Litigation in Saudi Arabia
Saudi Arabia has the largest economy in the Middle East and is a major power in foreign affairs. But its legal system differs substantially from the one in the United States, since it applies a unique mix of religious tradition and royal decrees. So I was excited to speak with Basem Al Maghthawi and Mohammed Maghrabi, attorneys at Al Maghthawi and Partners in Jeddah, to learn about what litigation is like in Saudi Arabia.
Why should you continue reading this post about litigation in Saudi Arabia?
You had considered litigating a case in Brazil, but you want to go somewhere even warmer.
You are interested in how courts apply Sharia law to commercial disputes and what books attorneys use to research it.
You are curious about the particular type of engineering contract whose disputes have the largest document productions in Saudi litigation and, if so, congratulations on finding the right blog post.
Basem Al Maghthawi is the founding partner of Al Maghthawi and Partners in Jeddah, Saudi Arabia. This interview has been lightly edited.
Can you tell me about the kinds of disputes you handle in your legal practice?
Mostly commercial ones. Construction and partnership cases are common in our firm. Furthermore, labour cases come hand in hand when the client is a company, and we are currently handling several labour cases. Moreover, we also take other civil cases, such as, real estate related cases.
Regarding personal status cases, we confine ourselves to disputes regarding inheritance.
What type of clients do you generally represent in disputes?
Most are businessmen and companies. But we do have some other clients who do not fall under these categories.
Besides Microsoft Office, what software do you use in your practice?
Almost all of our work is done using Microsoft Word and Microsoft OneDrive. However, we also use cloud-based software to manage the firm and organize the work.
What books and websites do you use for legal research?
When it comes to looking up a judicial precedent, the Ministry of Justice (MOJ) normally publishes the rulings in commercial cases. However, this initiative has been put on hold due to COVID-19.
Moreover, the MOJ has also launched a website to publish all judicial precedents, but it is still in the trial period.
Regarding the types of books we read, they are mostly Sharia based books, as you probably already know that Saudi Arabias' laws are driven by Sharia. Kashaf Alqina and Al-moghny are probably the two most famous Sharia books. They come in many parts because making just one book would be too great as they cover almost every aspect of Islam and Sharia.
Do you electronically file pleadings with the court? Or must you send paper copies of them to the courthouse?
Everything is done electronically through three different websites, one for commercial cases, one for administrative cases, and finally one for the general court cases. These websites allow lawyers to electronically submit documents, as well as other requests, such as for an appeal and a petition for reconsideration.
Moreover, there are some types of cases that do not fall under the courts' jurisdiction and are overseen by specialized committees, such as the Committee for Banking and Financial Disputes and Violations, and the Committee for Resolution of Securities Disputes.
Generally speaking, how many pages are the complaints or initial pleadings you see in your work?
There are not any websites that show initial pleadings or templates of them. However, it is common knowledge between lawyers in Saudi Arabia that complaints, initial pleadings, and memorandums should not exceed two pages unless it is a complicated case.
Generally speaking, how long does it take for a case to go from complaint to judgment?
Cases used to take ages in courts to end. Because court appearance dates were usually three months apart, a normal and easy case could still take up to a year to end.
However, one of the goals the MOJ is trying achieve is the shortening of time needed for cases to end. There have been a lot of changes recently, under the leadership of the current minister Dr. Waleed Alsama'ani. He introduced many new methods and services to improve the MOJ in many different ways, such as the introduction of online hearings to changing the courts’ buildings to fit a new system of litigation and hearings procedures. But the final results of these changes have not yet been seen since many have only been implemented during COVID-19 and have yet to be fully tested.
Mohammed Maghrabi is a litigator at
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Does Saudi Arabia have specialized courts that only hear commercial cases?
Commercial disputes are mostly solved in commercial courts. However, as mentioned before, there are specialized committees that oversee many commercial disputes, for instance IP and securities cases.
Who decides the facts in a commercial case? Is it a judge or a jury?
We do not have juries.
Do Saudi courts ever apply foreign law to transactions or contracts?
The court may apply foreign law as long as it does not contradict or conflicts with Saudi law or Sharia. This is because the first article of the Saudi Litigation Law says that "courts shall apply the provisions of Sharia to cases brought before them, as derived from the Quran and Sunnah, and State laws not conflicting therewith. Proceedings before such courts shall comply with the provisions of this law. Therefore, when applying a foreign law, the court will make sure it does not conflict with the laws of Saudi Arabia or Sharia.
