendered by the Commercial Courts will be published