Cross-Cultural Examination of the Procedural Framework Governing Shareholder Litigation as Private Enforcement of Corporate and Securities Law in the KSA

Abstract

This thesis employs an investigation into private enforcement within corporate and securities law in Saudi Arabia from a procedural perspective. The research was precipitated by the lack of private enforcement mechanisms within Saudi corporate and securities law. There, the inadequacy of procedural rules has rendered private enforcement ineffective.

The aim of this study is to answer the following question: What is the normative function, or functions, of the private enforcement of corporate and securities law, and do the procedural laws of Saudi Arabia concerning shareholder litigation currently facilitate such functions? Theoretical and doctrinal approaches are employed in order to offer answers to such questions and sub-questions thereof. The thesis argues that there are four shareholder litigation goals functioning as private enforcement within corporate and securities law in jurisdictions such as the U.S. and U.K. These are the improvement of law, market development, deterrence, and compensation. It is argued that such goals are not only desirable but ought to be realisable in Saudi Arabia. However, the research also demonstrates that such goals are largely unmet due to deficiencies in the procedural rules which preclude shareholders from access to shareholder litigation. This thesis concludes that there is an urgent need to facilitate shareholder litigation procedurally, particularly given the negative influence of some of the distinctive features of the Saudi corporate setting, such as the impact of concentrated ownership within shareholder protection.

This thesis offers proposals for reforming direct, derivative, and collective shareholder litigation. The research puts forward original legislative-based proposals facilitating shareholder litigation and thereby potentially achieving one or more litigation goals.