Legal Business Environment in Saudi Arabia


Saudi Arabia, which is a sovereign nation in the Middle East, is the largest member of the Gulf Cooperation Council (Al-Rasheed 5). Just like any other sovereign nation, the country has its unique laws and permissible approaches that guide its legal system. This paper compares and contrasts the law and legal reasoning in Saudi Arabia with the situation for a non-Islamic nation, which will be the United States of America.

Saudi Arabia’s Law and Legal Reasoning

The country’s legal arrangement is entirely based on Islamic ruling. In this country, the fundamental structure of its legal arrangement considers the Sharia, which is celestial in nature, the foundation of legislation (Otto 42). While the Sharia law offers a comprehensive outlook of the country’s legal arrangement, many legislative laws have been established to guide criminal, administrative, and commercial areas, which must correspond with the King’s authority and development agendas (Beranek 33). Based on the Sharia Law of Saudi Arabia and in many other Islamic states that strictly adhere to the law, the King is the enforcer of the divine law. Hence, under the Islamic public policy, he has much authority and discretion over matters of communal concern (al-Siyasah al-Shar’iyyah). In terms of community demands, the al-Maslahah al-Mursalah is the Islamic administration that expansively handles matters of progress in the kingdom (Otto 31). Further, state regulations that do not contravene the Sharia Law are legitimate and enforceable. The application of al-Maslahah al-Mursalah is essential in the country since it guides the officially recognized decision-making processes on matters that are not expressly covered under Islamic law (Beranek 34). According to the fundamental structure, the dictatorial power is bestowed with establishing guidelines that are in tandem with the demands of the country, as well as eliminating those that do not uphold its standards based on the Sharia and rulings that relate to the committee of ministers and the counseling body.

The King of Saudi Arabia is the head of the country and the boss of the committee of ministers. He has a significant and autonomous rule-making function. Indeed, Saudi Arabia’s basic system bestows the ultimate authority to the King as far as the law and governmental influence in the state is concerned. The King has authority over other crucial aspects and functions of the country (Al-Rasheed 19). The King has the power to revoke, endorse, or revise any law or regulation as guided by the Fundamental Structure’s Majestic Order (Kuran 15). In addition, through the stately decree, the King has the power to endorse any intercontinental pacts, indulgences, unions, and policies. Further, the Kingdom’s legislative bodies, which comprise the committee of ministers and Shura commission, first review any laws and regulations in the country. However, the ruler has the free will to recognize or eliminate any suggestions by the two governmental organs (Otto 36).

The committee of ministers is a vital organ of Saudi Arabia’s legal system. The body is bestowed with both administrative and governmental functions. The committee of ministers handles lawmaking duties with the ruler and the Shura commission (Beranek 37). As heads of various departments, each boss has the capacity to suggest a draft ruling or directive concerning the department that the party handles. However, the approval of any proposal depends on gaining the support of 66% of the members who are present in the Council’s conferences. The approval by the committee of ministers concerning laws and regulations is not final until approved by the King.

On the other side, the legal system of the United States is in sharp contrast with that of Saudi Arabia. It is based on secular, as opposed to the divine law. In this case, American laws are primarily derived from the authority of people as enshrined in the American constitution (Dunham and Alpert 35; Feinman 3). Firstly, unlike Saudi Arabia, the United States is made of 50 states, which came together to form a centralized homeland. Each state has its laws, although the alliance also has other laws. This situation reveals the division of the American law system into centralized and state legal systems (Khadduri and Liebesny 28). Although the declaration of independence in America acknowledged the sovereignty of the states, this autonomy has become greatly reduced over the years to the extent of leading to a shift of power from the states to the centralized government. However, states still maintain considerable authority. Nevertheless, the federal government has the ultimate influence on many issues, both at the national and state levels (Khadduri and Liebesny 32). The constitution of the USA, through what is referred to as separation expressly guides the mandates of the federal government and state government as far as implementation and practice of law and related legal matters are concerned. The second most important aspect of the US legal system is the supremacy of federal law. In this case, federal law is the main authority and cannot be challenged by state law. However, federal law can overwrite state law (Dunham and Alpert 22).

