Questions on commercial courts: jurisdiction, filing & settlement

1. 01Do all disputes between companies go to the commercial court?

   Not necessarily. Being a company does not by itself decide which court hears the case. The commercial court hears the matters listed in Article 16 of the Commercial Courts Law, including disputes between merchants arising from their original or ancillary commercial activities, and claims arising under the Companies Law, the Bankruptcy Law or the intellectual property laws. Some disputes are assigned by special laws to other bodies.

   SourceCommercial Courts Law, Art. 16 (Ministry of Justice legal portal)

   Read moreA commercial claim: what to prepare before registration, and when it is too late to pleadBefore filing a claim in Saudi Arabia: five things worth checking

   Ask about your own case

2. 02Does the commercial court hear a claim between two merchants even if it is under SAR 500,000?

   Yes. If the dispute between the two merchants arises from their original or ancillary commercial activities, it falls under Article 16(1) of the Commercial Courts Law, which sets no minimum claim value. The SAR 500,000 threshold applies only to claims brought against a merchant in commercial-contract disputes, under Article 16(2) of the Law and Article 31 of its Implementing Regulation.

   SourceCommercial Courts Law, Art. 16 (Ministry of Justice legal portal)Implementing Regulation of the Commercial Courts Law, Art. 31 (Ministry of Justice legal portal)

   Read moreA commercial claim: what to prepare before registration, and when it is too late to plead

   Ask about your own case

3. 03When does the commercial court hear a non-merchant's claim against a merchant over a commercial contract?

   When the original claim exceeds SAR 500,000. Article 16(2) of the Commercial Courts Law gives the commercial court claims against a merchant in commercial-contract disputes where the original claim exceeds SAR 100,000, and allows the Supreme Judicial Council to raise that figure. Article 31 of the Implementing Regulation requires the claim to exceed SAR 500,000. The value is taken from the claims in the statement of claim, excluding litigation costs and legal fees.

   SourceCommercial Courts Law, Art. 16 (Ministry of Justice legal portal)Implementing Regulation of the Commercial Courts Law, Arts. 6 and 31 (Ministry of Justice legal portal)

   Read moreA commercial claim: what to prepare before registration, and when it is too late to pleadBefore filing a claim in Saudi Arabia: five things worth checking

   Ask about your own case

4. 04Does the commercial court hear a partner's claim to annul a resolution of the partner's company?

   Yes, where the claim rests on the Companies Law. Article 16(4) of the Commercial Courts Law gives the commercial court claims arising from the application of the Companies Law. The claim is filed with the court for the area of the company's head office. The conditions and time limits for an annulment claim under the Companies Law, which vary with the type of company, still apply.

   SourceCommercial Courts Law, Arts. 16 and 17 (Ministry of Justice legal portal)

   Read moreBefore signing a partnership agreement: management, profits, exit and disputesA commercial claim: what to prepare before registration, and when it is too late to plead

   Ask about your own case

5. 05Do the commercial courts hear bankruptcy matters?

   Yes. Under Article 16(5) of the Commercial Courts Law, the commercial court hears claims and violations arising from the application of the Bankruptcy Law. The bankruptcy procedures themselves follow the special rules in the Bankruptcy Law.

   SourceCommercial Courts Law, Art. 16 (Ministry of Justice legal portal)

6. 06Where is a liability claim against a company manager filed?

   With the court for the area of the company's head office. Article 17 of the Commercial Courts Law gives that court territorial jurisdiction over claims relating to companies, including claims against managers and board members. The commercial court has subject-matter jurisdiction where the claim arises from the application of the Companies Law.

   SourceCommercial Courts Law, Arts. 16 and 17 (Ministry of Justice legal portal)

   Read moreA commercial claim: what to prepare before registration, and when it is too late to plead

   Ask about your own case

7. 07Can a commercial claim be filed in the city where the contract was made instead of the defendant's city?

   Yes. The default is the court for the defendant's place of residence, but Article 17 of the Commercial Courts Law also allows the claim to be filed with the court for the place where the contract was concluded, performed or due to be performed. A written agreement between the parties providing otherwise takes precedence. A defendant who wants to object to territorial jurisdiction must do so before making any request, defence or plea of inadmissibility, including at the case-preparation stage, or the right is lost.

