Saudi Arabia’s business landscape has transformed dramatically since 2016, with over 300,000 new commercial registrations in 2023 alone. This unprecedented growth has created complex legal challenges, making Saudi Arabia lawyers essential partners for businesses navigating the kingdom’s unique legal system.
The Saudi legal framework combines traditional Sharia principles with modern commercial laws, specifically designed to handle sophisticated business disputes. Understanding how legal professionals manage these cases is crucial for companies operating in or expanding to the Saudi market.
This comprehensive guide examines how lawyers in Saudi Arabia handle business cases, from initial assessment to final resolution. We explore the qualification requirements, litigation procedures, and alternative dispute resolution methods while highlighting recent legal reforms that shape commercial dispute resolution in the kingdom.
Saudi Arabia’s Legal Framework for Business Cases
The Kingdom of Saudi Arabia operates under a distinctive legal framework that merges Islamic principles with modern commercial regulations. The judicial system fundamentally rests on Islamic law (Shari’ah), which serves as the cornerstone for both civil and criminal cases [1].
Sharia Law Foundations in Commercial Disputes
The Saudi legal system derives its authority from two primary sources: the Holy Qur’an and the Sunnah (practices and sayings of Prophet Muhammad). Additionally, legal principles emerge from Ijma’ (consensus of Muslim scholars) and Qias (analogy) [1]. In commercial disputes, judges apply these foundational elements alongside contemporary business regulations.
The Basic Law of Governance, established in 1992, formally codified this structure, declaring Saudi Arabia as a sovereign Arab Islamic State where governance stems from Islamic principles [1]. Furthermore, the law mandates that courts apply Sharia provisions to cases, supplemented by regulations that align with Qur’anic teachings [1].
The Saudi Law of Commercial Courts (2020)
The Law of Commercial Courts, enacted through Royal Decree No. M/93 in April 2020, marked a significant advancement in business dispute resolution [2]. This comprehensive legislation introduced several key innovations:
Mandatory pre-claim conciliation for disputes valued between SAR 100,000 and SAR 1 million [3]
Electronic filing procedures and streamlined case management
A five-year limitation period for bringing commercial claims
Expedited debt recovery mechanisms allowing claimants to obtain Performance Orders within 10 days [3]
The commercial courts now hold jurisdiction over various business-related matters, including disputes between merchants, cases involving commercial contracts exceeding SAR 100,000, and violations of intellectual property laws [2].
Recent Reforms Under Vision 2030
Vision 2030 has catalyzed substantial reforms in Saudi Arabia’s legal framework. The government allocated approximately SAR 7.49 billion to modernize the judicial system [4]. These reforms aim to create a more transparent and efficient legal environment without compromising Sharia principles.
Notable developments include:
Implementation of the Law of Evidence (2022), which requires written contracts for monetary disputes over SAR 99,641.48 [4]
Introduction of the Civil Transaction Law (announced June 2023), containing over 700 articles addressing contracts and financial transactions [4]
Establishment of specialized commercial courts across various provinces, each comprising appellate circuits and circuits of first instance [2]
The commercial court system now permits private sector involvement in various procedural aspects, including mediation, document management, and expert-related procedures [2]. Moreover, the courts have embraced technological advancements, enabling electronic procedures for filing claims, conducting hearings, and delivering judgments [2].
At present, judges presiding over Islamic Law courts must be Saudi nationals with specialized training in Islamic Law. These judicial officers maintain independence, subject only to Sharia provisions, and possess the authority to issue binding judgments [1]. The Kingdom’s highest religious authority, the Grand Mufti, additionally influences judicial decisions through authoritative legal opinions (fatāwā) [1].
Qualifications and Expertise of Saudi Business Lawyers
Legal practitioners in Saudi Arabia must meet rigorous educational and professional standards to handle business cases effectively. The Ministry of Justice and Saudi Bar Association maintain strict oversight of these qualifications to ensure high-quality legal services across the kingdom.
Educational Requirements for Legal Practice
The foundational requirement for practicing law in Saudi Arabia begins with obtaining a bachelor’s degree in Islamic law or legal systems from a recognized Saudi university [5]. Alternatively, professionals can qualify with a diploma in law from the Institute of Public Administration, provided they complete two years of study after their university degree [6].
