CC gets it together in Saudi Arabia

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  • You are missing the point.
    The professional services company allows non-Saudi and non-GCC law firms to have a formal legal presence in Saudi Arabia, something which has been denied to them in the past. This effectively removes all of the power that used to reside in the Saudi partner who was invariably the sponsor of the foreign lawyers, the lessee of the office and the guardian of the bank account. Now if a Saudi partner throws a fit, the foreign entity just has to find another Saudi to take his place and if you share the 25% Saudi shareholding among 2 or 3 Saudis, then even if 1 leaves, you still have the other 2. This will lead to far greater stability.
    This is an exciting development and it will be interesting to see how the other Saudi partners of foreign law firms react to suggestions that they form a professional services company. I expect that "not likely" will be the most facoured response.

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  • There is one very very important and ‘’missing’’ point here. The type of liability in such legal entity is a joint one rather than Limited Liability Company as most UK and US law firms.

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  • Not correct. There is no such thing as joint and several liability or vicarious liability under Saudi law. Saudi law is strictly fault-based, in accordance with the Islamic shari'a.

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  • This is more about tax and other issues. Nothing is going to change. The non-Saudi firm will make the entire investment. The Saudi will benefit for doing nothing. This is how it is with the engineers and the accountants. On the contrary, Al-Jadaaan is NOT a litigator. Yes, this is effectively a break up of the Al Jadaan Law Firm. Al Jadaan is doing much better on his own. The other Saudis have more to gain. Al Tamimi Law Firm already has this model. Will CC have a license from the Ministry of Justice?

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  • Article 22 of the Professional Partnership Law: "Partners are jointly liable towards third parties for the debts of the partnership."
    The Companies Regulation is replete with articles imposing joint liability on partners or shareholders regardless of fault. To wit:
    Article 16: "A General Partnership is a company composed of two or more shareholders who are jointly liable in all of their assets for the debts of the company."
    Article 19: "A new partner that joins [a general partnership] becomes liable for all of the company's past and future debts and any agreement to the contrary amongst the partners shall not be effective against third parties."
    Article 180: "If the losses of a [limited liability] company equal or exceed three quarters of its capital, the managers must call the partners to a meeting within thirty days to resolve to continue the company and assume its debts or to dissolve the company ... and if the company continues without such a resolution ... the partners shall be jointly liable for the company's debts".

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  • ''Anonymous | 13-Mar-2013 12:50 pm''
    You are either a foreign lawyer who obviously does not speak Arabic or a incompetent Saudi lawyer! It is stated that the professional Saudi company and classified as a joint liability one.
    You need to understand that you only refer to sharia law if there is no written law, otherwise written law is prevailed. It is sad when we see some non-Saudis who are trying to interpret the law and give bad wrong advice.

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  • I live that CC has no qualms about opening an office in the country with the worst human rights record in the entire Middle East and one of the worst in the world. Will female CC lawyers be able to work in this office? Will they need a chaperone? They won't be allowed to drive to work...

    But then again, it's expected. CC made a big show of getting appointed to the Libyan SWF panel, as did A & O - and that went so well.

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