The lawsuit before the Securities Disputes Resolution Committee

The lawsuit before the Securities Disputes Resolution Committee

The significant transformation movement that the Kingdom has witnessed in recent years reflects its firm commitment to developing and enhancing this sector by establishing advanced systems and regulations. The securities sector in Saudi Arabia is one of the most sustainable and dynamic sectors, as it plays a vital role in supporting investments, financing companies, and stimulating economic growth. The importance of this sector is evident in providing diverse and influential investment opportunities for local and foreign investors, and enhancing transparency and confidence in the Saudi financial markets.

Among the main elements for developing the securities sector is the great focus on regulating the settlement of securities disputes. Thanks to the Kingdom’s efforts to establish an advanced legal framework to enhance justice and transparency in settling financial market disputes, the legal risks that companies and investors may face are reduced, which provides a reliable and sustainable business environment for all parties concerned From this standpoint, in this article we will talk about the procedures for filing a lawsuit before the Securities Disputes Resolution Committee in accordance with what is stated in the Regulations for Procedures for Resolution of Securities Disputes issued by the Capital Market Authority.

File a lawsuit

• Submitting the complaint to the Capital Market Authority 

No claim may be filed with the Committee unless a complaint is first filed with the Capital Market Authority, and unless a period of ninety days has passed from the date of filing it, unless the Authority notifies the complainant of the permissibility of filing with the Committee before the expiry of the period.

• Considering grievances against decisions and procedures issued by the Authority, the Market, the Depository Center, or the Clearing Center 

A grievance against decisions and procedures issued by the Authority, the Market, the Depository Center, or the Clearing Center before the Committee must be preceded by submitting the grievance to the Authority within sixty days from the date of knowledge of this decision or procedure, and knowledge of them must be achieved by informing the concerned parties or announcing it on the website of the Authority, the Market, the Depository Center, or Clearing Center.

• Submit the grievance to the committee 

If the Authority issues a notification rejecting the grievance or the stipulated ninety-day period has passed without a decision being made, a grievance lawsuit may be submitted to the Committee ninety days from the date of learning of the decision issued to reject or the expiration of the aforementioned period without a decision being made on the grievance.

• Representation in the case 

In all lawsuits to which it is a party, the Capital Market Institution or the listed joint stock company must have filed or pleaded the lawsuit and submitted any requests or memorandums to the Committee or the Appeals Committee from a lawyer or regular representative licensed in the Kingdom, and no lawsuit, pleading, requests or memorandums submitted in violation of the above will be accepted.

• The lawsuit 

The plaintiff submits a request to file a lawsuit to the committee in a lawsuit document submitted to the General Secretariat. The person filing the document must provide in writing the number and date of the filing request. The lawsuit document must meet the following two requirements:

The claim record must include the following information:

The plaintiff’s full name, identity number (or what acts in his place with respect to legal persons), national address, means of contacting him, full name of his representative (where applicable), identity number, national address, means of contacting him, and regular document of representation (where applicable).

The defendant’s full name, ID number (or what it replaces for legal persons), address, and means of contacting him. If the lawsuit is a private right lawsuit related to a criminal lawsuit and the plaintiff does not have the defendant’s data, it is sufficient for the plaintiff to provide the criminal decision number related to the defendant.

The date of filing the lawsuit, the subject of the lawsuit, what the plaintiff requests, and all his evidence and documents supporting his lawsuit.

For private right claims, proof must be attached that the complaint has been filed with the Authority and that ninety days have passed from the date of filing it, or a notification must be attached from the Authority that filing with the Committee is permissible before the expiry of this period.

For grievance claims, proof of the grievance from the decision or procedure that is the subject of the claim must be attached, and the data that must be available in the claim sheet must be added: the date of notification of the decision or procedure that is the subject of the claim, or the date of its announcement (as applicable), and the date and result of the grievance.

For criminal cases, the claim form must be submitted if it meets the requirements set forth in the Code of Criminal Procedure.

The parties to the lawsuit and its subject matter in the lawsuit document must be the same parties and subject matter of the complaint before the Authority.

It is not acceptable for the plaintiff to combine several requests in the lawsuit document that are not linked to each other, even if they are included in a single notification issued by the Authority permitting filing with the committee. The General Secretariat shall also notify the plaintiff in the event that none of the stipulated requirements are met, and the plaintiff must meet those requirements within ten days from the date of the notification, otherwise the request to file the lawsuit document will be considered as if it did not exist.

