Overdue business rents waived by Saudi court

Overdue business rents waived by Saudi court
If a contract obliges one of the parties to carry out a task, which cannot be completed on time due to the pandemic, the court can temporarily suspend the implementation of the obligation. (SPA)
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Updated 19 January 2021

Overdue business rents waived by Saudi court

Overdue business rents waived by Saudi court
  • The new regulations cover construction contracts, supply contracts, and the like, which have been affected by the pandemic

RIYADH: The General Assembly of the Saudi Supreme Court has ordered the waiving of overdue rents on businesses hit by the coronavirus disease (COVID-19) pandemic, and called for a review of such contracts between tenants and owners.

The steps have been taken in view of the circumstances caused by the pandemic, wherein an obligation or contract cannot be implemented without unusual losses.

The president of the Supreme Court, Khalid bin Abdullah bin Muhammad Al-Luhaidan, approved the decisions backed by 32 members of the assembly, Okaz newspaper reported.

Authorities have set conditions that have to be met before a case can be considered for review under the new regulations.

If a contract was concluded before the commencement of the preventive measures announced in the wake of the pandemic, then the impact was direct and unavoidable. If in such a case, an affected party was not compensated or did not reach a deal to mitigate the impact of the health crisis, then it qualifies for a review and the new regulations will then take effect, said legal sources.

The Supreme Court said a competent court will issue its verdict based on facts and circumstantial evidence, and may order amendments to a contract.

It also said the new provisions will be applicable to tenancy contracts and movable properties affected by the pandemic.

It clarified that if, due to the pandemic, a tenant was unable to use the leased property, in whole or in part, the court would reduce the rent as much as the usually intended benefit was reduced.

A lessor, meanwhile, does not have the right to terminate the contract if a tenant is late in paying rent for the period during which it was impossible to fully or partly use the property due to the pandemic.

HIGHLIGHT

The Supreme Court said a competent court will issue its verdict based on facts and circumstantial evidence, and may order amendments to a contract.

The new regulations also cover construction contracts, supply contracts, and the like, which have been affected by the pandemic.

If the pandemic causes an increase to the cost of materials and labor wages, etc., the court shall increase the value of the contract while ensuring the obligor can afford to bear the expense. The obligee, upon increasing the obligation, has the right to request the termination of the contract. If the increase in the cost of materials is temporary, the court reserves the right to temporarily suspend the contract.

If the pandemic causes a shortage of material in the market, the court can reduce the quantity to the extent it deems sufficient to protect the obligor from harm.

Moreover, if the shortage of materials is temporary, the court can temporarily suspend the contract if the person obligated to it is not severely affected by this suspension. If he is harmed, he may request termination of the contract. If the materials were not available at all, leading to the impossibility of implementing the contractual obligations or some of them, the court will terminate the clauses that are impossible to implement upon the request of one of the parties to the contract.

If a contract obliges one of the parties to carry out a task, which cannot be completed on time due to the pandemic, the court can temporarily suspend the implementation of the obligation. If the other party fears unusual damage due to the suspension, he may request termination of the contract.

In addition, the court also stressed the need to carefully assess the damages on a case-to-case basis, and that one or more experts should do the assessment. While assessing damages, it should be made clear what losses were incurred directly due to the pandemic and had nothing do to with seasonal upswing in certain activities.

The Supreme Court explained that a court is bound, when considering cases arising from contracts and obligations affected by the pandemic, not to apply penalty clause or fines in whole or in part — depending on the case.

In the event that a contract includes a clause of exemption from liability for one of the contracting parties when an emergency or force majeure occurs, the condition has no effect, and the party that breaches the obligation must provide evidence that the pandemic was the reason for the breach.

The affected contracts that are not covered by the provisions of this principle shall be subject to the legal and statutory litigation principles, said the court.

Commenting on the decision, Talal Albotty, the regional director of the Central Region, Salama Insurance Co., said there is a type of insurance called “suspension of operations” because of continuous epidemics, and falls under property insurance.

“This type of insurance can be found in European countries and some Asian countries but it is not applicable in Saudi Arabia,” he told Arab News. “The insurance against projects does not exist because when the project stops, insurance stops.”

Regarding the rise in prices of commodities, or the increase in prices because of pandemics and suspension of imports, a condition must be added stating that the value of property or project must increase by 10-25 percent, he added.

“Now most reinsurance companies around the world stopped offering insurance related to pandemics and contagious diseases in most countries, including COVID-19, because their impact was huge and the companies sustained huge losses,” he said.