   SourceCommercial Courts Law, Art. 17 (Ministry of Justice legal portal)Implementing Regulation of the Commercial Courts Law, Art. 33 (Ministry of Justice legal portal)

   Read moreA commercial claim: what to prepare before registration, and when it is too late to pleadBefore filing a claim in Saudi Arabia: five things worth checking

   Ask about your own case

8. 08Can a company be sued in the city of one of its branches?

   Yes, if the dispute arises from a contract made with that branch. Claims relating to companies normally go to the court for the head office, but Article 17 of the Commercial Courts Law allows the claim to be filed with the court for the branch's area in disputes arising from contracts with that branch. Service may then be made on the branch manager or the manager's deputy.

   SourceCommercial Courts Law, Arts. 11 and 17 (Ministry of Justice legal portal)

   Read moreA commercial claim: what to prepare before registration, and when it is too late to plead

   Ask about your own case

9. 09How is the claim value worked out for commercial-court jurisdiction?

   By the value of the claims in the statement of claim. Claims for litigation costs or legal fees are left out. Where the claim is not for a sum of money, such as termination of a contract or the return of goods sold, the value of the obligation the claim arises from is used.

   SourceImplementing Regulation of the Commercial Courts Law, Art. 6 (Ministry of Justice legal portal)

   Read moreA commercial claim: what to prepare before registration, and when it is too late to plead

10. 10Which small commercial claims cannot be appealed?

    Small claims of no more than SAR 50,000, as determined by the Supreme Judicial Council. Under Article 78 of the Commercial Courts Law, all first-instance judgments can be appealed except in these claims. Even in such a claim, an appeal remains open against a judgment declining jurisdiction, declaring the claim inadmissible on formal grounds, refusing to hear it because time has run, or treating it as never filed. These claims should not be confused with cases heard by a single-judge circuit.

    SourceCommercial Courts Law, Art. 78 (Ministry of Justice legal portal)Implementing Regulation of the Commercial Courts Law, Art. 207 (Ministry of Justice legal portal)

    Read moreAppealing a judgment: what to review before drafting

11. 11Is a SAR 1 million commercial claim necessarily a small claim?

    Not necessarily. Article 237 of the Implementing Regulation treats a claim as a small claim if it is a dispute between merchants or a claim against a merchant over a commercial contract, and is worth no more than SAR 1 million, except claims arising from construction contracts. So a SAR 1 million claim of either kind is a small claim unless it concerns construction contracting. Claims arising under the Companies Law, the Bankruptcy Law or the intellectual property laws, and partnership-contract disputes, are never small claims, whatever their value. Small claims follow a shorter procedure that normally ends within 90 days of registration. Being a small claim does not bar an appeal unless the claim is worth no more than SAR 50,000, under Article 78 of the Law.

    SourceImplementing Regulation of the Commercial Courts Law, Arts. 237 and 239 (Ministry of Justice legal portal)Commercial Courts Law, Art. 78 (Ministry of Justice legal portal)

    Read moreAppealing a judgment: what to review before draftingA commercial claim: what to prepare before registration, and when it is too late to plead

    Ask about your own case

12. 12What should I do if the court's registration office refuses my statement of claim because documents are missing?

    Supply what is missing within 15 days of being notified of the refusal. If the claim is then registered, it counts as registered from the date of the original request. If you do not complete it within that period, the request is treated as never made. The office must record the date the request was filed in every case.

    SourceCommercial Courts Law, Art. 21 (Ministry of Justice legal portal)

    Read moreA commercial claim: what to prepare before registration, and when it is too late to plead

    Ask about your own case

13. 13Can I challenge a decision not to register a commercial claim?

    Yes. You may file a grievance with the president of the court within 15 days of being notified that the claim was not registered. The president, or a judge of the court the president delegates, decides it, and that decision is final.

    SourceCommercial Courts Law, Art. 21 (Ministry of Justice legal portal)

    Read moreA commercial claim: what to prepare before registration, and when it is too late to plead

14. 14When must the defendant file a defence memorandum in a commercial case?