• Filing a lawsuit with the committee 

The Secretary-General shall file the lawsuit by registering the lawsuit document received by the General Secretariat within a period not exceeding three days from the date of receipt, if it meets the required requirements, with a serial number in a special register prepared for this purpose. The plaintiff shall be notified in writing of the filing number and its date. The Secretary-General shall also organize, arrange, number and preserve the register of lawsuits.

• Start considering the case

The Chamber shall begin examining the lawsuit within a period not exceeding fourteen days from the date of its filing with the Committee, by informing the defendant of the lawsuit document and requesting his response thereon. If the Chamber deems that the lawsuit document is not prepared in the manner necessary to examine and adjudicate the lawsuit, it shall ask the plaintiff what is necessary to prepare his lawsuit in accordance with the regulations of procedures for adjudicating securities disputes If the plaintiff is unable or refrains from filing his lawsuit, the department shall issue a decision to dismiss the lawsuit.

• Suspension of implementation of the contested decision or procedure 

Filing a grievance before the Committee does not result in the suspension of the implementation of the contested decision or procedure of the authority, market, depository center, or clearing center, provided that the department may order the suspension of the implementation of the decision if the plaintiff requests it and the department deems that its implementation creates effects that are impossible to remedy.

• The statute of limitations for the lawsuit 

A claim for a private right under Articles 55, 56 and 57 of the Regulations shall not be heard if the complaint is filed with the Commission one year after the date on which the complainant is presumed to have become aware of the facts that led him to believe that he was the victim of a violation. Under no circumstances may such a claim be heard before the Commission five years after the alleged violation occurred Unless the defendant acknowledges the right or the plaintiff presents an excuse that the committee accepts.

Reporting the lawsuit

• Means of reporting securities disputes 

The General Secretariat shall inform the person to be notified by any of the following means of notification:

1. Specialists in the General Secretariat.
2. Book registered by mail.
3. Fax.
4. Email.
5. Text messages sent via a verified mobile phone, or one of the accounts registered in any of the government’s automated systems.
6. Recorded telephone call.
7. Notification via the electronic platform.
8. Any other means approved in the systems of criminal pleadings and procedures and the general rules in force in the Kingdom as a means of judicial notification.

It is worth noting that regarding notification by (specialists in the General Secretariat – a registered letter by mail), it is done at one of the following addresses:

1. The national address, or the address chosen by the parties or their representatives by law and recorded in the statements of the lawsuit newspaper or any of the memorandums or documents submitted in the lawsuit itself.
2. The address notarized by the Authority of any of the persons subject to its supervision.
3. The registered address of the person required to be notified to any of the persons subject to the Authority’s supervision.
4. The address recorded in the commercial register. For companies or institutions to which notification is addressed to one of their branches, notification shall be made using the address recorded in the commercial register of that branch.
5. The address written in the contract subject to dealing with disputes arising from that contract.
6. The address registered with the General Secretariat, the authenticity of which has been acknowledged by its owner in accordance with the form prepared for this purpose.
7. The address chosen by the foreigner in the Kingdom.
8. If the residence address of the person to be notified is outside the Kingdom, a copy of the notification shall be sent to the Ministry of Foreign Affairs for delivery through diplomatic means. A response stating that the copy has reached the person to whom the notification is addressed shall be sufficient.

• Notification in exceptional cases 

If the place of residence or address of the person to whom notification is requested is not known, or if notification cannot be delivered to him, the head of the department may decide on the method he deems appropriate and feasible to carry out the notification, including notification through the competent authorities. If notification is not achieved, the head of the department may decide to publish an announcement to that effect in the Official Gazette or any of the local newspapers or the website of the General Secretariat.

Procedures for hearing the case

• Case hearing sessions 

The Chamber shall hold sessions to consider the cases registered with it in the presence of three members unless the President of the Chamber deems otherwise, and the Chamber may decide on the case registered with it when it deems it valid to decide it without the need to hold sessions to consider it.

• Preparing the member for the lawsuit and preparing it for adjudication 

The Department may entrust one of its members with preparing the case and preparing it for adjudication, including requesting the completion of memoranda and documents or permission to submit them to the Department, preparing a study of the case, and proposing a draft decision.

• Publicity of sessions 

The department’s sessions shall be public unless the department deems it confidential.

• Adjust sessions 

The presiding officer of the session shall be responsible for controlling and managing it and maintaining order during the session. To this end, he may order that anyone who disturbs its order be removed from the session hall, and may order that offensive expressions or expressions that violate morals or public order and are not required by the right of defense not be recorded in the session minutes or erased from any memorandum or paper submitted by the parties to the case, and may order that a report be prepared on every violation or crime that occurs during the session.

