Filing a lawsuit before the Commercial Court in Saudi Arabia

Filing a lawsuit before the Commercial Court in Saudi Arabia

Commercial lawsuits are one of the most common types of lawsuits in Saudi Arabia, due to the growing economic activity and diversity of transactions between companies and individuals. The Commercial Courts System issued by Royal Decree No. (M/93) dated 8/15/1441 AH and its executive regulations regulated the procedures for filing a lawsuit before the Commercial Court to ensure the speedy resolution of disputes and the achievement of justice between dealers in the commercial sector.

What is a commercial lawsuit?

A commercial lawsuit is a dispute that arises from the practice of a commercial activity between merchants or between a merchant and a non-merchant if the dispute relates to a commercial business, such as commercial sales contracts, contracting contracts, commercial debt claim cases, partner disputes, bankruptcy, and others.

Commercial courts are the judicial body competent to hear these disputes, in accordance with the commercial judicial system in Saudi Arabia.

The legal basis for the jurisdiction of commercial courts

• The Saudi commercial court system regulates the jurisdiction of commercial courts and the relationship between them and general courts.
• The commercial justice system also allows filing a lawsuit electronically with specific requirements and procedures.
• Article 20 of the Commercial Courts System specifies some requirements for the commercial lawsuit document. The executive regulations also indicated that filing a lawsuit before the Commercial Court is done electronically via the Commercial Judiciary Platform or the Najez Portal, provided that the regulatory requirements for the lawsuit document are met.

Types of cases within the jurisdiction of the Commercial Court

The Commercial Court has jurisdiction to hear multiple types of cases, the most prominent of which are:

1. Disputes that arise between merchants because of their business.
2. Disputes related to commercial companies (establishment, management, withdrawal, resolution).
3. Claims arising from commercial contracts such as contracting, supply, or franchise contracts.
4. Bankruptcy claims and settlement.
5. Disputes related to commercial papers such as bills of exchange and checks.
6. Objections to decisions issued by the authorities responsible for commercial activity when the system stipulates this.
7. Claims for compensation for damages arising from a lawsuit previously heard by the court.

Spatial jurisdiction of the Commercial Court

Article Seventeen of the system stipulates that the lawsuit shall be filed at the defendant’s place of residence, unless otherwise agreed. As an exception, the lawsuit may be filed at the place of implementation of the contract or the place of the defendant’s primary commercial activity in some special cases.

If the defendant has more than one branch, the lawsuit shall be filed at the headquarters of the branch that initiated the activity related to the dispute.

Basic conditions for accepting a commercial lawsuit

In order for a lawsuit to be accepted before the Commercial Court, several conditions must be met, including:

1. Legal capacity of both parties

The plaintiff and defendant must have the capacity to litigate (individuals or companies) or be represented by someone who has the legal right to do so.

2. The claimed interest and right

The plaintiff must have a legitimate right or interest in the lawsuit, meaning that the lawsuit has legal validity.

3. The lawsuit must be within the jurisdiction of the Commercial Court

That is, the dispute is commercial in nature or related to business or companies, such as commercial disputes between merchants, partner cases, bankruptcy cases, supply contracts, contracting, and others.

4. Fulfilling the conditions of form and procedures

The lawsuit must be submitted in the form of a lawsuit document that meets the required data (the two parties, the title, the facts, the evidence, the requests).

5. Documents supporting the lawsuit must be attached.
6. The required fees, if any, must be paid.
7. Notify the defendant before the lawsuit

In some cases, a written warning or notification to the defendant is required some time before the lawsuit is filed (for example, 15 days).

8. Legal deadline

The lawsuit must be filed within the period specified by law (such as the period specified in the Commercial Judicial System or related regulations) or before the expiration of the statute of limitations if it concerns commercial financial lawsuits.

Documents required to file a commercial lawsuit

According to the Executive Regulations of the Commercial Courts System (Article 36), the electronic lawsuit document includes the following attachments:

• Contracts and invoices supporting the claim.
• Commercial register or national identity of the parties.
• Sharia agency or electronic authorization if the lawsuit is filed by an agent.
• Any additional documents proving the business transaction (correspondence, receipts, transfers, quotes…).

Attempting to reconcile via a consensual platform before filing a lawsuit

Before some commercial lawsuits are filed, the application is automatically referred to the Ministry of Justice’s consensual platform, the official platform for amicable reconciliation.

This step aims to attempt to settle the dispute before registering it judicially, in accordance with what is stipulated in Article (20) of the Executive Regulations of the Commercial Courts System.

If reconciliation is reached between the parties, the platform issues a reconciliation document that is considered an executive document under Article (24) of the Implementation Law.

If reconciliation is not possible within the specified period, the plaintiff is allowed to officially file the lawsuit before the Commercial Court.

