Saudi Arabia plans judicial overhaul to smoothen way for investors

Codifying unpredictable system could help draw investment

Saudi officials are working to overhaul the country’s unpredictable judicial system by the end of this year, partly to encourage investors long deterred by the perceived arbitrariness of the kingdom’s courts.
 
Authorities are working to codify a system that has historically granted judges wide discretion to issue rulings based on individual interpretations of Islamic law. This discretionary arrangement has created risk for both Saudi and international investors because it can lead to conflicting rulings from different judges even in similar cases.
 
While legislation will still be rooted in Islamic law, the codification “will contribute to the predictability of rulings” and “limit individualism in issuing verdicts,” Crown Prince Mohammed bin Sal­man, also known as MBS, said in a statement published late Monday by the official Saudi Press Agency. Some of the changes will aid women in particular, he added.

 
“This could be quite significant,” said Kristin Diwan, a senior resident scholar at the Arab Gulf States Institute in Washington. “This lack of predictability is a real problem as MBS looks to attract more foreign investment and to lure more foreign businesses and tourists to the kingdom.”
 
Authorities are preparing four new regulations to govern civil transactions, criminal law, rules of evidence and “personal status” or family law, the prince said. The news is the latest in a series of dramatic economic and social reforms launched by the 35-year-old crown prince aimed at modernising the kingdom. It fits into his Vision 2030 agenda which aims to diversify the economy away from oil and attract foreign talent and investment to the kingdom, and comes as Saudi Arabia pitches itself as a destination for international business headquarters.