Commercial Litigation and Its Procedures in Courts

Commercial courts in Saudi Arabia handle all cases that fall under business activities according to the commercial laws in force in the Kingdom. These cases include disputes between traders, corporate issues, bankruptcy, and other matters related to commercial contracts and trademarks.

Main Laws Governing the Jurisdiction of Commercial Courts:

  • Commercial Transactions Law.
  • Companies Law.
  • Bankruptcy Law. These courts are equipped with the latest technical methods to expedite procedures and ensure transparency and justice in litigation.

Legal Representation in Commercial Litigation

Legal representation is vital in commercial litigation to ensure the protection of the legal rights and interests of the parties involved. In Saudi Arabia, lawyers representing parties in commercial litigation must be licensed and registered with the Saudi Bar Association.

Utmost Importance of Legal Representation:

  • Protection of Rights: Ensures that all rights and claims are recognized and protected during the judicial process.
  • Legal Expertise: Lawyers specializing in commercial cases possess the necessary expertise to handle the legal complexities associated with commerce.

Procedures That Commercial Parties May Undertake Before Filing Litigation

Before resorting to the judiciary in commercial disputes, there are several procedures parties can undertake to settle disputes amicably. These procedures include direct negotiation between the parties, using alternative dispute resolution methods such as mediation and arbitration, and sending legal notices through lawyers.

Basic Steps Before Filing Litigation:

  • Direct Negotiation: Exchange of views and proposals between the parties to reach a mutually agreed solution.
  • Mediation: Utilizing a neutral mediator to help the parties reach an agreement.
  • Arbitration: If there is an arbitration clause in the contracts, parties can choose to resolve the dispute through arbitration instead of court.

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Reconciliation and Mediation Procedures

Reconciliation and mediation are effective ways to resolve commercial disputes without the need for judicial intervention, saving time and resources for the parties. In Saudi Arabia, these methods are encouraged with support from legal institutions to enhance the business environment.

Advantages of Reconciliation and Mediation Procedures:

  • Time and Cost Savings: Faster and less costly compared to litigation.
  • Preservation of Business Relationships: Allows disputes to be resolved in a way that maintains good relations between the parties.
  • Confidentiality: Conducted in a confidential setting, protecting the parties’ reputations.

Schedule: Steps of Commercial Mediation

Step Description
Selection Appointment of a neutral mediator and agreement of all parties to participate
Mediation Sessions Holding sessions between the parties with the mediator present
Reaching an Agreement Drafting a legally binding agreement approved by all parties

These methods are an integral part of the commercial justice system in Saudi Arabia, contributing to fostering a culture of settlement and understanding among commercial parties.

Registration of Commercial Litigation

Registering commercial litigation is a fundamental step within the commercial judicial system in Saudi Arabia. This procedure requires submitting all necessary documents and evidence supporting the case, along with details of the parties involved.

Steps for Registering Commercial Litigation:

  • Application Submission: Prepare the commercial litigation document and submit it to the competent court.
  • Document Review: The court judge reviews the submitted documents to ensure they are complete.
  • Fee Payment: Pay the legal fees associated with registering the litigation.
  • Scheduling the Hearing: Set a date for the first hearing session.

Acceptance or Rejection of Registering Commercial Litigation

The acceptance or rejection of registering commercial litigation depends on several legal criteria that must be met in the application. These criteria include documentary completeness, legal validity of the request, and compliance with Saudi commercial laws.

Criteria for Acceptance:

  • Documents: All documents must be complete and authenticated as required.
  • Validity: The request must comply with the laws and procedures stipulated.
  • Jurisdiction: The dispute must fall within the jurisdiction of the commercial courts.

Reasons for Rejection of Litigation Registration:

  • Lack of Documents: Failure to submit all necessary papers or evidence.
  • Lack of Jurisdiction: If the dispute does not fall under commercial jurisdiction.
  • Statute of Limitations: If the litigation is filed after the legally allowed period.

These procedures are vital steps that ensure the effective and organized application of justice within the commercial system in Saudi Arabia.

Preparation of Commercial Litigation

Preparing commercial litigation involves several preparatory steps preceding the official court sessions. These steps aim to organize the litigation and ensure the judicial process proceeds efficiently and effectively.

Steps in Preparing Commercial Litigation:

  • Evidence Gathering: Collect all documents and evidence necessary to support the case.
  • Witness Preparation: Identify and prepare witnesses for the case to give their testimonies.
  • Drafting Legal Arguments: Develop a defense or prosecution strategy based on the appropriate legal frameworks.
  • Coordination with Lawyer: Organize meetings with the lawyer to review case details and determine the next steps.
  • Conducting Commercial Litigation Conducting commercial litigation means starting the actual judicial proceedings in court. This phase includes several sessions where each party presents their arguments and evidence to the judge.

