The Commercial Courts Law (“Law”), which consists of (96) articles, was promulgated for the purpose of organising the work of commercial courts in a manner that serves and balances efficiency and effectiveness in light of the qualitative and quantitative flow of commercial cases. It was published in Umm Al-Qura newspaper under No. (4827) on 27 Shaban 1441 A.H. [20/04/2020 A.D.], and it will go into effect sixty days after its publication date.
The law has been divided into (11) sections, containing a set of general provisions related to litigation before commercial courts specifically, such as subject matter jurisdiction and territorial jurisdiction, case filing procedures, the types of evidence and evidence presented in these cases, and the mechanisms for objecting to judgements.
However, in addition to these general provisions, the law sets out special provisions that can be classified into two phases: Pre- and post-arrival at the commercial court, in order to reduce the length of litigation and adapt to the fast-paced commercial reality. We present the most important of these provisions as follows:
How does this law affect the business sector?
The law will undoubtedly affect the mechanism and drafting of commercial contracts because the law set out a broad area for adding a number of clauses regarding various topics, including the aforementioned. It also designated some clauses and imbued them with legitimacy, such as transferring the burden of proof, etc.
The law may also affect the negotiation process when a dispute occurs, because the law specified mechanisms, set out avenues and imposed mandatory provisions when petitioning the commercial court. We believe they encourage alternative legal options to resolve the dispute before reaching the commercial court.
Finally, the law clearly aims to reduce the duration of a case before the commercial court, because business reality necessarily requires that, and the goal is consistent with the requirements of justice as these cases are related to money and what may happen to it.
*Note: The executive regulations for the law, which are expected to interpret, detail and explain many of its provisions and implementation mechanisms, have not been issued yet.