Saudi lawyer Reem Alajmi said the resolution aims to treat and remedy the losses incurred by parties to the contract in terms of obligations.

“The parties could not fulfil their obligations because of a lack of sufficient resources or suspension of working hours during the pandemic. Fulfilling the obligation fully or partially was difficult because COVID-19 pandemic was a force majeure,” she told Arab News.

According to Alajmi, the effects or damage caused by the pandemic must not be covered by other laws. “Proving the occurrence of damage is the responsibility of the plaintiff and the defendant based on evidence submitted to the court,” she added. “The contracts and obligations are amended accordingly.”

 


WATCH: Saudi Crown Prince attends Formula E Diriyah E-Prix

 Saudi Arabia's Crown Prince Mohammed bin Salman was in attendance for the second race of the Formula E Diriyah E-Prix weekend in Riyadh on Saturday. (SPA)
Saudi Arabia's Crown Prince Mohammed bin Salman was in attendance for the second race of the Formula E Diriyah E-Prix weekend in Riyadh on Saturday. (SPA)
Updated 2 min 34 sec ago

WATCH: Saudi Crown Prince attends Formula E Diriyah E-Prix

 Saudi Arabia's Crown Prince Mohammed bin Salman was in attendance for the second race of the Formula E Diriyah E-Prix weekend in Riyadh on Saturday. (SPA)
  • Crown prince received good wishes as he arrived following successful operation

LONDON: Saudi Arabia's Crown Prince Mohammed bin Salman was in attendance for the second race of the Formula E Diriyah E-Prix weekend in Riyadh on Saturday.

The crown prince received good wishes from those in attendance as he arrived, following his successful operation earlier this week.

UNESCO World Heritage site Diriyah is host of the opening round of the FIA Formula E world championship this weekend.

In an electric opening race on Friday night, Mercedes-EQ driver Nyck de Vries claimed a maiden Formula E victory.

British driver Sam Bird in the Jaguar Racing car claimed victory in the second race of the weekend.


Arab region voices support for Saudi Arabia over US Khashoggi report

Arab region voices support for Saudi Arabia over US Khashoggi report
Updated 27 February 2021

Arab region voices support for Saudi Arabia over US Khashoggi report

Arab region voices support for Saudi Arabia over US Khashoggi report
  • The Secretary-General of the OIC said it rejects “the incorrect conclusions contained” in the US report
  • Arab Parliament stresses pivotal role that the Kingdom plays in consolidating security in the Arab region

LONDON: Arab countries and organizations expressed their support on Saturday for a statement released by Saudi Arabia’s Foreign Ministry. The statement concerned the report provided to the US Congress on the murder of journalist Jamal Khashoggi.
In a statement, Bahrain’s Foreign Ministry rejected anything that affects the sovereignty of Saudi Arabia.
Bahrain’s Shoura Council affirmed “the prominent and pivotal role played by Saudi Arabia, under the leadership of King Salman and Crown Prince Mohammed bin Salman, to lay down the foundations of regional and global security and peace.”
The council also praised diplomatic efforts exerted by Saudi Arabia through its foreign diplomacy in the region and the world, Bahrain News Agency (BNA) reported.

The UAE’s Ministry of Foreign Affairs and International Cooperation expressed its confidence in and support for the Saudi judiciary, as well as the Kingdom’s commitment to enforcing the law with transparency and integrity and to holding those responsible for the murder to account.

The Ministry affirmed the UAE’s solidarity with Saudi Arabia in its efforts to maintain stability and security in the region and the key role it plays in maintaining moderation in the Arab world.

The UAE rejects any attempts to exploit the Jamal Khashoggi case or interfere in Saudi internal affairs, the ministry said.

Kuwait’s foreign ministry expressed its support for Saudi Arabia’s statement and stressed the important role played by the Kingdom in supporting moderation regionally and internationally and in denouncing extremism.

The ministry said that it categorically rejects any attempts to affect the Kingdom’s sovereignty.

 

Oman’s Ministry of Foreign Affairs also expressed the Sultanate's solidarity with the Kingdom, saying it appreciated the efforts and actions of the competent judicial authorities in the Kingdom regarding the case and its outcome.

The Muslim World League (MWL) also affirmed its full support for Saudi Arabia’s statement.

MWL secretary-general Dr. Mohammed bin Abdul Karim Al-Issa said the league rejects the conclusions of the report and affirmed the confidence of the Muslim world, led by Saudi Arabia, in all measures taken by the Kingdom.

Al-Issa added that the league rejects any interference that affects the Kingdom’s sovereignty. 