    At least one day before the hearing set for the case. Article 22 of the Commercial Courts Law requires the defendant, except in urgent applications, to file a memorandum containing the answer to the claim, all defences, the defendant's requests and all supporting grounds. In small claims the memorandum is due at least one day before the preparatory hearing. A party who fails without excuse to file what is required on time may be fined or have its incidental claims or counterclaims refused.

    SourceCommercial Courts Law, Arts. 22 and 26 (Ministry of Justice legal portal)Implementing Regulation of the Commercial Courts Law, Arts. 81 and 243 (Ministry of Justice legal portal)

    Read moreA commercial claim: what to prepare before registration, and when it is too late to plead

15. 15Can merchants or business partners agree in advance on how their disputes will be litigated?

    Yes, if every party to the dealing is a merchant. Article 6 of the Commercial Courts Law lets them agree on specific pleading procedures, provided public order and the rules of justice are respected. The agreement counts only if it is in writing. It may cover the number of memoranda, notice procedures, deadlines for documents, the choice of a particular expert or accepting the expert's view on the technical issue, the case-management plan, and shortening procedural periods other than those that bind the court. Unless a special provision says otherwise, the parties cannot agree on periods longer than those in the Law and the Regulation. If any party is not a merchant, this rule does not apply.

    SourceCommercial Courts Law, Art. 6 (Ministry of Justice legal portal)Implementing Regulation of the Commercial Courts Law, Arts. 8 and 9 (Ministry of Justice legal portal)

    Read moreBefore signing a partnership agreement: management, profits, exit and disputesA commercial claim: what to prepare before registration, and when it is too late to plead

    Ask about your own case

16. 16When must a party rely on an agreement on special pleading procedures?

    Before the end of the first hearing. Under Article 10 of the Implementing Regulation of the Commercial Courts Law, the right to rely on the agreement is lost if it is not raised by then. The court applies the agreement if it meets the conditions in the Law and the Regulation.

    SourceImplementing Regulation of the Commercial Courts Law, Art. 10 (Ministry of Justice legal portal)

    Read moreBefore signing a partnership agreement: management, profits, exit and disputes

    Ask about your own case

17. 17Is conciliation required before filing some commercial claims?

    Yes. Article 58 of the Implementing Regulation of the Commercial Courts Law requires conciliation and mediation before four kinds of claim can be registered: disputes over partnership contracts; disputes between merchants and claims against a merchant over commercial contracts worth no more than SAR 1 million, with the claims linked to them; claims between spouses or relatives up to the fourth degree; and claims over contracts containing a written agreement to use conciliation, mediation and amicable settlement before going to court.

    SourceImplementing Regulation of the Commercial Courts Law, Arts. 11 and 58 (Ministry of Justice legal portal)

    Read moreThe Penalty Clause: When It Works for You and When the Judge Cuts ItBefore signing a partnership agreement: management, profits, exit and disputesA commercial claim: what to prepare before registration, and when it is too late to plead

    Ask about your own case

18. 18Does a failed conciliation stop a merchant from suing?

    No. The requirement is met by filing a document showing that conciliation ended without settlement or with settlement of only part of the dispute, or by proving that the process began and 30 days have passed since it started, unless the parties agreed on a longer period. In small claims, conciliation may not exceed 15 days. Registering the claim does not stop the conciliation from continuing. If the claimant files no such proof, the claim is not registered until it is supplied.

    SourceCommercial Courts Law, Arts. 8 and 21 (Ministry of Justice legal portal)Implementing Regulation of the Commercial Courts Law, Arts. 59 and 240 (Ministry of Justice legal portal)

    Read moreA commercial claim: what to prepare before registration, and when it is too late to plead

    Ask about your own case

19. 19Can the commercial court propose a settlement after the claim is registered?

    Yes. Offering settlement to the parties is part of the preparatory hearing the court holds before the pleadings. At any stage, the court may also refer the parties to conciliation and mediation if they agree, and this is recorded in the case file. A settlement reached before the circuit is recorded in minutes signed by the parties and approved by the presiding judge; those minutes are an enforceable instrument and the case ends.

    SourceImplementing Regulation of the Commercial Courts Law, Arts. 60 and 90 (Ministry of Justice legal portal)Commercial Courts Law, Art. 29 (Ministry of Justice legal portal)

    Read moreJudicial costs in Saudi Arabia: assessment, objection and recovery

20. 20Can the parties agree to conduct an entire commercial case in English?