Phases of Commercial Litigation:

  • Opening Session: Parties submit their legal papers and open the judicial debate.
  • Evidence Presentation: Each party presents evidence related to the case.
  • Witness Hearing: Interrogation of witnesses and listening to their testimonies.
  • Closing Arguments: Presentation of summaries and final arguments from the parties.

Details of Attendance Controls:

  • Mandatory Attendance: Parties are required to attend all sessions unless exempted by a judicial decision.
  • Legal Representation: If a party is unable to attend, they must be represented by a licensed lawyer.
  • Consequences of Absence: Absence without an acceptable excuse may lead to decisions being made in absentia against the absent party.

Consequences of Unexcused Absence:

  • Default Judgment: The judge may issue a default judgment against the absent party if absences are repeated.
  • Session Postponement: Sessions may be postponed in some cases if the absence is for an acceptable and justified reason.

These controls ensure compliance with the judicial process and maintain the efficiency and effectiveness of justice within the commercial courts of Saudi Arabia.

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Urgent Requests in Commercial Litigation

Urgent requests are those filed within commercial litigation to obtain a quick judicial decision in matters requiring immediate intervention to prevent significant harm or to protect a right at risk.

Types of Urgent Requests:

  • Prohibitory Order: To prevent the other party from taking a certain action that could harm the requesting party.
  • Urgent Order to Secure Evidence: To ensure the preservation of evidence that might be lost.
  • Order for Temporary Measures: To manage a specific aspect of the business or to freeze assets.

Steps to File an Urgent Request:

  • Identifying the Need: Clarify the reasons that make the request urgent.
  • Filing the Request: Prepare the request documents and submit them to the court.
  • Hearing Session: Conduct a quick hearing session to hear the parties involved.

Issuing Decisions in Commercial Litigation

Issuing decisions in commercial litigation is the final stage in the judicial process, where the judge assesses the evidence and arguments presented and issues a ruling that resolves the dispute between the parties.

Process of Issuing a Decision:

  • Evidence Evaluation: The judge analyzes all presented evidence and testimonies.
  • Deliberation: The judge discusses the case with advisors if necessary.
  • Drafting the Judgment: The final judgment is written, explaining the reasons for the decision.
  • Announcement of the Judgment: The judgment is presented to the parties in a scheduled session.

Importance of Judicial Judgment:

  • Resolving Disputes: The judicial judgment resolves disputes and provides legal certainty for the parties.
  • Enforcement of Law: It ensures the law is applied fairly and consistently.
  • Legal Precedent: The judgment can serve as a reference for similar future cases.

The judicial process in commercial courts in Saudi Arabia is designed to ensure justice and efficiency, providing quick mechanisms for urgent cases and achieving comprehensive justice through the issuance of final judgments.

Challenging Commercial Judgments

Challenging commercial judgments provides parties with an opportunity to review judicial decisions in case of potential errors or dissatisfaction with the verdict. Objections can be raised for various reasons, including jurisdiction, procedural flaws, and the statute of limitations.

First: Specific and Local Jurisdiction Specific and local jurisdiction refers to the legal ability of a court to handle a particular type of case or in a specific geographical area.

Reasons for Jurisdictional Objections:

  • Specific Jurisdiction: If the court that issued the judgment is not authorized to handle the type of case presented.
  • Local Jurisdiction: If the court is not in the geographical area that should deal with the case.

Second: Procedural Flaws Procedural flaws refer to errors in legal procedures that may affect the validity of the judgment.

Types of Procedural Flaws:

  • Procedural Error: Errors occurring during the judicial process such as incorrect notification of parties.
  • Documentation Deficiency: Shortcomings in official documents or incomplete judicial records.

Third: Statute of Limitations in Commercial Cases The statute of limitations in commercial cases means the expiration of the legally allowed period for filing the case, making the right to claim unacceptable.

Reasons for Statute-Based Objections:

  • Expiration of Period: If the lawsuit is filed after the legal time limit for the statute of limitations has passed.
  • Interpretation of Statute Rules: Dispute over the application or interpretation of statute rules.

The process of challenging commercial judgments involves submitting an appeal with a detailed justification, which is then reviewed by the competent appellate court to ensure justice and the legality of the proceedings in Saudi Arabia.

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What is the difference between a commercial lawsuit and a civil lawsuit?

Commercial and civil lawsuits differ in several key aspects related to the nature of the dispute, the laws applied, and the competent courts. Each of these lawsuits plays a pivotal role in the judicial system, but they serve different purposes and follow specific procedures.

