SCA 1655/2019
This case involved the rights of some heirs to be partners in a company as they claimed they had inherited the right from their father. Issues included whether the court had jurisdiction as there had already been an arbitration ruling and the impact of the invalidity of the company's establishment contract.
Background
Claimants filed a case against defendants before the court. They requested the court to validate their right to be partners in a disputed company. The said that they had inherited their share in the company from their father.
The defendant said that the court could not consider the case due to the existence of an arbitration ruling.
Decision
The court said that Article 159 of Saudi Arabia Cabinet Decision No. 30/1437 stipulated that a limited company which was established in violation to Articles 153, 154, 156 and 157 of Saudi Arabia Cabinet Decision No. 30/1437 should be considered invalid. The court said that the case documents revealed that the company's establishment contract was invalid.
The court ruled that the contract was invalid.
The defendants appealed the ruling before the court of appeal. They said that the case had been previously settled through an arbitration ruling.