Another crucial aspect of American law is the division of the government into branches, which work together to ensure successful practice and application of the law in America. These branches include the governmental, administrative, and judicial branches, which work together by putting each other on the check (Khadduri and Liebesny 29). The legislative branch, which can be equated to the counseling committee (Shura Council) in Saudi Arabia, refers to the American parliament that constitutes the House of Representatives and the governing body. Unlike the Shura Council where all members are presidential appointees, the people in the districts and state that they represent in the legislative body elect the council (members of the house) and senators. In the process of legislating laws, the first step involves the introduction of a bill to the parliament. The appropriate committees then review the bill where it can be amended or rejected (Khadduri and Liebesny 29). This process is very thorough since it also calls for public participation via hearings and investigations to prove its merits. If approved at the committee level, the bill is presented to the governing body where a majority decision is made on when the bill should be scheduled for consideration by members. Once the bill comes for reflection, a debate ensues where each member of the house who wishes to speak is given a short time while the number of the amendments is limited (Dunham and Alpert 43). However, at the governing body, peoples’ deliberation on bills is boundless while no boundaries are put on the adjustments that can be established. Upon the winding up of the deliberations, a choice of a plain preponderance decides the course of the bill. The president of the United States is the key authority over the declaration of a bill into a commandment. In this case, a bill must pass in both houses of congress for it to be considered by the president. The commander in chief has two options at this stage. The first option is accepting the bill as it is and signing it into law. The second option involves rejecting the bill through a sanction and sending it back to Congress for amendments or withdrawal (Khadduri and Liebesny 34). However, the parliament may supersede the presidential sanction and vote the bill into regulation through a two-thirds majority. This strategy is a significant difference between the US and Saudi Arabian legal structures where the verdict of the King is the ultimate decision that no one can veto or override.

The Classification and Branches of Law

In Saudi Arabia, the Sharia Law is the de-facto authority that is classified into seven categories and branches of law, which include the legitimate law, criminal regulation, people law, business and pact decree, employment regulation, property law, and energy ruling (Otto 14). The Sharia law is viewed as divine. Consequently, it touches on many areas of legal application. The areas that are not covered expressly by the Sharia law calls for legislation that is carried by the commission of ministers and the Shura congress where the King is the ultimate authority. He decides whether such laws and regulations become laws or not. Such laws and regulations cover modern issues such as academic assets and business law (Beranek 40). The basic law system offers the most comprehensive guide to the application of Sharia into the various classes of law as identified above.

The constitutional law comprises rulings that are contained in the Basic Law, which outlines the roles and responsibilities of institutions of authority and governance in the state. However, the Basic Law is not adequate to be declared a constitution because it refers to its mandate from the Qur’an and Sunna, which it considers the country’s constitution (Kuran 16). The interpretation of the constitution with reference to the Qur’an and Sunna is central to the application of various laws. Such elucidation is executed by the Ulema, which denotes Saudi’s spiritual developments.

The second classification of law is the criminal decree, which is also governed by Sharia. It comprises three categories, namely the hudud, Qisas, and Tazir. The hudud refers to the punishments that are fixed for specific crimes as guided by the Qur’an while the Qasis refers to eye-for-eye castigatory penalties (Beranek 44). On the other hand, Tazir refers to the general categories of crimes. Each of the above categories of crimes has its specified retribution, which may include beheading, life verdict, public lashing, disbursement of fines, and corrective punishment as dictated by the Sharia Law.

Family relates to cases of marriage, kids, separation, and birthright. However, these laws are not well codified in the basic system. They fall in the general categorization and jurisdiction of the Sharia courts (Otto 26). However, the application of family favors many people in this highly patriarchal society. For instance, while a man can dissociate his partner without the need for lawful validation, the wife has to seek permission from the man or magistrates if the man has injured her. However, the latter system, that is, the judicial divorce, is very difficult to succeed in the country’s legal system. The commercial and contract laws guide the management of the business and any related issues of contention. The Sharia guides these laws. In this category, the commercial jurisdiction is bestowed on the Committee of Grievances. Occasionally, special tribunals are used to overlap or avoid restrictive guidelines of the Sharia rulings (Kuran 15). The Sharia is a restricting factor for foreign investors who seek to enter Saudi Arabia. This situation reveals why exceptional committees are becoming common.

