Main menu


Legal consultant Belal Elshazly explains how the Kingdom deals with the civil transactions system.


Legal advisor and lawyer Belal Elshazly explained that Saudi Arabia recently implemented the Civil Transactions System, which was received with much joy and celebration by the Saudis. This system is one of the regulatory authority's innovations in Saudi Arabia, as part of a series of legal legislations announced by His Royal Highness Crown Prince Mohammed bin Salman, may God protect him.

Belal Elshazly stated that Saudi Arabia has been taking significant steps in recent years towards developing the legislative environment, through the establishment and reform of systems that protect rights, uphold principles of justice, transparency, human rights protection, and achieve comprehensive development, enhancing the Kingdom's global competitiveness. This system aims to address many problems and challenges facing society in general, particularly civil issues arising from contractual relationships. Therefore, legal scholars have referred to it as the "father of laws" as it fills in gaps in laws lacking clear provisions, clarifying ambiguous points and ensuring coherence. It serves as the backbone of the legal system.

Furthermore, Belal Elshazly highlighted that the Civil Transactions System is the third specialized legislation issued in the Kingdom, representing a qualitative leap in justice administration. It contributes to modernizing and improving judicial methodologies and procedures, applying new and advanced techniques in legal proceedings and judicial decisions. It also enhances the overall judicial sector and boosts citizens' confidence in the country's judicial and legal system. This system helps expedite and simplify procedures related to contractual relationships, regulate relationships between contracting parties, enhance trust in the business sector, and support the investment environment in the Kingdom.

According to the system, Article 1 stipulates that the provisions of the Civil Transactions System apply to all matters covered either explicitly or implicitly. In the absence of a specific provision, general principles stated in final provisions are applied. If no such rule exists, provisions derived from Islamic Sharia law most suitable for this system are applied.

The Saudi regulator's intention was not only to list sources for implementing the system as mentioned in Article 1 but also to emphasize their importance and prioritize their application and enforcement. To implement the system's provisions, judges must extract judgments from the system's texts, either literally or contextually. This means deriving judgments from the text's wording or implications, or by revealing its meaning or implications through various interpretive methods.

Belal Elshazly pointed out that the Civil Transactions System consists of 721 articles aimed at ensuring legal stability for effective investment. The system clarifies and explains obligations and their sources, which are categorized by the regulator into five sources: contracts, unilateral will, harmful act, enrichment without cause, and regulations. The regulator focused on explaining contract theory by detailing its pillars, types, effects, and cases of termination or annulment. He also addressed the consequences of obligations, whether they must be fulfilled specifically or compensated if physical execution is not feasible. The regulator emphasized compensation for both material and moral damages, as Article 38 clarified compensation for physical or psychological harm resulting from encroachment on one's body, freedom, property, reputation, or social status.

Additionally, the regulator organized provisions and rules to ensure creditors can recover their rights from debtors while balancing creditors' and debtors' interests.

Furthermore, Al-Dagjani stated that one of the key aspects introduced by the legal regulator was detailing named contracts and discussing their provisions. He categorized contract provisions into those transferring ownership, such as sales contracts, gift contracts, loan contracts, and reconciliation contracts, along with their respective obligations and rights. He also discussed contracts based on benefit, such as lease contracts, regulating the relationship between lessors and lessees, loan contracts and their nature. Additionally, he touched on employment-related contract provisions by addressing subcontracting contracts and specifying obligations for both subcontractors and employers. The regulator explained the standard of a subcontractor's obligation in executing work when materials are provided by the employer.

The regulator also discussed agency contracts, deposit contracts, custody contracts, detailed provisions of guarantee contracts, and their implications.

The system also regulated the provisions of company contracts that do not fall under the specified forms of companies, such as speculative contracts, profit-sharing contracts, and agricultural partnership contracts. The regulator did a good job when he detailed the provisions of real rights and ownership rights in terms of scope and restrictions, as well as addressing common ownership provisions, their division, how ownership is acquired, and the rights acquired through it such as disposal and enjoyment. He emphasized that this system came as a support and facilitator for an attractive investment environment, contributing to increasing predictability of judicial decisions, enhancing transparency, and strengthening the stability of judicial rulings.

journalist since 2011, member of the Journalists Syndicate, graduate of the University of Montreal, Journalism and News Editing Division, media advisor, He writes about health, skin care and relaxation.