Category: Intel

The Supreme Court confirmed a court of appeal judgment in which a lawsuit initiated by a joint venture company against a third party was dismissed on the basis that a joint venture company does not have legal personality, and therefore it is incapable of initiating lawsuits against any third party.

In line with article 58(4) of the Insurance Companies Law, the Supreme Court held that an arbitration clause is invalid if it is contained within the general terms of an insurance policy and not in a standalone agreement that is separate from such general terms.

The Supreme Court held that partners in a limited liability company who agree in the minutes of a partners' meeting to bear responsibility for repaying a loan taken for the benefit of the company become personally liable for its repayment in proportion to their shareholding once the company fails to repay it. The court also held that a court cannot award a party a sum that the party did not claim in the lawsuit, even if an expert report establishes its entitlement to it.

The Supreme Court held that a lease contract is dissolved by force of law if a competent authority prohibits the intended use of the property due to structural unsuitability, constituting a foreign cause beyond the control of the tenant. Consequently, the landlord must refund advance payments, and the tenant is not liable for compensation.

The Supreme Court ruled that a tenancy agreement commences on the date agreed between the parties for the commencement of the rent, and not the date of the actual tenancy agreement. In this case, the parties agreed that the tenancy agreement for a shop commences when the shopping mall officially opens, and because the shopping mall failed to open, the Supreme Court decided that the tenant owed no rent to the landlord and that the contract is rescinded.

The Supreme Court held that the five-year limitation period in article 18 of the Commercial Companies Law applies only to internal corporate claims (disputes among partners and claims against managers and auditors) and cannot bar an ordinary claim to recover a commercial debt. Additionally, the court ruled that an arbitration clause in a share purchase agreement binds only the parties to the sale, not a partner who signs merely to waive a right of first refusal.

The Supreme Court held that, while engineering consultants bear an "obligation of result" to identify regulatory obstacles under article 20 of the Law Regulating the Work of Engineering Consultancy Offices, a client's subsequent written authorisation to proceed with the project despite those obstacles constitutes a waiver of the right to claim compensation for the engineer's initial negligence.

The Supreme Court held that an employee establishing a private company in the same field as their employer constitutes a breach of the duty of non-competition and good faith, justifying termination without compensation.

The Supreme Court held that its prior determinations on legal issues bind lower courts under the principle of res judicata, which supersedes public order considerations. It also confirmed that arbitration awards do not need to be issued in the name of His Majesty the Sultan to be valid. Finally, the court ruled that nullity lawsuits are strictly limited to formal and procedural defects and cannot review the merits or reasoning of an arbitrator's decision.