On the other hand, labor laws guide employment agreements and duties of parties to the employment concord. Above all, the labor law requires employers to grant their employees a 21-day paid holiday after a year’s employment and 30 days after 5 years of employment (Otto 53). Land law guides land and property ownership. However, much land is government-owned in the country. Arable areas and metropolitan assets are the only material goods, which people can possess (Otto 53). Recent changes in labor laws now give foreigners the ability to own land in the country. For a long time, this provision has not been possible.

Lastly, the energy law guides the management of enormous oil and natural gas resources that the country owns under the management of the government (Otto 54). The law guides the utilization, security, and development of these resources for the advantage of the state and its people. The above classifications of law in Saudi Arabia are not very elaborate. They draw their mandate from the Sharia Law in addition to regulations that are enacted by legislative authorities (Johnson and Sergie par.2).

Comparing these classifications of law in Saudi Arabia to those of the US legal system reveals various similarities. The US laws are divided into substantive decree vs. bureaucratic decree, ordinary law vs. constitutional law, and criminal law vs. national law (Khadduri and Liebesny 64). These categorizations of law determine how the laws are applied to determine various issues in the country. However, unlike the US laws, which have a clear division as identified in the constitution, the lack of an elaborate constitution in Saudi Arabia makes it difficult to highlight all the aspects of each classification where the interpretation depends on the Sharia-trained judges and Ulema. The interpretation of the US laws is bestowed on an elaborate judicial and court system as guided by the constitution of the United States (Khadduri and Liebesny 66).

Court Procedures and Alternative Dispute Resolution

The application of the Sharia Law in Saudi Arabia is bestowed upon the Sharia Court System, which is the basic legal structure in the country. Judges and lawyers in the country’s judicial arrangement are also members of the Ulema (Otto 58). The court system is divided into three categories, which comprise the Courts of the First Instance (Summary and General Courts), Courts of Cassation, and the Supreme Judicial Council.

The court of First Occurrence is the lowest in the hierarchy. It marks the beginning of the court proceedings in the Saudi Arabian court system. Under the First Occurrence Courts, Synopsis courts handle minor cases under the hudud and taz’ir. On the other hand, the universal courts handle Qisas crimes and related offenses. The committee of grievances represents a different and alternative dispute resolution authority where cases involving inhabitants vs. government are heard (Beranek 44). Such cases can relate to retirement funds and health covers. Once a determination is made through a court decision via a judge, the claimant, and the accused parties are required to sign the court decision if they concur with it. If they do not consent to the decision, they are directed to file a petition within 30 days (Al-Rasheed 25). Once the plea is filed, it is taken to the Courts of Appeals or Courts of Cassation. The latter organ is charged with reviewing the petition of the claimant, the accused, or by the public prosecutor. The court is also mandated with reviewing sentences of First Instance Courts concerning crimes that are punishable by death. The review does not involve hearing unless the accused or the victims are called upon to appear before the court to give testimony. Lastly, the extreme trial committee is the highest authority in the current Saudi Arabian court structure (Kuran 11). It comprises eleven individuals. Courts in this category are mandated with the supervision of other courts and the administration of job-related matters in the judiciary. Its judicial mandate entails reviewing judgments that involve death sentences and other major crimes.

Serving the sentence by the guilty party or the releasing of the innocent person forms the last stage of the court procedure. If the accused agrees to the decision of the lower court and/or is found guilty, he or she will be taken to prison to serve the sentence. On the other hand, if he or she files a petition, he or she may be released temporarily through kafala. However, once a verdict of guilty is passed, he or she will be arrested by the police and consequently taken to prison to serve the sentence (Beranek 38). Other forms of punishment may include compensation of debts or the reimbursement for ethical and material harm.

