Saudi Gazette report

RIYADH — Saudi Crown Prince and Prime Minister Mohammed bin Salman has said that the new Civil Transactions Law represents a remarkable phase within the system of specialized legislation and judicial reforms.

He announced that the law, approved by the weekly session of the Council of Ministers on Tuesday, constitutes one of the four key judicial reform legislation being introduced in the Kingdom.

"The Civil Transactions Law is an anticipated major shift toward judicial reform, and was issued based on the latest legal trends and by applying the best international judicial practices, while adhering to Islamic law." Prince Mohammed said, adding that the law will help the Kingdom to fulfill its international obligations and agreements it ratified to keep pace with modern life.

The Crown Prince thanked Custodian of the Two Holy Mosques King Salman for his constant support for developing the Kingdom’s legislative system, which will reflect on the national development process, ensuring progress and prosperity in all walks of life. He said that the law was approved by the Cabinet after completing the regular procedures and extensive studies by the Shoura Council.

The Crown Prince noted that the Civil Transactions Law is the third of the four key judicial reform legislations, after the previously announced Civil Status Law and the Law of Evidence, in addition to the proposed Penal Code for Discretionary Sentences.

On February 8, 2021, the Crown Prince unveiled plans to introduce these four key legislations as part of measures to reform judicial institutions as well as to improve the “legislative environment” in the Kingdom. Widely considered a new wave of judicial reforms in the Kingdom, these laws are instrumental in raising the quality of the Kingdom’s legislative system and enhancing the efficiency of the judicial institutions.

The Crown Prince said 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 law will have a positive impact on the business environment, increase its attractiveness, and contribute to regulating economic movement and the stability of financial rights, in addition to facilitating decision-making with regard to investment. It will also enhance transparency, increase the ability to foresee judgments in civil transactions and reduce discrepancies in judicial reasoning to reach prompt justice, apart from contributing to bringing down disputes,” he said.

The Crown Prince pointed out that the concerned department delayed the issuance of the Civil Transactions Law from the previously scheduled date in the fourth quarter of 2022 to carry out more studies, as well as to scrutinize and review its provisions. Panels comprising high-level experts have been constituted for this purpose.

“This is in view of the importance of the law, its sensitivity, and its association with many other laws, different fields, and various activities, which required tightening its text and ensuring compatibility with the provisions of other relevant regulations. This was part of an effort to improve and ensure the efficiency of the law in achieving the goals for which it was drafted,” he added.

The issuance of the Civil Transactions Law, which comes in line with the continuous and direct follow-up of the Crown Prince, was aimed at developing the legislative environment in a way that guarantees the efficiency of laws, protecting rights, enhancing transparency, and raising the efficiency of the judicial system, in accordance with the directives of King Salman.

The Civil Transactions Law includes provisions that define everything related to contracts, such as the elements of the contract; its validity; its effects on the contracting parties; the provisions related to its invalidity and termination; and the provisions of the harmful act and the rules for compensation for it. The statutory texts of the law also dealt with all forms of ownership and their provisions.