Post-graduation experience requirements vary based on additional qualifications:
Standard requirement: Three years of work experience after obtaining a Bachelor’s degree
Master’s degree holders: One year of experience
PhD holders: Exempt from experience requirements [6]
Specialized Business Law Certifications
The Saudi Bar Association has established comprehensive accreditation standards for legal practitioners. Key certification areas include:
Commercial judiciary principles
Companies law
Labor law regulations
Arbitration procedures
Professional conduct guidelines
Anti-money laundering controls [7]
Legal professionals must also demonstrate proficiency in:
Contract drafting and negotiation
Understanding commercial terms
Corporate restructuring
Employment law implementation [8]
Foreign vs. Local Legal Representation
The Saudi legal system permits both local and foreign lawyers to practice, albeit with distinct requirements. For foreign lawyers, essential conditions include:
Holding a valid lawyer’s license from their home country
Possessing minimum five years of legal practice experience
Registration with the Saudi Bar Association [9]
Foreign law firms operating in Saudi Arabia must meet specific criteria:
Maintain a partnership with local lawyers (Saudi partners must own at least 25% of the partnership)
Two partners must reside in Saudi Arabia for minimum 180 days annually
Employ 70% Saudi national lawyers under Saudization requirements [10]
The market for legal talent remains competitive, with associate salaries matching those in New York, complemented by tax-free income benefits [10]. Many firms maintain multilingual teams, combining Saudi, Middle Eastern, and Western lawyers to serve diverse client needs [11].
Local representation requirements dictate that foreign businesses must engage licensed Saudi lawyers for court proceedings [12]. This requirement ensures proper adherence to local procedures and strengthens case management through deep understanding of Saudi legal frameworks.
The legal profession prohibits practitioners from holding concurrent employment while practicing law. Both male and female lawyers face equal procedural requirements for obtaining practice licenses [6]. This equality in professional requirements reflects Saudi Arabia’s commitment to modernizing its legal sector under Vision 2030 initiatives.
Initial Case Assessment and Strategy Development
Successful business case management in Saudi Arabia begins with meticulous preparation and strategic planning. Saudi lawyers employ structured approaches to evaluate cases and develop effective litigation strategies.
Document Review and Evidence Gathering
Saudi business lawyers conduct thorough document reviews, examining contracts, communications, and business records. The Law of Evidence (2022) recognizes various forms of documentation as admissible proof, particularly:
Electronic evidence, including digital documents, e-mails, and electronic records [13]
Official documents prepared by authorized entities
Written contracts for monetary disputes exceeding SAR 99,641.48 [14]
Before proceeding with legal work, attorneys must verify client identities and ensure no conflicts of interest exist with current or former clients [15]. Subsequently, they draft comprehensive written contracts outlining the scope of work, expected timeframes, and fee structures.
Risk Analysis Methodology
Risk assessment follows a systematic approach where lawyers evaluate:
Financial implications and potential liabilities
Procedural requirements and timeframes
Evidence strength and admissibility
Alternative dispute resolution possibilities
The analysis process requires lawyers to identify internal and external threats that could affect case outcomes [16]. They assess risks based on:
Operational impact evaluation
Probability of occurrence
Control measures identification
Treatment plan development
Client Consultation Process
The initial consultation phase establishes the foundation for case management. During this stage, lawyers must:
Evaluate their capacity to handle the case effectively
Assess the time and resources required
Determine fee structures based on complexity and market standards [15]
Attorneys maintain ongoing communication with clients throughout the case progression. They must inform clients of all developments affecting their legal work [15]. The consultation process typically involves:
Comprehensive case analysis
Strategic planning sessions
Documentation requirements review
Timeline establishment
Fee structure discussion
Saudi lawyers consider several factors when determining fees, such as required time and effort, market rates, professional experience, and the nature of professional relationships [15]. They must exercise due diligence and reasonable effort while maintaining accuracy and expediency in performing their work [15].
Confidentiality remains paramount throughout the process. Lawyers must protect client information and documents, even after contract termination. Disclosure is permitted only in specific circumstances, such as preventing crimes, suspecting money laundering, or responding to judicial orders [15].
Litigation Procedures in Saudi Commercial Courts
Commercial litigation in Saudi Arabia follows structured procedures governed by the Law of Commercial Courts and its implementing regulations. These procedures ensure fair and efficient resolution of business disputes while maintaining transparency throughout the process.
Filing Requirements and Timeframes
The commercial courts mandate specific prerequisites for filing business cases. Prior to initiating legal proceedings, plaintiffs must notify defendants in writing at least 15 days before filing claims [2]. For monetary disputes exceeding SAR 100,000, written documentation becomes mandatory [3].