On the other hand, an acquittal or release means that the accused is not found guilty. In this case, he or she is released temporarily as he or she awaits the closure of the case. If the accused is acquitted but detained, he or she has the right to file for compensation as guided by Article 210 of the law of criminal practice (Kuran 21). Once an individual completes the jail term, he or she must be released. Otherwise, he or she is allowed to file for compensation as per Article 217 of the decree of the criminal system.

The court procedures in Saudi Arabia are different from the court procedures in the US, although the former court processes have the provision of appeal. Just like the Saudi Arabian situation, appeals from lower courts (constituency courts) in the USA are heard in courts of appeal that are equivalent to courts of cassation in Saudi Arabia (Dunham and Alpert 16). However, the primary difference is evident in the US petition court where the plaintiff and the accused parties are required to appear and give testimonies concerning the case. This procedure is not the case in Saudi Arabia. The Supreme Court is the uppermost organ in the American legal structure. Applications from the court of appeal are heard in this case. Besides, hearings on major issues concerning the constitution and/or public interest are tabled at this stage (Khadduri and Liebesny 27).


The Islamic Law Sources

Conclusively, it is crucial to compare Saudi Arabia and the US in terms of their sources of law. The first source of law in Saudi Arabia is the Qur’an, which is the sacred book that contains God’s ordinances that were revealed to Prophet Muhammad. The Qur’an is the ultimate source of law. The book is viewed as the celestial law from God. Nationals in the country must adhere to its laws. The experiences and examples that were advanced by Prophet Muhammad form the second source of law (Otto 59). These teachings are referred to as “the Sunnah”. They not only expound on issues in the Qur’an but also address other matters that are not addressed in the Qur’an. Consensus and opinions concerning the existing rulings that are based on the Qur’an and the Sunnah are also viewed as sources of law, which can be used to review the current and future issues that touch on the interpretation of the law. These opinions and consensuses are referred to as the ijtihad (Beranek 47). The other source of law in Saudi Arabia is quiyas, which refers to the emerging liberal schools that deal with any upcoming legal issues that are not addressed by existing sources of law. However, regardless of the source of law, the foundation must be in conformity with the teachings of the Qur’an.

The sources of law in Saudi Arabia are in sharp contrast with those of the USA where religion is not the basis for the law. The primary sources of law in the USA include the constitution, statutes, case laws, and administrative laws, which indicate the deliberations and decisions of the majority on what laws entail (Khadduri and Liebesny 49). However, in the recent past, the emergence of jurisprudence schools has resulted in new legal challenges. Hence, the need to address the emerging issues in modern times indicates a move towards the inclusion of people’s opinions, as opposed to entire dependence on the Qur’an as it is witnessed in Saudi Arabia.

Works Cited

Al-Rasheed, Madawi. A history of Saudi Arabia, Cambridge, England: Cambridge University Press, 2010. Print.

Beranek, Ondrej. “Divided we survive: A landscape of fragmentation in Saudi Arabia.” Crown Center for Middle East Studies (Brandeis University) 1.1(2009): 33-48. Print.

Dunham, Roger, and Geoffrey Alpert. Critical issues in policing: Contemporary readings, Long Grove, IL: Waveland Press, 2015. Print.

Feinman, Jay. Law 101, Oxford: Oxford University Press, 2014. Print.

Johnson, Toni, and Mohammad Sergie. Islam: governing under Sharia, 2014. Web.

Khadduri, Majid, and Herbert Liebesny. Origin and Development of Islamic Law, New Jersey, NJ: The Lawbook Exchange, Ltd., 2008. Print.

Kuran, Timur. The long divergence: How Islamic law held back the Middle East, New Jersey, NJ: Princeton University Press, 2012. Print.

Otto, Michiel. Sharia Incorporated: A comparative overview of the legal systems of twelve Muslim countries in past and present, Netherlands: Leiden University Press, 2010. Print.