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
This Judgment highlights the definition of a commercial agent set out in the law and the court’s approach in deciding what constitutes a commercial agency: “Every person exclusively licensed to distribute the goods and products or to put them on sale or circulation or to perform certain services within the scope of the agency on behalf of his principal in exchange of remuneration” Article 2 of Law no. 8 of 2002 of the Qatari Commercial Agency Law.
Following the termination of a distribution agreement between a foreign company (the First Defendant) and its local distributor (the Claimant) in respect of high end prestige automobiles, the Claimant requested the Minister of Business and Trade (the Second Defendant) to place a ban on the importation of the automobiles into Qatar based on Article 17 of Law no. 8 of 2002 (the Commercial Agency Law). The Minister refused the request. The Claimant then commenced proceedings before the Administrative Court against the First and Second Defendants seeking a reversal of the Minister’s decision by the Court.
The Claimant alleged that the Distribution Agreement between him and the First Defendant was a commercial agency agreement and the said agreement was terminated in contravention of the provisions of the Commercial Agency Law and seeking a reversal of the Second Defendant’s decision. The Court of First Instance rejected the claim. The Claimant appealed against the finding of the Court of First Instance and the Court of Appeal overruled the judgment of the Court of First Instance, ruling in favor of the Claimant by reversing the decision of the Second Defendant. Both Defendants filed an appeal with the Court of Cassation against the judgment of the Court of Appeal.
The Court of Cassation decision
The Court of Cassation allowed the appeal of the Defendants and made in its judgment the following points:
Comment on Judgment
The judgment created a precedent in Qatar changing the legal concept of the commercial agency and the practice of registration of commercial agency contracts with the Ministry of Business and Trade. The litigation department of Al Tamimi & Co. in association with Mohammed Al Marri won this judgment for the client, a major foreign company.