The filing process involves:
Submission of a detailed statement outlining claims and legal grounds
Payment of prescribed court fees
Provision of supporting documentation and evidence
Registration with the relevant commercial court department [13]
Upon registration, courts must review and decide on case acceptance within three business days [2]. If documentation is incomplete, applicants receive 15 days to fulfill requirements, with the original submission date preserved upon completion [13].
Court Appearances and Representation
The Saudi commercial courts enforce strict attendance rules. Once properly notified, defendants must appear in person or through authorized representatives. Failure to appear after two notifications results in the court proceeding with judgment in absentia [13].
For cases involving claims exceeding SAR 10 million, representation by licensed lawyers becomes mandatory [17]. The courts now permit remote hearings through approved electronic communication platforms, though this must not compromise the public nature of proceedings [17].
Witness Testimony and Expert Opinions
Witness testimony follows specific protocols under Saudi law:
Witnesses must be at least 15 years old and of sound mind [18]
Direct questioning of witnesses is permitted without prior court permission [3]
Courts may require witnesses to take oaths, with refusal impacting testimony credibility [3]
Expert opinions play a crucial role in commercial disputes. The Ministry of Justice, in coordination with the Council, establishes rules for expert testimony covering:
Selection and engagement procedures
Fee assessment guidelines
Scope of work parameters
Performance monitoring mechanisms [13]
Appeals Process and Enforcement
The appeals system provides multiple layers of review:
First-instance judgments can be appealed within 30 days [2]
Jurisdictional challenges must be appealed within 10 days [2]
Small claims under SAR 50,000 cannot be appealed unless parties agree otherwise [2]
Appellate proceedings now include oral hearings for:
Commercial disputes exceeding SAR 1 million
Cases involving merchant-to-merchant conflicts
Enforcement disputes challenging writs over SAR 100 million [4]
If appellants fail to attend hearings after filing appeals, courts may postpone proceedings for up to 30 days. Subsequent absence results in the appeal being considered void [2]. The enforcement process begins immediately after judgments become final, with execution judges overseeing implementation through various measures, accordingly ensuring compliance with court decisions [19].
Alternative Dispute Resolution Methods
Alternative dispute resolution has gained significant momentum in Saudi Arabia’s legal landscape, offering businesses efficient pathways for resolving commercial conflicts outside traditional courts. The Saudi Center for Commercial Arbitration (SCCA), established in 2014, serves as the cornerstone for administering these procedures [20].
Commercial Arbitration in Saudi Arabia
The SCCA operates as an independent, non-governmental organization providing arbitration services in both Arabic and English [21]. Following extensive consultation with stakeholders, the SCCA introduced revised arbitration rules in May 2023, marking a significant advancement in dispute resolution practices [22].
Key features of the current arbitration framework include:
The establishment of a 15-member SCCA Court comprising international experts from 12 countries [23]
Implementation of online dispute resolution procedures for claims under SAR 200,000 [22]
Introduction of expedited procedures mirroring provisions of other global arbitral institutions [24]
Enhanced provisions for emergency relief in urgent cases [24]
Mediation Practices and Cultural Considerations
Mediation in Saudi Arabia reflects deep-rooted cultural values emphasizing reconciliation and mutual respect [25]. The process aligns closely with Islamic principles, offering several advantages:
Cost-effective resolution compared to traditional litigation [26]
Confidentiality protection for sensitive business information [25]
Preservation of long-term business relationships [26]
Flexible procedures adaptable to specific dispute requirements [25]
In 2023, Saudi Arabia published its first mediation law, designed to promote alternative dispute resolution methods alongside its commitments under the Singapore Convention [24]. The law establishes a framework requiring confidential proceedings, fostering candid communication between parties [24].
Enforcement of Foreign Arbitral Awards
The enforcement landscape for arbitral awards demonstrates remarkable progress. In 2021, Saudi courts enforced 204 domestic and foreign awards valued at USD 2.1 billion, with enforcement proceedings typically concluding within two weeks [1].
Recent statistics highlight the growing reliability of arbitration:
90% of arbitral awards have been honored among over 4,000 annulment applications [21]
Only 6% of applications to nullify awards were granted between 2017 and 2021 [1]
Of successful nullification attempts, merely 3% involved Sharia and public policy violations [1]
The enforcement process follows clear guidelines under Saudi law. Nevertheless, courts maintain oversight to ensure awards comply with fundamental Sharia principles [27]. Notably, interest-based components of awards, although unenforceable under Sharia law, remain severable, allowing enforcement of other portions [27].
