Conflict of law remains one of the most interesting issues that globalization faces. Perhaps the French legal system has been aware of it a long time ago. Under the French Civil Code, any French citizen or company can go to the French court to file an appeal against adverse foreign court ruling. Surely, Thinet International is taking advantage of it as a French construction company.
Thinet and Sabic, the world’s largest petrochemicals company, which the Saudi government has a 70% stake in, entered into a construction contract with the forum of arbitration in Saudi court. Thinet did not complete the building on time and Sabic withheld the last payment, though it was able to move into the building. The Saudi court under commercial law ruled in favor of Thinet and Sabic appealed. On appeal, the Saudi court held that the Thinet’s complaint should have been judged under civil (Sharia) instead of commercial law. Thinet believed that Sharia law does not provide for adequate remedy for the complaint and so it turned to the French court. For example, Sharia law does not provide for penalties and most incidental and consequential damages as recognized in general contract law. The World Bank once estimated that in Saudi Arabia there are 44 procedures to go through for commercial disputes and it takes an average of 360 days, compare to 10 procedures and 250 days in the US.
What makes me curious about this case are two fold: (1) the reliability of the Saudi commercial court and (2) whether Sharia law is in fact inadequate in resolving the complaint. Sharia law is seen as a black box in the “Western” world. But I can’t help to think that being such an ancient body of law which is the accumulation of many years of experience and wisdom that it is unable to deal with Thinet’s situation. After all, there is nothing new under the sun. Expert of Sharia law should shed light on the situation and see whether it is inadequate. Hopefully, having a better understanding of the Sharia law will strengthen the Saudi court and bring it up to par with its contemporaries. In order for globalization to truly benefit all those who play a part, each player should have a fair opportunity to explain itself and be seen under equal light.
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