SAUDI ARABIA Law and Practice Contributed by: Zain Satardien, Chadi Hourani and Hayel Hourani, Hourani & Partners
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1. Legal System and Regulatory Framework 1.1 Legal System Sources of Saudi Arabian Law
Judicial Structure There are a number of courts and judicial commit - tees in Saudi Arabia that have jurisdiction over dif - ferent types of claims. Disputes are generally heard before the general Islamic law courts of Saudi Arabia (the “Islamic law courts” or “general courts”) unless jurisdiction for a particular type of dispute is awarded to another court or judicial committee. The Islamic law courts consider disputes in the light of Islamic law, and, within the different schools of Islamic juris - prudence, they generally follow the Hanbali school of jurisprudence. Disputes of a general commercial nature are heard before the commercial courts. The judicial framework is tiered as follows. • Sharia Courts: These courts handle most civil and criminal cases of the Saudi Arabian legal sys - tem and apply Islamic law. The Sharia courts are organised into several categories: courts of the first instance (summary and general courts), courts of cassation and the Supreme Judicial Council. • Administrative Courts (Board of Grievances): Supplementing the Sharia courts is the Board of Grievances, which hears cases that involve the government, and resolves disputes involving the government and public law. The Board of Griev - ances is an independent administrative judicial body reporting directly to the King, with its seat in the capital, Riyadh. • Commercial Courts: Established under the Com - mercial Courts Law to adjudicate disputes involv - ing business and commercial transactions, these
Saudi Arabia’s legal system is primarily based on Sha - ria principles as derived from the Holy Quran and Sun - nah. In Islamic law there are four main schools of juris - prudence, namely: Hanbali, Hanafi, Shafi, and Maliki. The Hanbali school of jurisprudence predominantly influences judicial decision-making in Saudi Arabia. Saudi Arabian judges have significant and broad dis - cretion due to varying interpretations of Sharia, which may lead to nuanced rulings on similar matters. While there is no doctrine of binding precedent, significant efforts are underway to codify elements of Sharia to standardise judgments, enhance outcome predictabil - ity and modernise the legal framework. Statutory law enacted through royal decrees, minis - terial decisions, ministerial resolutions, departmental circulars, and other pronouncements, supplements Sharia law in areas such as commercial law, invest - ment law, and labour law. Key legislative examples include the Companies Law, the Commercial Trans - actions Law, the Capital Market Law and the Labour Law. Regulatory agencies, such as the Ministry of Invest - ment (MISA) and the Capital Markets Authority (CMA), oversee specific legal and regulatory functions.
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