Saudi Arabia's New Civil Laws Aim to Boost Investment, but Caution Lingers

Saudi Arabia's New Civil Laws Aim to Boost Investment, but Caution Lingers

January 10, 2024, Reuters

Joseph Chedrawe’s commentary was included in a Reuters article examining Saudi Arabia’s first written civil code, which replaces a system where judges would have full discretion in ruling on commercial disputes using Islamic law, sharia, as guidance. The article explores how the change will affect investment practices in Saudi Arabia.

Joseph told Reuters that “the very existence of a code, which states succinctly and clearly what the legal position is vis-à-vis certain issues be it contract formation, damages, termination, or otherwise, will give much more confidence to investors.” He also spoke to doubts about the new code, saying that “while the new law still broadly follows sharia principles, it is based on the Egypt's 1849 civil law modelled after the Napoleonic Code and sets legal guidelines judges have to abide by. Judges are receiving training in the new law and the law will apply retroactively to all contracts.”