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Saudi Arabia – Judicial Costs Regulations

Aug 24, 2022

Saudi Arabia – Judicial Costs Regulations

On 31 August, 2021 (23/1/1442 H.), the Saudi Council of Ministers approved the Judicial Costs Law (the “Law”).  The Law has been published in the official gazette on 17 September, (12/02/1443 H) which came into force in March 2022.

The Executive Rules or the Rules of Implementation of the Law (the “Executive Rules”) have been issued vide Council of Minister Decision No: 519 dated 11/09/1443 H. (12 April, 2022 G.) and duly approved by Royal Chambers Circular No: 57739 dated 14/09/1422 H. (15 April, 2022).

Objectives of the Regulations

The Law is aimed at (a)eliminating or restricting malicious or fictitious lawsuits, (b)urging litigants to take the route of compromise or amicable settlement to settle their disputes, and (c)emphasizing the importance of documenting evidence and contracts.[1]

Application

The Law shall be applicable to all types of lawsuits and petitions to courts except for (a) criminal and disciplinary lawsuits against public officials, (b) petitions for enforcement of judgments and orders, (c) the lawsuits and requests falling under the jurisdiction of personal affairs courts concerned with family disputes, (d) the lawsuits and requests falling under the jurisdiction of the board of grievances (administrative courts) filed in against governmental bodies, (e) the lawsuits and claims originating from application of bankruptcy law, and (f) requests for declarations (endowments; request for issuance of title deeds etc.). [2]

Judicial Charges / Court Fee

The judicial cost/fee for raising lawsuits has been stipulated as follows[3]:

  • 5% of the claim value for all claims below SR. 100,000.00
  • 4% of the claim value for all claims above SR.100,000.00 but below SR.500,000.00
  • 3% of the claim value for all claims above SR.500,000.00 but below SR.1 million
  • 2% of the claim value for all claims above SR. 1 million

In no case shall the fee exceed 5% of the claim value.

Regarding lawsuits covering real estate, the fee will be based on the value of the subject property at the time the claim is raised.

Where the lawsuits do not have any valuations fixed, the following fee schedule shall apply:

  • Private criminal lawsuit: SR.10,000.00
  • Lawsuit to be heard by commercial courts or commercial circuits: SR.5,000.00
  • Urgent lawsuits before any of the courts: SR.3,000.00
  • Lawsuits before general courts: SR.3,000.00
  • Disputes related to the execution of judgments: SR.3,000.00
  • Lawsuits to be heard by labor courts: SR.2,000.00

If a court quashes a lawsuit or dismisses it for not being raised in the required form and the plaintiff insists to continue with the case subsequently, there will be an additional fee equivalent to 25% of the original fee.[4]

A fee equivalent to 1% of the arbitral award (subject to a maximum of SR.1 Million) shall be imposed on the party requesting nullification of the arbitral award if the court dismissed the request.

The fee for requests (other than raising of the lawsuits) has been determined under the Executive Rules: (a) appeal petitions: SR.5,000.00, (b) reconsideration petitions: SR.10,000.00, (c) cassation petitions: SR.7,000.00 (d) petitions to join a lawsuit, request for correction or interpretation of judgments or request for stopping of enforcement of judgment: SR.2,000.00, and (d) petitions to resume a suspended lawsuit before the end of the required period.[5]

On another hand, the Executive Rules provide particular fees for certain requests. [6]The fee for requests to a court by an interested party for issuance of an attested document from the case file or register shall be SR.100.00.  Similarly, the fees for the examination of one of the attested documents of the case file shall be SR.50.00 and the fees for requesting a copy of the case file shall be SR 100.00.

If a court dismisses a lawsuit for lack of jurisdiction, there will be no new charges for raising the lawsuit with the competent court.  Similarly, if the Supreme Court returns the lawsuit to the court that had heard the dispute or any other court, there will be no additional charges.[7]

The relevant administrative section of the court shall determine the cost/fee which may be contested within 10 days from the date of such determination before the president of the court whose decision shall be final and non-appealable.[8]  The Executive Rules provide that the final evaluation of the fee shall be determined by the administrative section after the final conclusion of the lawsuit and the same shall be notified to the party obliged to pay. The amount shall not be collected except after the passing of the period of objection and issuance of decision thereto.[9]

Except for raising of reconsideration petition or cassation petition, non-payment of the fee shall not preclude or restrict the court to hear the lawsuit or other petition. For reconsideration and cassation petitions, the prescribed fee shall have to be paid within 30 days from the date of filing of the petition; else the petitioner shall forfeit the right and the judgment shall become final.

The Regulations provide that if a judgment is issued on the lawsuit and the judicial fee remains unpaid, the enforcement court judge shall handle the matter as per the provisions under the Enforcement Law.

Recovery of the Judicial Charges

The losing party shall bear the judicial cost/fee that was determined for the lawsuit and if the judgment did not include all that the plaintiff had claimed, the plaintiff would bear the judicial cost for that part.

The Law specifies cases of recovery of judicial costs, including:[10]

  1. If the judgment is in favour of the person who was required to pay the judicial fee.
  2.  If the judge’s recusal request is accepted, and the judge is recused.
  3. If a request for interpretation or correction of the judgment was accepted and interpretation or correction is rendered.
  4. If the judgment is reversed by the Court of Appeal; and
  5. If the claimant withdraws his case before holding the first session.

 

If the parties agree to compromise or settle their dispute amicably, they will bear the charges equally (unless they agree otherwise). Further, in case the parties settle the dispute amicably after the first hearing but before the issuance of the judgment, the judicial cost/fee shall be reduced to 25% of the original charge.[11]

Exemptions

The judicial costs shall be waived against (a) persons in prison due to lawsuits related to non-criminal financial claims (whether claims raised by or against them), (b) an appeal petition resulting in a judgment in favor of the appellant, (c) lawsuits settled amicably before the commencement of hearings, (d) lawsuits where arbitration judgments were endorsed, (e) lawsuits related to rights originating from employment contracts, and (f) lawsuits raised by governmental agencies.

However, if a judgment is issued in favor of the person exempted from the judicial cost, the party against whom the judgment was issued shall be obliged to pay the judicial fee.[12]

Comments

As the objectives explain, the move is aimed at restricting malicious and fictitious cases as well as enhancing judicial services. Further, parties will restrict their claims to actual rights as the claimed amounts shall attract court fees proportionately.

The Regulations also reiterate the importance of amicable settlement; as it is evident from the fact that there are provisions waiving the judicial fee in case the parties enter into compromise before the commencement of hearings and in case they settle their dispute amicably before the issuance of the first judgment, the fee shall be reduced to be 25% of the originally determined fee.

Al Ghazzawi & Partners

 

References

[1] Article 2 of the Law[2] Article 3 of the Law

[3] Article 2 of the executive rules/Article 3 of the Law

[4] Article 5 of the Law

[5] Article 6 of the Executive Rules

[6] Article 7 of the Executive Rules

[7] Article 10 of the Law

[8] Article 11 of the Law

[9] Article 8 of the Executive Rules

[10] Article 16 of the Law

[11] Article 15 of the Law

[12] Article 17 of the Regulations

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