Welcome to the Saudi Arabia focus edition of Law Update.
One of the key markets in the Middle East and North Africa (MENA) that continues to lead from the front is the Kingdom of Saudi Arabia (KSA). As the largest country in the Middle East and the 18th largest economy in the world, the progress KSA continues to make is underpinned by its Vision 2030 that envisions developing the country as an investment powerhouse and hub that ultimately connects Asia, Europe, and Africa. Given Saudi Arabia’s significance to the regional economy, our team of experts have prepared a range of pertinent articles that provide insights into new laws, regulations, and the legal landscape in the Kingdom.
This edition will provide you with an up-to-date guide on matters such as; the framework issued by the Saudi Central Bank on IT governance, the anti-corruption landscape under Vision 2030; we also provide practical tips for dispute avoidance. This is only a snapshot; there are many more articles within the KSA focus section for you to read, which we hope you will find valuable and enjoyable.Read the edition
These hold that personal freedom and the rights of movement outside the state should not be restricted except in accordance with the law.
A local company (the “Claimant”) filed a civil case against a foreign company (the “Defendant”) requesting the court to issue a judgment obligating the Defendant to pay a ratio of 5% of the total sum of the contracted project, in addition to compensation in the amount of QAR 1,000,000.
Simultaneously, the Claimant submitted a request for the court to impose a travel ban against the Defendant’s representatives (ie. managers and authorised signatories). The Claimant’s grounds for the request were that the Defendant may smuggle the company’s assets outside Qatar. The competent judge issued an order imposing a travel ban against the Defendant’s representatives.
The Defendant’s representatives (the “Petitioners”) appealed the decision of the judge regarding the imposition of the travel ban, before the Court of First Instance, based on the following reasons:
In view of the above, the Petitioners argued that the court’s order preventing them from travelling restricts their freedom in breach of the principle of freedom of movement guaranteed by the Qatari Constitution and the provisions of the Commercial Companies law. The reasoning for this was twofold:
Ruling of the Court of First Instance
The Court of First Instance accepted the Petitioners’ arguments and issued a judgment revoking the travel ban based on the following reasons:
The Claimant did not submit an appeal for this judgment; therefore, the judgment became final.
Significance of the Ruling
This judgment is a clear example of the court’s application of the provisions of the Qatari Constitution which uphold a person or persons’ freedom of movement without any restrictions. The judgment confirmed that a travel ban should be restricted to circumstances where there are serious reasons justifying its imposition, such as that the debtor will flee the country or will transfer his assets outside Qatar. It should be subject to the applicant’s ability to provide prima facie evidence that such risks exist. The judgment should allay limited liability managers’ fears that a travel ban may be imposed against them for the debts or liabilities of their company.