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	Saudi Arabia		Info-Prod Country Guide
JUDICIARY   BUSINESS FORMS & STRUCTURES   CURRENCY & BANKING   INTELLECTUAL PROPERTY TAXATION   INVESTMENT & TRADE   LABOR LAW   ENVIRONMENTAL LAW

Legal Review The Saudi Arabian legal system is based on Islamic law, the Shari'a, with the Koran providing the most important source of law. Nonetheless, Royal and Ministerial Decrees are periodically issued to meet the complexities of modern life and commercialized business transactions. Such Decrees are only valid, however, if they do not conflict with Shari'a law. Also, the use of settlement or arbitration for deciding conflicts is becoming more common. Judiciary General The main court is the Shari'a Court, which operates within the Ministry of Justice and deals with family, real estate and criminal matters. Appeals are made to the Shari'a Court of Appeals, and subsequently to the Custodian of the Two Holy Mosques. Disputes regarding commercial and labor matters are addressed by the Ministry of Justice. All cases concerning commercial disputes are dealt with through the Ministry's Board of Grievances The Commission for the Settlement of Labor Disputes deals with labor disputes and criminal violations of the Labor Law. The Government Administrative Judicial Committees decide matters concerning insurance disputes, unlicensed foreign capital investment and violations of customs duties. The Board of Grievances administers disputes between Saudi Arabian government bodies and private parties as well as other matters provided for by special codes such as bribery, forgery and trademarks. Most cases are decided on their individual merits, and judges are therefore not bound by legal precedent. Commercial Dispute Settlement Historically, Saudis have not used commercial contracts which provide for arbitration or adjudication mechanisms outside of such mechanisms within the Saudi government. Saudi Arabia, however, has recently enacted an Arbitration Law and Regulations. As a result, the arbitration of disputes is no longer uncommon in the Kingdom. Prevailing procedures are more time consuming than those in Europe and United States and can cause personal inconvenience to foreigners. For example, a letter of no-objection is required from the Saudi sponsor of a foreign employee whose employment has terminated before an exit visa will be issued by the Government. Unfortunately, this requirement could be used to coerce or to intimidate people in certain business situations. Foreign business travelers traveling on a business visa do not require a letter of no-objection to leave the country. The Saudis maintain, however, that they have made tremendous progress in resolving the backlog of commercial disputes, almost to the point of complete elimination. Moreover, the government no longer requires exclusive applicability of Saudi law in the resolution of private commercial disputes. In practice, however, Saudi courts tend to apply Saudi law in commercial disputes litigated in the Kingdom, even when the relevant contract contains a foreign choice of law provision and provides for a foreign forum to have jurisdiction. Business-to-business arbitration assistance, although expensive, is available from local chambers of commerce for some types of disputes. Economic Analysis Contents Menu Next Chapter

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