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
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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.”

 


Ancient Saudi city of Qurh a historic stop for pilgrim and trade caravans

Updated 29 May 2025
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Ancient Saudi city of Qurh a historic stop for pilgrim and trade caravans

  • Qurh was capital of Wadi Al-Qura, a center for Arab markets
  • Architectural features date back to the early Islamic periods

ALULA: Qurh, an ancient city in Saudi Arabia’s AlUla governorate, served for centuries as a vital hub for pilgrims and traders, according to the Saudi Press Agency.

Located about 20 km south of AlUla’s old town, near the village of Mughayra, Qurh is one of the Royal Commission for AlUla’s archaeological sites. AlUla’s other main heritage sites are Dadan, Hegra and the Old Town.

Qurh’s ruins spread across an expansive plain surrounded by medium-height mountains. The ruins include remnants of architectural structures, marketplaces, streets, and palaces, all of which highlight the city’s once-thriving economic and urban life.

Architectural features dating back to the early Islamic periods also suggest that settlement and cultural growth continued after the advent of Islam.

The ruins include remnants of architectural structures, marketplaces, streets, and palaces, all of which highlight the city's once-thriving economic and urban life.  (SPA)

Qurh was the capital of Wadi Al-Qura and a center for Arab markets, as described by the historian Hisham bin Al-Kalbi, who identified it as a commercial and cultural center and a cradle of the arts.

The city was located on the route of the historic Incense Road, a trade artery used to transport precious goods from the southern Arabian Peninsula to the north, passing through Wadi Al-Qura.

The ruins include remnants of architectural structures, marketplaces, streets, and palaces, all of which highlight the city's once-thriving economic and urban life.  (SPA)

According to Abdulrahman Alsuhaibani, the RCA’s vice president for culture, the excavations in Qurh have so far proved “that there was some interaction with China at the beginning of the Islamic period.”

“Evidence exists of interactions and trade extending as far as China,” he said in an interview produced by FT Longitude in partnership with the RCA.

“With China, for example, (there were) merchants who brought porcelain, medicines and silk to Arabia with incense for sure, ivory, while other valuables travelled in the opposite directions.”

AlUla, part of Saudi Arabia’s western province of Madinah, has been home to the ancient Dadanites, Lihyanites, Nabataeans, Sabaeans, Minoans, Egyptian, Romans and Arabs, he said.


Saudi defense minister holds talks with UK security, defense officials

Updated 29 May 2025
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Saudi defense minister holds talks with UK security, defense officials

  • Prince Khalid bin Salman and UK National Security Advisor Jonathan Powell discussed strategic partnership between the two countries

LONDON: Saudi Arabia’s Defense Minister Prince Khalid bin Salman held talks with the UK’s National Security Advisor Jonathan Powell in London on Wednesday.

The two sides “reviewed the strong friendship and strategic partnership between Saudi Arabia and the UK,” the Saudi Press Agency reported. “They also reviewed areas of cooperation and discussed regional and global developments, as well as ongoing efforts to support security and stability.”

The talks followed a meeting on Tuesday between Prince Khalid and British Defense Secretary John Healey during which they discussed strategic defense cooperation.


Saudi Embassy coordinating with Turkiye to find boy who fell into a creek

Updated 28 May 2025
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Saudi Embassy coordinating with Turkiye to find boy who fell into a creek

  • The embassy coordinated with child’s family after he reportedly went missing in a river in Trabzon province
  • Turkish authorities are investigating the incident

ANKARA: The Saudi Arabian Embassy in Turkiye confirmed on Wednesday that it is coordinating with Turkish authorities to search for a Saudi child who reportedly fell into Haldizen Creek in Uzungol region.

According to the Saudi Press Agency, the embassy issued a statement clarifying the reports circulating in media outlets and across social media platforms regarding the incident in Trabzon province.

“From the first moments of the incident, the embassy coordinated with the child’s family and contacted the relevant Turkish authorities to investigate the incident,” the statement said.

“The authorities have responded and are gratefully conducting extensive searches in the area and its surrounding to locate the child. We ask God Almighty to crown these efforts with success and to protect everyone from all harm,” it added.


Founding nations sign Global Water Organization charter in Riyadh

Updated 29 May 2025
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Founding nations sign Global Water Organization charter in Riyadh

  • Ceremony was attended by Saudi FM Prince Faisal bin Farhan, who highlighted the importance of the GWO in tackling water issues worldwide
  • Prince Faisal said that Saudi Arabia would provide financial and logistical support to the GWO for the next five years

The Global Water Organization launched operations from its headquarters in Riyadh on Wednesday, with founding member states signing its charter.

The event was attended by officials and diplomats, including Saudi Arabia’s Foreign Affairs Minister Prince Faisal bin Farhan; Environment, Water and Agriculture Minister Abdulrahman Al-Fadhli; and Greek Ambassador Alexis Konstantopoulos.

Prince Faisal highlighted the importance of the GWO in tackling water issues worldwide holistically.

“The establishment of this organization reaffirms the Kingdom’s commitment and keenness to international cooperation in all fields, including the water sector,” said the minister.

He added: “This organization is considered a practical, comprehensive, and multilateral platform aimed at promoting dialogue among countries, unifying efforts, enhancing coordination and cooperation to face the growing challenges related to water.”

“It also aims to enable partnerships and find innovative solutions, contributing to building a prosperous future for all nations.”

Prince Faisal said the Kingdom views water issues as a humanitarian and development priority, recognizing the importance of this vital resource to the stability and growth of societies.

“The Kingdom continues to support an approach based on international cooperation, knowledge exchange, and sustainable solutions that contribute to the efficient management of important natural resources.”

Other officials also shared their thoughts on the importance of securing water sources and the development of the sector.

Al-Fadhli said: “Water is a basic necessity for life in general and is essential for all economic development in this world, whether for agriculture, industry, mining, tourism, or entertainment. Competition for this vital resource is increasing.”

He continued: “The challenges facing the world in general, and no one is exempt from them at the present time, can be summarized as follows: the scarcity of water resources, quality as well, and the pollution it (water resources) have been exposed to as a result of human activities in recent years, and also the high cost of these projects.”

Al-Fadhli said there was an urgent need to rethink engineering, in general, and consider the “engineering value” of these projects, along with encouraging development in water-related efforts.

“I must encourage research, innovation, and development, and always ask how we can complete these projects at a lower cost while maintaining quality.”

He emphasized the importance of having an integrated system that covers all stages of the water cycle.

This includes adopting innovative economic models based on cost-benefit analysis, introducing new financing mechanisms, reducing reliance on government subsidies, and actively involving the private sector.

The GWO’s charter was signed by representatives from the founding countries: Saudi Arabia, Kuwait, Qatar, Spain, Senegal, Pakistan, Greece and Mauritania.


Saudi FM receives US envoy to Syria in Riyadh

Updated 28 May 2025
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Saudi FM receives US envoy to Syria in Riyadh

Saudi Arabia’s Foreign Minister Prince Faisal bin Farhan received US envoy to the Syrian Arab Republic Thomas Barrack in Riyadh on Wednesday.

During the meeting, they discussed steps to provide economic, humanitarian and other support to the Syrian people, the Saudi Foreign Ministry said in a post on X.

Meanwhile, Saudi Arabia’s Deputy Minister of Foreign Affairs Waleed Elkhereiji received Ambassador of Italy to the Kingdom Carlo Balducci in Riyadh on Wednesday.

They discussed bilateral relations and other topics of common interest.