A recent decision of the English Court of Appeal' has once again highlighted the problems surrounding insurance transactions connected with Saudi Arabia. The plaintiff, Islamic Arab Insurance Co. (IAIC), is a company incorporated in the UAE, with representation in Saudi Arabia. The defendant, Saudi Egyptian American Reinsurance Co. (SEARCO), is registered in Panama and has its operational headquarters in the USA. IAIC insured certain risks in Saudi Arabia, and reinsured with SEARCO, through a major broker based in London. A loss occurred under the primary policy, and IAIC sought recovery under the reinsurance treaties. SEARCO disclaimed liability, and in 1985 IAIC issued a writ against them out of the High Court in London. Leave to serve the writ out of the jurisdiction was given ex parte. SEARCO appealed, and Steyn J granted a stay, on the condition that the Saudi courts would assume jurisdiction. He held, inter alia, that the treaties were governed by Saudi law. SEARCO signed a deed of submission to the Saudi courts, but were referred to the Ministry of Commerce. In a letter to the Ministry, SEARCO stated that it would only agree to have the dispute heard by a judge with specialisation in the insurance field, and that the USA or the UAE, or possibly Switzerland, would be more appropriate fori. IAIC appealed from Steyn J's judgment to the Court of Appeal (Parker and Bingham LJJ), who allowed the appeal. Before commenting on the decision, I will discuss the peculiar position of insurance in Saudi Arabia: