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Settlement of Commercial Disputes
For further details, contact Legal Department, Ministry of
Commerce and/or Grievances Court .
- Establishment and conduct of commercial courts is regulated by Royal Decree No. 32
issued on 15 Moharram 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1983) canceled and superseded the previous arbitration provisions contained in the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
appendix II 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.
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