Furthermore, if an article in a contract conflicts with Sharia, the article is considered void and null. If such article is a must and is essential, then parties should use an arbitration clause to enforce it.
Do Saudi courts require litigants to respond to document requests? If so, what is your experience about how large document productions are?
The size of document productions depends on the type of case; construction cases are not the same as manufacture and supply. Document production in ordinary cases should not exceed one thousand pages. And generally, cases in Saudi Arabia are not as complicated as the ones seen in the U.S. The amount of money and demands for similar cases in Saudi Arabia are much less than their American counterparts.
Nevertheless, substantial document productions occur where the subject of disputes are Fédération Internationale Des Ingénieurs-Conseils (FIDIC) contracts. Generally speaking, a FIDIC contract is used in huge projects, so the reason FIDIC cases have the largest document productions is not because of FIDIC, but because the projects are usually huge.
However even these documents production do not usually exceed a couple thousands of pages. This is because these documents are usually provided to the court where the judge will assign an external expert to study the documents and make a report, and because of that the parties tend to provide the essential documents only. They do that because these reports are usually a decisive factor for the judge's final decision, so it is not wise to drown the expert or the judge in documents. Otherwise, the party that does so might appear to be stalling or hiding something, which might make the judge or the expert biased against them.
Choosing a good expert and knowing which expert is honest and which one is not is key, and of course having some connections does not hurt.
Do you get to interview the opposing witnesses before the trial?
No. There is no law that says or even suggests that we have the right to do that.
If you win, does the other side reimburse your attorneys’ fees?
Yes, the other side does reimburse you, but it is not that simple.
The Commercial Courts Law, which was issued on April 8, 2020 and came into force on June 27, 2020, stated in its implementing regulations in Article (164) that “The court shall include in its ruling, its decision on the mental and material damages compensation including the litigation fees…"“. When the court decides to reimburse attorneys’ fees, there are few criteria regarding how much a just and fair fee should be. The total sum of the contract or the original demands that are the core of the case are the most important criteria.
Before this new law, lawyers had to file a new lawsuit after the original suit, demanding for attorneys' fees. This caused an overload in cases for judges and courts. Moreover, because a lot of attorney-client contracts were exaggerated or fictitious, the court used to refer the case to an expert to decide on what a just fee should be.
That being said, the usage of experts to decide on the attorneys’ fees will still continue even under the new laws, and their help will be requested by the court if a judge deemed the fees to be exaggerated, or any other reason the judge deem fit.
Do you believe that Saudi courts have a particular strength for resolving commercial disputes? How about a weakness?
The MOJ and the Bureau of Experts at The Council of Ministers (BOE) took their time drafting the commercial courts law, as this law was expected years before. However, the delay was justified as they had to research the laws in many advanced countries and take from each law the articles and ideas that would fit Saudi Arabia's system. Hence, the delay.
The commercial courts law is yet to be fully tested. However, there are a few Articles that are considered the highlights of this law, some would consider them strengths and others would consider them weaknesses, and they are as follows:
The law gives lawyers some power and advantages. For example, some cases can only be filed by lawyers, although after that the plaintiff can represent themselves.
Some cases must go through mediation before going to court. This particular rule is a nuisance to lawyers as it can be a waste of time.
The judge can decide whether witnesses are honest or not from the circumstances of each case. And if the witnesses’ testimonies contradict each other, the judge can choose the parts he deems useful. Also, the parties can now question the witnesses.
The introduction of “orders for payments.” An order for payment is a method used in commercial court to collect debt. There is no need for a hearing or court appearance for the judge to make an order of payment. Once the application is sent, the judge then in 10 business days will make a decision to either accept or refuse the application.
To file an order for payment application, there are four conditions:
The debt must be owed when the application is sent; the procedure is not available for debts that come due in the future.
There should not be any conditions that may make the debt yet to be deserved, like a contract that states the money shall be due only if the party fulfilled a certain obligation. In that case, proof that the obligation is fulfilled must be attached with the application.
The applicant must prove that the debt exists, and the proof provided with the application must be in writing only. For example, a recorded conversation on the telephone would not be accepted by the court.
The amount of the debt has to be specified and very clear. If the amount of debt is up for dispute or assessment, then it will not be accepted.
How often do you go to the courthouse?
A lot of cases are on hold due to COVID-19. Because of that, we go to the courthouse on average once or twice a week.
When you are there, do you need to wear a special robe or wig?
I have to wear the traditional Saudi clothes.