Procedures and steps for filing a commercial lawsuit

Here are the steps to follow when filing a business lawsuit:

1. Initial preparations:

• Verify the jurisdiction of the Commercial Court that the dispute is of the type it is considering.
• Collection of documents and evidence: contracts, invoices, correspondence, business records, proof of payment or obligation, witness testimony, etc.
• Power of attorney for a lawyer (if represented by a lawyer): In many commercial lawsuit cases, it is required to be filed by a commercial case lawyer licensed by the Ministry of Justice.
• If required, send a written statement (warning) to the defendant demanding fulfillment before filing the lawsuit (e.g. within 15 days).

2. Drafting the lawsuit:

The commercial claim sheet must include the following:

• Plaintiff’s data (name, address, commercial registration number, if any, identity).
• Defendant’s data (name or company name, address, identity or commercial register).
• Statement of the facts that led to the dispute in chronological order and clearly.
• Legal grounds (statutory texts or contracts on which the case is based).
• Requests (what the plaintiff requests from the court: compensation, enforcement, obligation, etc.).
• List of attached documents.
• Signature, date of submission, and statement of the status of the plaintiff or his agent.

3. Filing a lawsuit (registration)

Submitting the lawsuit document to the competent commercial court via the electronic platform (such as the Commercial Judiciary Portal or via “the lawsuit document” on the Najiz platform).
The court examines the case and determines whether it meets the conditions. If there is a shortage of the claim form or papers, the applicant is given a period of time to complete the shortage (for example, 15 days).
Upon completion of the deficiency, the claim is officially registered from the date of submission of the application.

4. Invite the defendant and exchange notes

The case shall be formally notified to the defendant (by legal notification).

The defendant is given a period of time to respond (usually 30 days) to the lawsuit and present his defenses and opportunities for defense.

Exchange of memorandums between parties, submission of additional documents, requests for evidence or expertise if necessary.

5. Considering the case and pleading

• Court sessions are held to hear the case. The pleading may be in writing or oral, depending on the case.
• In minor cases, the court may issue a ruling in one session.
• The court may request technical expertise or survey reports if the dispute is over technical matters.

6. Judgment and its implementation

• The court issues its ruling after completing the pleading and deciding the dispute.
• If the judgment becomes final, its enforcement may be required, and enforcement of the instrument may be required or the defendant may be obligated to do what he ruled.

Some important notes and points about commercial disputes

Here are some important points that should always be taken into consideration

• Advance written notification: In some commercial disputes, a legal warning is required to be sent to the defendant before filing the lawsuit (often 15 days).
• Electronic lawsuits: The system allows filing a lawsuit electronically through the commercial judiciary portal without the need to appear in court initially.
• Deadline and issuance of the lawsuit: Some cases may be dropped if they exceed the statute of limitations or are not filed in a timely manner.
• Completion of the deficiency: If the court refuses to register the case due to a deficiency, the plaintiff is given a period of time to complete it, and if he does not complete it, the case is considered as if it had not been submitted.
• Pre-suit performance request: In commercial debt claims, a judicial warning is usually provided via the “Financial Claim Notification” service before the claim.
• Difference in values: In some cases, small financial values may be considered in special courts or by simplified mechanisms.

Commercial lawsuit costs

The provisions of the Judicial Costs System issued by Royal Decree No. (M/16) of 1443 AH apply to commercial lawsuits, as fees are determined according to the type and value of the lawsuit.

The system aims to rationalize lawsuits and achieve fairness in bearing costs without prejudice to the right to litigation.

The most important reasons for rejecting a commercial lawsuit

The court refuses to register or consider the case in the following cases:

1. Lack of quality or interest.
2. Filing a lawsuit before a court that does not have qualitative or spatial jurisdiction.
3. Lack of claim paper or documents.
4. Failure to complete the deficiency within the specified regular period (usually 15 days).
5. The dispute itself was previously decided by a final ruling.

Appeal against the Commercial Court ruling

Judgments issued by commercial courts in accordance with Article (22) of the Law may be objected to within thirty days from the date of receipt of the ruling, unless the ruling was issued urgently.

The objection shall be submitted electronically via the Najiz portal, accompanied by the objection list and a copy of the ruling.

Commercial courts of appeal have jurisdiction to hear these objections, and have the authority to uphold, amend, or overturn the ruling.

You can contact a lawyer from Abdul Majeed Al Rashid Law Firm and Legal Consultations who specializes in commercial cases from the beginning, making a clear difference in the accuracy of procedures and the speed of handling the case.

In conclusion

Filing a lawsuit before the Commercial Court in Saudi Arabia is a systematic and organized procedure aimed at achieving commercial justice and protecting trust in transactions between merchants and establishments. Adherence to the system’s requirements and filing a lawsuit through official channels ensures speedy resolution and enhances the business environment in the Kingdom within a transparent and advanced digital judicial framework.