⚠️ Critical Procedural Alert for Litigants and Legal Advisors
A widespread misunderstanding traps many claimants in Saudi Arabia: assuming that Commercial Courts only hear cases between registered businesses or corporations (merchant vs. merchant). Guided by this misconception, individual claimants often initiate lawsuits in the General Court (المحكمة العامة), only to face a crushing dismissal months later for lack of subject-matter jurisdiction (صرف النظر لعدم الاختصاص النوعي) because jurisdiction legally belonged to the Commercial Court all along!
The Statutory Benchmark: Article 16 of the Saudi Commercial Courts Law
Article Sixteen (16) of the Saudi Commercial Courts Law explicitly defines the matters under the jurisdiction of the Commercial Court:
- Disputes arising between merchants due to their original or incidental commercial transactions.
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Lawsuits filed against a merchant in commercial contract disputes, provided that the original claim value exceeds One Hundred Thousand Saudi Riyals (SAR 100,000), with authority granted to the Council to increase this threshold if necessary.
📌 Strategic Takeaway: An ordinary individual (non-merchant) is required to sue a merchant in Commercial Court when the contract dispute exceeds this threshold!
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Disputes among partners in partnership agreements:
⚖️ Legislative Amendment by Royal Decree No. (M/191) dated 29/11/1444 AH:
Amended to state: "Disputes arising from partnership contracts stipulated in the Civil Transactions Law" (encompassing Mudaraba and informal joint ventures between individuals without commercial registrations).
- Lawsuits and violations arising from the application of the Companies Law.
- Lawsuits and violations arising from the application of the Bankruptcy Law.
- Lawsuits and violations arising from Intellectual Property Laws (Trademarks, Patents, Copyrights).
- Lawsuits and violations arising from other commercial statutes (Commercial Agency, Competition, Anti-Concealment).
- Lawsuits and applications concerning court-appointed receivers, trustees, liquidators, and designated experts when related to a claim under the court's jurisdiction.
- Compensation claims for damages arising from a lawsuit previously adjudicated by the Commercial Court.
Why Do Litigants Stumble into "Lack of Subject-Matter Jurisdiction"?
Plaintiffs frequently confuse party classification (individual vs company) with the underlying legal subject of the dispute:
- Individual Claims Against Merchants (Clause 2): If a consumer or non-merchant purchases industrial equipment or goods from a company and sustains SAR 150,000 in damages, the claim must be filed in Commercial Court, not General Court.
- Mudaraba & Joint Venture Partnerships (Clause 3): When capital is entrusted by one individual to another to invest in commercial commodities or real estate development on a profit-sharing basis, disputes fall squarely under Commercial Court jurisdiction even if neither party possesses a Commercial Registration.
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Strategic Advice from Saleh Law Firm
Commercial Litigation & Corporate Counsel | Riyadh, Saudi Arabia
Determining subject-matter and territorial jurisdiction prior to lodging pleadings on the "Najiz" portal is not a mere formality—it is your first line of defense against judicial costs and wasted months. We strongly advise performing a pre-filing jurisdictional analysis aligned with Article 16 and the Civil Transactions Law.
Disclaimer: This article is published for informational and educational purposes only and does not constitute formal legal advice. Please consult our full
disclaimer.
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Attorney Saleh Mohammed Al-Mohamadi
Licensed Commercial Litigator & Corporate Consultant — MOJ License: 37496
Published: September 4, 2026 | Riyadh, Kingdom of Saudi Arabia