Saudi Arabia is undergoing judicial reforms following the announcement by Crown Prince Mohammed bin Salman about the Cabinet’s approval of the new Civil Transactions Law.
The new regulation is considered a significant advancement in specialized laws governing contracts and financial transactions between individuals. It aims to organize economic activity and improve investment opportunities.
Crown Prince Mohammed bin Salman had said that the Civil Transactions Law represents a “remarkable transformation” within the system of specialized legislations.
The law was prepared in a way taking advantage of the latest legal trends and the best international judicial practices, in light of the provisions of the Islamic Shariah and its purposes, explained the Crown Prince.
It also comes in harmony with Saudi Arabia’s international obligations considering the agreements that have been ratified by it to keep pace with the developments of contemporary life, he added.
He said that the law was based on foundations represented by the protection of property, stability and validity of contracts, identification of sources of rights and obligations and their effects, and clarity of legal positions.
The Crown Prince said that the law will have a positive impact on the business environment and increase its attractiveness, and will also contribute to regulating economic movement and the stability of financial rights, in addition to facilitating decision-making with regard to investment.
He added that it will also enhance transparency and increase the ability to predict judgments in the field of civil transactions and reduce discrepancies in judicial reasoning to reach prompt justice, apart from contributing to bringing down disputes.
He highlighted the delay in the law’s approval, originally expected in the fourth quarter of 2022, saying that it was necessary to carry out further studies as well as scrutinize the provisions of its regulations.
The Civil Transactions Law includes provisions that define contracts, such as the elements of a contract; its validity; its effects among the contracting parties; the provisions related to its invalidity and termination; and the provisions of the harmful act and rules for compensation. The statutory texts of the law also deal with all forms of ownership and their provisions.