The SCCA has intensified its commitment to professional development through partnerships with international organizations. In collaboration with the Chartered Institute of Arbitrators (CIArb), the center now offers Arabic-language certification programs for arbitrators and mediators [21]. These initiatives, coupled with the SCCA Arabic Moot competition, foster expertise in international commercial arbitration among emerging legal professionals [21].
Conclusion
Saudi Arabia stands at the forefront of legal modernization while maintaining its Islamic principles. Recent reforms have transformed business dispute resolution through specialized commercial courts, mandatory pre-claim conciliation, and streamlined electronic procedures.
Legal professionals handling business cases must meet strict educational and professional standards, ensuring high-quality representation across the kingdom. These requirements, combined with the new Law of Commercial Courts and alternative dispute resolution mechanisms, create a robust framework for resolving commercial conflicts.
Saudi courts now demonstrate remarkable efficiency, particularly in arbitration enforcement, with 90% of arbitral awards honored and proceedings typically concluding within two weeks. This progress reflects the kingdom’s commitment to establishing a world-class legal system that serves both local and international business communities.
The Saudi legal landscape continues evolving through technological advancement, professional development programs, and strengthened alternative dispute resolution options. These developments position Saudi Arabia as a leading jurisdiction for commercial dispute resolution in the Middle East, balancing traditional values with modern business needs.
References
[1] – http://arbitrationblog.practicallaw.com/enforcement-of-local-and-foreign-arbitral-awards-in-saudi-arabia/
[2] – https://www.lexology.com/library/detail.aspx?g=a7173e3b-3b5b-4148-8ee1-814c99e5a1e4
[3] – https://alameenlawfirm.com.sa/en/2022/08/18/highlights-of-the-new-saudi-evidence-law-regarding-witnesses-and-documents/
[4] – https://www.tamimi.com/law-update-articles/ksa-courts-of-appeal-significant-development-in-process-for-appeals/
[5] – https://www.psu.edu.sa/CL/llb
[6] – https://law-md.com.sa/en/how-to-become-a-lawyer-in-saudi-arabia/
[7] – https://sasl.sba.gov.sa/en/t/saudi-accreditation-standards-for-legal-practitioners
[8] – https://www.meirc.com/training-courses/legal/certificate-business-commercial-law
[9] – https://erlf.com/publications/the-executive-regulations-for-licensing-foreign-law-firms/
[10] – https://www.law-middleeast.com/why-global-law-firms-are-heading-to-saudi-arabia/
[11] – https://www.tamimi.com/offices/saudi-arabia/
[12] – https://www.sbsaudilawyers.com/understanding-the-litigation-process-in-saudi-arabia-a-guide-for-businesses/
[13] – https://www.moj.gov.sa/Documents/Regulations/pdf/En/96.pdf
[14] – https://www.ghazzawilawfirm.com/insights/major-provisions-and-changes-in-saudi-arabias-law-of-evidence/
[15] – https://www.moj.gov.sa/Documents/Regulations/pdf/En/Rules of Professional Conduct for Lawyers.pdf
[16] – https://rulebook.sama.gov.sa/en/24-business-impact-analysis-bia-and-risk-assessment-ra
[17] – https://www.moj.gov.sa/Documents/Regulations/word/EN/The Implementing Regulations of the Commercial Courts Law.docx
[18] – https://www.tamimi.com/law-update-articles/the-saudi-new-law-of-evidence-new-page-in-the-saudi-judiciary-history/
[19] – https://www.tamimi.com/law-update-articles/overview-of-the-saudi-process-for-the-enforcement-of-judgments/
[20] – https://ridw.org/event-host/saudi-center-for-commercial-arbitration-scca
[21] – https://globalarbitrationreview.com/review/the-middle-eastern-and-african-arbitration-review/2024/article/saudi-arabia
[22] – https://www.orrick.com/en/Insights/2023/06/New-Saudi-Center-for-Commercial-Arbitration-Rules
[23] – https://www.tamimilawfirm.com/blog/arbitration-services-in-saudi-arabia/
[24] – https://www.nortonrosefulbright.com/en/knowledge/publications/fac4e289/leveling-the-playing-field
[25] – https://hmco.com.sa/mediation-in-commercial-disputes/
[26] – https://www.dentons.com/en/-/media/cfa5343546aa44c4b0b0c480fc17ef13.ashx
[27] – https://resourcehub.bakermckenzie.com/en/resources/cross-border-enforcement-center/emea/saudi-arabia/topics/arbitration-awards