    Generally, no. Arabic is the official language of the courts: non-Arabic speakers are heard through an interpreter, and documents in a foreign language are filed with a certified translation. This applies in the commercial courts wherever their own law is silent. What the Regulation does allow is an agreement to conduct the pre-filing preparation stage, such as mediation, the exchange of documents and memoranda, and a meeting to define the claims, in a foreign language, provided everything is submitted to the court with a certified Arabic translation. The court may accept a party's own translation if the other side does not challenge it.

    SourceLaw of Procedure before Sharia Courts, Art. 23 (Ministry of Justice legal portal)Commercial Courts Law, Arts. 19 and 93 (Ministry of Justice legal portal)Implementing Regulation of the Commercial Courts Law, Arts. 4 and 5 (Ministry of Justice legal portal)

    Read moreA commercial claim: what to prepare before registration, and when it is too late to plead

21. 21Can a party to a commercial case see all the case papers?

    As a rule, yes. Under Article 29 of the Commercial Courts Law, the parties or their representatives may inspect the case papers and obtain copies. But on the request of an interested party, the court may order some papers kept confidential or allow them to be viewed without being circulated.

    SourceCommercial Courts Law, Arts. 13 and 29 (Ministry of Justice legal portal)Implementing Regulation of the Commercial Courts Law, Art. 50 (Ministry of Justice legal portal)

22. 22Can I ask for some business documents filed in court to be kept confidential?

    Yes. As a rule, commercial case data and papers are open to public inspection for a fee. Any party or interested person may ask for some case papers or documents to be kept confidential, giving reasons. The court may make them confidential temporarily until it decides. It may then restrict them to the court and the parties, allow them to be viewed without being circulated, or keep them confidential temporarily. Its decision on the request cannot be challenged in any way.

    SourceCommercial Courts Law, Art. 13 (Ministry of Justice legal portal)Implementing Regulation of the Commercial Courts Law, Art. 50 (Ministry of Justice legal portal)

    Ask about your own case

23. 23Can a party be fined for breaching commercial-court procedure or courtroom order?

    Yes. If a party breaches any step of the procedure or the order of the hearing, the court may impose a fine of up to SAR 10,000, without prejudice to any other penalty. The order is final. If it is made against a lawyer or another licensed professional involved in the case, the court notifies the relevant authority.

    SourceCommercial Courts Law, Art. 13 (Ministry of Justice legal portal)Implementing Regulation of the Commercial Courts Law, Arts. 65 and 66 (Ministry of Justice legal portal)

    Read moreA commercial claim: what to prepare before registration, and when it is too late to plead

24. 24What happens if a party does not file documents the court asked for by the deadline?

    The party may be fined or have its incidental claims or counterclaims refused. If a party fails without excuse to file what it was asked for on time, the court may fine it up to SAR 10,000 or refuse its incidental claims or counterclaims. The fine decision is final. The same applies to anything requested at the case-preparation stage. A decision refusing the claims may be challenged together with the appeal against the judgment on the merits.

    SourceCommercial Courts Law, Arts. 13 and 26 (Ministry of Justice legal portal)Implementing Regulation of the Commercial Courts Law, Arts. 67 and 68 (Ministry of Justice legal portal)

    Read moreA commercial claim: what to prepare before registration, and when it is too late to plead

    Ask about your own case

25. 25Can a commercial hearing be adjourned more than once for the same reason?

    No. A hearing may be adjourned only for a reason that requires it, recorded in the minutes, and never more than once for the same reason. The Regulation also caps adjournments after the preparatory hearing at 60 days, and at 30 days for a second adjournment. There are at most two pleading hearings after the defendant is notified, except in exceptional circumstances such as the sudden illness of a party or a witness unable to attend for an unforeseen reason.

    SourceCommercial Courts Law, Art. 27 (Ministry of Justice legal portal)Implementing Regulation of the Commercial Courts Law, Art. 93 (Ministry of Justice legal portal)

    Read moreA commercial claim: what to prepare before registration, and when it is too late to plead

These answers are brief general information. They are no substitute for a review of the facts and documents of a particular matter.