AGBI quotes Paula Boast on Saudi Arabia’s new civil code

Saudi Arabia hopes a new civil commercial code, expected to be introduced by the end of the year, will provide foreign investors with clarity on doing business in the country.

The code’s 721 articles, first published in June, could be a game-changer. It lays down statutory requirements for judges to follow, rather than the traditional Islamic principles that give them free rein in interpreting the law and no cause to follow recent precedent. 

The new civil code covers everything from real estate to contracts to tort, debt and inheritance, making it one of the biggest regulatory documents Saudi Arabia has ever seen. 

Paula Boast MBE, Partner, comments:

Following practice in other Gulf countries, some cases will go through an arbitration court operating in English, while others will still be heard by the Saudi grievances court.

This means that companies will need to make sure that contracts specify which body will handle different forms of litigation. 

If you’re negotiating contracts, your lawyer needs to pay attention to make sure that your dispute resolution provisions account for usage of arbitration. Most international businesses expect to go to arbitration and don’t want to end up in local courts.

Read the full piece in AGBI here.