The Secretary-General of the Organization of Islamic Cooperation (OIC) said it categorically rejects “the incorrect conclusions contained” in the US report which is “devoid of any conclusive evidence.”

The organization rejected attempts to infringe the Kingdom’s sovereignty, insult its leadership and compromise the independence of its judiciary.

It expressed support for all judicial measures that were taken against the perpetrators of the murder who were brought to justice, and the sentences that were issued.

The Arab Parliament affirmed its support for the Saudi statement and expressed its categorical rejection of any infringement of the sovereignty of the Kingdom and the independence of its judiciary.

The parliament stressed the pivotal role that the Kingdom plays in consolidating security and stability in the Arab region and the Middle East and its policy of supporting international peace.

The Secretary-General of the Gulf Cooperation Council (GCC), Dr. Nayef Falah Mubarak Al-Hajjraf, affirmed his appreciation for the pivotal role the Kingdom plays in enhancing regional and international security and peace, and its great role in combating terrorism and supporting the efforts of the international community in this regard.

Al-Hajjraf said the report is nothing more than an opinion that is devoid of any conclusive evidence. He expressed his support for any measures that the Kingdom takes in order to preserve its rights and support its role in promoting a culture of moderation.

Yemen also rejected everything that might affect the sovereignty of the Kingdom and the independence of its judiciary.

 


Saudi Arabia announces 5 more COVID-19 deaths

Saudi Arabia announces 5 more COVID-19 deaths
Updated 27 February 2021

Saudi Arabia announces 5 more COVID-19 deaths

Saudi Arabia announces 5 more COVID-19 deaths
  • The total number of recoveries in the Kingdom has increased to 368,011
  • A total of 6,488 people have succumbed to the virus in the Kingdom so far

LONDON: Saudi Arabia announced five deaths from COVID-19 and 338 new infections on Saturday.
Of the new cases, 179 were recorded in Riyadh, 70 in the Eastern Province, 42 in Makkah, 10 in Asir, seven in Madinah, three in Hail, three in Jazan and two in Najran.
The total number of recoveries in the Kingdom increased to 368,011 after 320 more patients recovered from the virus.
A total of 6,488 people have succumbed to the virus in the Kingdom so far.


Arab coalition intercepts Houthi drones, ballistic missile attack targeting Saudi Arabia

Arab coalition intercepts Houthi drones, ballistic missile attack targeting Saudi Arabia
Updated 18 min 17 sec ago

Arab coalition intercepts Houthi drones, ballistic missile attack targeting Saudi Arabia

Arab coalition intercepts Houthi drones, ballistic missile attack targeting Saudi Arabia

LONDON: The Arab coalition intercepted and destroyed a Houthi drone targeting civilian areas in the Kingdom's southwestern city Khamis Mushait and another targeting Jazan on Saturday.

The coalition also intercepted a ballistic missile attack targeting the capital Riyadh.

Arab coalition spokesman Col. Turki Al-Maliki said that the Houthi militia’s attempts to attack civilians and civilian areas constituted a war crime.

Al-Maliki added that the coalition takes necessary operational measures to protect civilians in accordance with international humanitarian law.

The attempted attacks came a day after the Arab coalition intercepted and destroyed two Houthi drones and a ballistic missile targeting the Kingdom on Friday.


Blinken stresses US will continue to defend, do business with Saudi Arabia

Blinken stresses US will continue to defend, do business with Saudi Arabia
Updated 27 February 2021

Blinken stresses US will continue to defend, do business with Saudi Arabia

Blinken stresses US will continue to defend, do business with Saudi Arabia

DUBAI: The US Secretary of State, Anthony Blinken, said Washington’s relationship with Saudi Arabia was important and that the relationship reflected shared interests and values between the two countries.
“The relationship with Saudi Arabia is an important one. We have significant ongoing interests. We remain committed to the defense of the Kingdom,” Blinken said during a press conference at the US State Department, as reported by CNN on Saturday.
The secretary of state also reiterated the United States’ interests to continue doing business with the Kingdom, stating that the relationship was “bigger than any one individual.”
Blinken also affirmed that US officials, including himself and President Joe Biden, had spoken with their Saudi counterparts.
Meanwhile, Pentagon press secretary John Kirby said on Friday that Saudi Arabia remained “a strategic partner in the region.”
“From a military perspective, as I've said many times, we take seriously our security commitments to Saudi Arabia with respect to their ability to defend themselves, and they do need to defend themselves, particularly along that southern border.”