3 ANTECEDENTES INVESTIGATIVOS

As discussed earlier, the long-term disagreements between Shari'ah scholars who dominate the judicial authority and the Saudi policy-makers have brought into existence several administrative committees that have a judicial jurisdiction. Such a dispute has negatively affected the structure of the judicial authority and pushed the Shari'ah courts to refuse to introduce and implement some legislation that conflicts with Shari'ah and, at the same time, has pushed the government to create these kinds of semi-judicial committees. This disagreement negatively impacts on the requirement of the comprehensive development and damages the local economy, commerce and the needs of civil society. Therefore, both politicians and Islamic scholars should work together to end this conflict and find a solution that ensures that all kinds of disputes including securities disputes will be covered by the structure of judicial authority.

This serious dilemma may be solved by two main methods, which have some obstacles but these are fewer than the problems that may come from the current situation. First, the policy-makers can recognise and comply with numerous articles in different laws in Saudi Arabia that emphasise that all legislation must be formulated in accordance with the principles and the sources of Shari‘ah including regulations relevant to development.267 These articles also impose on the courts to apply the provisions of Islamic Shari‘ah exclusively.268 _{This would mean banning all practices}

whether national or international that depart from Shari‘ah in all sectors, including commerce, corporate, banking and securities market. There is nothing that prevents a country from enacting legislation that harmonises with local culture and responds to the demands of the majority of citizens, as long as it does not damage third parties. These

266 _{See the CMA announcement on the Issuance of a Final Decision by The Committee for the Resolution}

of Securities Disputes on 09/02/2017 available at: http://cma.org.sa/en/News/Pages/CMA_N_2182.aspx, accessed on 18/8/2016.

267 _{Articles 1, 46, 55 of Basic Law of Governance 1992 in the Kingdom of Saudi Arabia. And see article}

2 of Law of the Shura Council 1992 in the Kingdom of Saudi Arabia.

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rights and local particularities should be respected by foreign investors who want to work or invest in Saudi Arabia.

On the other hand, Shari'ah scholars could be more proactive and respond to the requirement of the development and the economic needs and also be more harmonised with the global commercial system and international agreements. Moreover, the negative position against the codification needs to be reviewed by Shari'ah scholars and be made flexible to follow specific provisions that have been codified in some fields and then been adjudicated thereunder, as long as this codification does not conflict with Shari'ah teachings. This will be achieved in two ways: encouraging research to find appropriate solutions and new products to meet economic and financial needs that are compatible with Shari'ah; and by improving the judicial authority, qualifying programmes, curriculums and judges’ competence so that they are qualified and have sufficient experience to deal with the cases filed before semi-judicial committees. It should be noted that these two actions, to some extent, are already in place. A good example comes from banking sector that was once very removed from the provisions of Shari‘ah. However, now the Islamic banking system provides a wide variety of financial products that are internationally applicable and globally recognised. Moreover, the Islamic universities in Saudi Arabia offer several postgraduate programmes concerned with legal comparative studies, including financial and commercial law.269 Furthermore, they have implemented, especially in the last decade, scholarship programmes abroad and sent many students who have undergraduate degrees in Shari'ah to study in the most prestigious universities around the world. Many of them return with useful knowledge and experience.270 This solution is more suitable to the recent trend that is clearly stipulated by the Saudi law issued in 2007 which allows the commercial courts to cover all authorities of the commercial judiciary and aims to abolish the current administrative judicial committees over time.271

269 _{See for example the postgraduate programs in Higher Judicial Institute, available at}

http://t.co/nvyhKG74Aa And those programs in Islamic University in Medina available at http://www.iu.edu.sa/Page/20780, accessed on 18/8/2016.

270 _{In addition, there are thousands of students who take advantage the Custodian of The Two Holy}

Mosques Scholarship Program based on the royal decree number mb/5387 in 25.5.2005 and continued for 10 years.

271 _{Section 8 of the Operational Mechanism of Judicial law, available at the official website of Supreme}

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The second way to solve the judicial dilemma and its negative effects caused by the semi-judicial committees in Saudi Arabia is to improve these committees, transforming them into authentic courts with two levels: first instance and appellate. This would require the Saudi legal system to recognise these committees as part of the judicial authority or at least for them to be recognised by the government as courts with all their powers, authority and independence. This applies also to appointing their members, their tenures, work locations and the nature of their decisions to be similar to those in the judicial authority. Moreover, the members of these committees should be selected from highly qualified individuals according to standards that meet the functions of judicial authority and the specific jurisdictions they will deal with.

It may be difficult to create courts, under the current judicial authority, which deal with some cases that conflict with Shari'ah and the Basic Law of Governance. However, this exactly applies to the current committees that are run in the same location and legal environment but with different names and procedures. This may point to a problem with names and not actual practice. Therefore, these committees can have the same characteristics and procedures of the courts regardless of the name they are given. In conclusion, it is should be noted by both politicians and Islamic scholars that the unfairness, the abuse and the neglect of rights that may arise from the current situation of vesting some judicial functions to administrative committees are, in fact, in much greater conflict with both Shari'ah teachings and the Basic Law of Governance.

3.2.5 The Major Legislation Affecting the Board of Directors of Listed