• Minutes of meetings 

Each department shall have one (or more) secretaries who shall write the minutes of the department’s sessions under the supervision of its president in a special register prepared by the General Secretariat for this purpose. The date and time of opening of each session, the time of its conclusion, the place of its holding, the name of the member or members of the department who considered the case, and the parties to the case shall be recorded in the minutes. All procedures and facts that take place in the session, the testimonies heard in it, and the statements, requests, and defenses of the parties shall also be recorded The minutes shall be signed by the member or members who considered the case, the secretary, the parties, and those whose statements are proven therein. If one of them refuses to sign, this shall be proven in the minutes of the session.

• Postponing sessions 

The Chamber may not postpone the session, based on the request of one of the parties to the case for the same reason, more than once, except for an excuse accepted by the Chamber, provided that the date set for the next session does not exceed a maximum period of fifteen days from the date of the postponed session.

• Incidental requests 

The incidental requests submitted by the party to the lawsuit are submitted by a memorandum communicated to the other party, or by a request submitted orally in the session in the presence of the other party, and recorded in its minutes, and the incidental requests are not accepted after the door to pleading is closed, and the incidental requests submitted must be related to the original request in the lawsuit.

• View the lawsuit documents 

It is not permissible to rely on the documents or memoranda of one of the parties to the lawsuit without enabling the other party to view them. Any of the parties to the lawsuit or their representatives has the right to view the lawsuit file, and whenever the parties express what they have at the end of the pleading, or enable the fulfillment of their requests and defenses, the circuit has the right to close the door to pleading in the lawsuit whenever it is valid for adjudication When the pleading period is closed, the Chamber may authorize the parties to the case to submit supplementary memoranda.

• Assigning the reserve member 

The reserve member shall undertake any of the work of the department members based on the direction of the department head, in addition to other work entrusted to him by the department head.

The presence and absence of the parties to the case 

• The plaintiff’s presence and absence 

The parties to the lawsuit or their representatives shall appear at the time specified for the lawsuit to be heard. If the plaintiff is absent from a hearing and does not present an excuse acceptable to the Chamber, it may decide the lawsuit if it is valid for decision or order its cancellation. The plaintiff may request that it be decided within sixty days from the date of cancellation. If that period has expired and the plaintiff has not requested that it be decided, or has not yet appeared to decide it, the lawsuit shall be considered as if it had never existed And after that you only hear of a new restriction.

• The defendant’s presence and absence 

If the defendant is absent, the Chamber may postpone consideration of the case until another session in which the defendant is announced, and if he is absent from this session without an excuse accepted by the Chamber, the Chamber shall decide the case, and its decision shall be considered against the defendant in absentia unless he has been informed of his person, his legal representative, or his regular representative, or He submitted a response or attended any of the sessions to consider the case, or his absence was after the door to pleading was closed The decision against him is in his presence.

• The presence of the accused in the criminal case 

The accused shall attend the hearing sessions himself or by his representative in the criminal case, and the circuit may order the accused himself to appear before it. If the accused or his representative does not appear, his presence shall be re-requested for another session. If he fails to appear after that or is not notified, the circuit may request the executive authorities to bring him on the specified dates If he or his representative does not appear, the Department may issue a decision, as it deems appropriate, prohibiting travel or trading in the market, purchasing or seizing his bank and investment accounts or any of his properties, and publishing in the Official Gazette or any of the local newspapers or the website of the General Secretariat an announcement of his presence If he does not appear before the Chamber after that on the specified dates, it may keep the case before it until he is brought or a representative is present on his behalf, unless the Chamber deems it necessary to issue a decision in absentia against him, and the decision is considered in his presence whenever the accused or his representative attends one of the sessions, or submits a memorandum of his defense.

• Attendance time 

Anyone who does not appear within thirty minutes of the scheduled start of the session shall be considered absent unless the Chamber decides to extend this period.

Issuing a decision in the case

The decisions of the Chamber shall be issued by three members, including its President or his representative. The decision shall be unanimous or by a majority of opinions. If the decision is taken by majority, this shall be stated therein. The dissenting member shall submit his opinion in writing and with a reason. The majority may clarify its point of view in responding to the dissenting member’s opinion, and this shall be included in the lawsuit file.

The text of the decision shall be read in a public session, except for decisions taken regarding any of the temporary measures, precautionary measures and formal defenses. In the circumstances it deems appropriate, the Chamber may suffice with notifying the parties to the case of the decision. The Chamber must make the parties understand that they may request an appeal of the decision within thirty days of being notified of it, and that the decision shall be final and enforceable after the end of that period unless any of them submits his appeal list during that period.

You can contact the office of lawyer Abdul Majeed Al Rashid for legal consultations