Commercial Lawsuit: Commercial lawsuits deal with disputes between traders or companies or disputes arising from commercial activities. Cases that fall under this category include commercial sales contracts, commercial loans, bankruptcy, and commercial intellectual property rights.


  • Parties: The parties in commercial lawsuits are usually companies or traders.
  • Applicable Laws: Governed by commercial laws such as the Commercial Law and the Companies Law.
  • Competent Courts: Commercial courts consider this type of lawsuit.

Civil Lawsuit: Civil lawsuits cover a wide range of issues related to rights and obligations among individuals within a society. These include disputes over real estate, personal debts, personal injury, and public service contracts.


  • Parties: The parties can be individuals or companies, but the cases usually relate to personal rights or property.
  • Applicable Laws: Governed by civil laws such as the Civil Law.
  • Competent Courts: Civil courts consider these disputes.

Main Differences:

  • Nature of Cases: Commercial lawsuits focus on business matters and companies, while civil lawsuits cover a wider range of issues.
  • Involved Parties: Commercial lawsuits are often between traders or companies, whereas civil lawsuits involve individuals or companies in personal or property disputes.
  • Laws and Courts: Commercial lawsuits are handled according to commercial laws in commercial courts, while civil lawsuits are considered according to civil law in civil courts.

With this understanding, parties can determine the appropriate type of lawsuit to handle their disputes according to the specific nature of each case.

How can you distinguish between commercial contracts and civil contracts?

Distinguishing between commercial and civil contracts is important to determine the appropriate legal frameworks and competent courts to consider any disputes that may arise. This difference is based on the nature of the contract, the parties involved, and the purpose of the contract.

Commercial Contracts: Commercial contracts are those agreements made between parties in the context of commercial activities. These contracts are typically used in commercial buying and selling operations, commercial services, business partnerships, and corporate activities.

Characteristics of Commercial Contracts:
  • Commercial Purpose: Primarily aimed at generating profit and conducting commercial activities.
  • Parties: The parties are usually traders or companies.
  • Applicable Laws: Subject to commercial laws such as the Commercial Law and the Companies Law.

Civil Contracts: Civil contracts primarily deal with rights and obligations between individuals or between individuals and companies in non-commercial matters. These contracts include lease agreements, personal sales contracts, employment contracts, and other agreements related to daily life and personal relationships.

Characteristics of Civil Contracts:

  • Civil Purpose: Focuses on regulating personal or property relationships among individuals.
  • Parties: Can be between individuals or between an individual and a company in a non-commercial context.
  • Applicable Laws: Governed by civil law.

Main Differences:

  • Nature: Commercial contracts are within the context of commercial activities, while civil contracts cover a wider range of agreements between individuals.
  • Purpose: Commercial contracts aim to generate profit and facilitate commercial activities, while civil contracts address personal rights and obligations.
  • Governing Laws: Commercial contracts are subject to commercial laws, while civil contracts are governed by civil law.

By understanding these differences, parties can choose the appropriate type of contract to meet their legal needs and ensure the correct legal frameworks are applied in case of any disputes.

What are the procedures followed to challenge a judgment issued by a commercial court?

Challenging a judgment issued by a commercial court requires a precise understanding of the legal steps and time frames specified in the commercial judiciary system of Saudi Arabia. These procedures ensure the right to appeal and provide an opportunity to review cases objectively and justly.

Steps to Challenge a Judgment:

  • Review the Judgment: Upon receiving the judgment, the party wishing to challenge it should review the reasons and outcomes stated in the judgment text to determine the basis for the challenge.
  • Determine the Type of Challenge: Challenges can be made through an appeal or cassation, depending on the importance and monetary value of the lawsuit. Major cases may require cassation to the Supreme Court.
  • Prepare Challenge Documents: Prepare the necessary documents, including the challenge memorandum, which should contain the legal reasons and facts supporting the challenge.
  • Submit the Challenge: The challenge must be submitted within the specified period from the date of receipt of the judgment, typically 30 days for an appeal.
  • Legal Fees: Pay the legal fees required to challenge the judgment.
  • Appeal Session: Attend appeal sessions where the reasons for the challenge and evidence presented by the parties are discussed.
  • Judgment in the Appeal: Wait for the judgment from the appeal court, which may uphold the initial judgment, amend it, or annul it.

Important Points to Consider:

  • Timing: Ensure the challenge is submitted within the allowed time period to avoid administrative rejection.
  • Legal Consultation: It is advisable to consult a lawyer specialized in commercial cases to ensure a strong and well-considered challenge is presented.

A precise understanding of these procedures helps parties to make effective challenges and increases their chances of success in obtaining amended or annulled decisions if there is a valid legal basis for the challenge.

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