A Contribution To the Study of the Koranic Sources of Saudi Arabian Business Law

Abstract

From the study of commercial contracts made between the Saudi Arabians and European exporters, it is apparent that the latter have too much of a tendency to view the Saudi authorities as the source of the country's law. In doing so they are ignoring the key role played by Islamic Hanbali law.l Their view of the kingdom's law is all the more difficult to understand and accept since a good knowledge of it would be of benefit to them at all stages of the contractual process. In effect such a knowledge would lead to smooth and enlightened negotiations, with a final written agreement free from any infringement of the fundamental principles of the Shari'a. Finally in the event of litigation, it would make a decisive contribution to the protection of their rights. However, consider the case of an unfortunate European company, which even after execution had begun, had no redress against its Saudi counterparts, who came back on a major contract, already signed and sealed, because all its pages had not been initialled, this happening even though Hanbali Muslim law, for the very reason of itS religious character, knows no formalities. From this last trait flows one of the principal characteristics of the Islamic system, namely that the sovereign has no legislative power, this belorlging on one hand tO God and to the Prophet Mohamrned, so far as he received and conveyed his interpretations of a sacred and eternal book. On the other hand, legislative power belongs tO the legal theologian, who has the task of extricating concrete laws, resulting from a process of rationalising the Koran and Sunna. It follows that notwithstanding their general and abstract signiIScance and their socio-economic importance, the acts of the Saudi Government are sub ject to the law of the Koran. Unable to encroach upon the areas regulated by the Koran, they need to conform, at the very least, to the spirit of the Book. Due to its source, once such a law is revealed, it is placed at the top of the hierarchy of norms applicable in the Kingdom. In this way, we can return to the first peculiarity of Muslim law, that is that it is not a question of a discipline independent and separate from theology but is one of the two elements which together make up the Islamic faith. As the Prophet Mohammed solemnly declared in his sermon on Mount