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SETTLEMENT OF COMMERCIAL DISPUTES
- Establishment
and conduct of commercial courts is regulated by Royal Decree No. 32
issued on 15 Muharram 1350 H. (1930). Under this law, all commercial
disputes, except for those related to insurance business, are settled by a
"Committee for Commercial Disputes" comprising two "Shari’ah" Judges and
one Legal Adviser. The disputes related to insurance business are referred
to the Ministry of Commerce for decision.
- Arbitration Law, promulgated by Royal Decree No. M/46 dated 12/7/1403
H. (April 25, 1983) canceled and superseded the previous arbitration
provisions contained in the above-mentioned Royal Decree No. 32.
- Since December 31, 1987, Commercial Disputes have been within the
competence of the Grievances Court (Diwan Al-Mazalem), Commercial Circuit,
instead of the Committee for Commercial Disputes.
- The disputes pertaining to negotiable instruments are governed by
Negotiable Instruments Regulations approved by the Council of Ministers
Resolutions No. 692 dated 26 Ramadan 1383 H. (1963) and issued under Royal
Decree No. 37 dated 11 Shawwal 1383 H. (1963). These regulations supersede
Chapters VI, VII, VIII and IX of Commercial Court Regulations issued under
Royal Decree No. 32 of 1350 H. (1930).
- To settle commercial disputes related to negotiable instruments,
committees in Riyadh, Jeddah, and Dammam have been constituted. The
decisions of these committees are not binding. Any of the two parties can
appeal against the decisions of these Committees to the Ministry of
Commerce within 15 days of their issuance.
- Any of the two parties to the dispute can refer their dispute,
pertaining to the negotiable instruments, directly to the Chairman of any
of these Committees.
- Cases involving commercial fraud are governed by Regulations for the
Control of Commercial Fraud issued under Royal Decree No. 45 dated 14
Sha'ban 1381 H. (1961). Under these regulations, the Ministry of Commerce
shall issue special decisions for setting up a Central Tripartite
Committee in Dammam, Jeddah, and Riyadh. Each committee shall be headed by
a representative from the Ministry of Commerce. These committees shall
carry out the necessary investigations and issue punishments provided for
in these regulations. The decisions of these Committees are not binding
except after being confirmed by the Ministry of Commerce. There is,
however, permission to appeal to the Ministry of Commerce against these
decisions within 15 days from the date of their issuance.
- The Commercial Office of the Royal Embassy of Saudi Arabia in
Washington, D.C. (see here for
address) mediates commercial
disputes between Saudi and American companies only when both parties are
willing to reach an amicable out-of-court compromise. Since Arabic is the
official language of the Kingdom of Saudi Arabia, translation of documents
and related material into Arabic is recommended.
For further details, contact Legal Department, Ministry of Commerce
(see here for
address) and/or Grievances Court (see here for
address).
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