The Court

 
After reviewing the documents and listening to the report read by the presiding judge, and after prosecution and deliberation;
 
Whereas the contestation has fulfilled its procedural forms;
The facts as shown from the contested ruling and all the papers may be summarized as follows:
 
The appellee has filed case No. 1056 of 2008 requesting an order for the two contestants and others to pay him an amount of 2,320,000 Riyals. The appellee stated that he paid this amount to ….. Company as Murabaha but he learned that the company is violating the provisions of the law and so he claimed recovery of this amount but the Company refused, although a guaranteed cheque for this amount is available. He accordingly filed this case. The first contestant also filed two cases related to this issue by virtue of petition No. 610 of 2008 in which he rejected the decision banning him from travelling and requested its cancellation. The court added this grievance to the similar petition. The court also produced an expert and after he delivered his report the court then ruled firstly on the original claim by obligating the company and the two contestants, jointly with others, to pay to the appellee an amount of 2,320,000 Riyals; and secondly, with respect to the grievance, the court rejected it and sustained the subject of the grievance. The two contestants and others appealed the judgment by appeal No. 119 of 2009. On 25/5/2010 the court ruled in favour of approval of the contested judgment. The two contestants contested this ruling through cassation and the contestation was produced to the Court in the counseling room and the court decided a session for reviewing it.
 
The contestation is based on two reasons:
a.     The court’s reasoning is defective and its inferences inadequate and a deviation from the facts established in the documents. The judgment has held the contestants jointly liable for the claimed amount whereas it is established in the documents that the appellee was aware that the company is a limited liability company, and that with respect to the paid amount the dealing was between him and the so called ……, hence any prior mistake related to their joint responsibility with the company shall be baseless. In addition, they have committed no violation that renders them liable in their own money for the debt, the subject of the claim.
b.     The ruling has not applied the correct provisions of the law to the incident, which implies that the ruling is defective and requires cassation.
 
This reasoning is not correct because it is established in the jurisdiction of this court that Articles 226 and 240 of the Commercial Companies Law No. 5 of 2002 provide that a director of a limited liability company shall have full authority to manage the company unless the articles of association of the company decide his authorities, and that his acts are binding on the company without him being liable in his own money for any of the obligations arising from such acts. Also, for the protection of others when dealing with a limited liability company the legislator, as an exceptional requirement, has necessitated the addition of the words “limited liability" and a statement of the capital amount and a provision for the punishment of the director for negligence by holding him jointly liable with the company towards others. However, the court is bound in any event to verify the correct legal ruling issued between the two parties to the litigation and to apply it to the incident before it. This being the case, and taking into consideration that the preliminary ruling which is supported by the contested judgment has concluded that the company has given itself a name commensurate to its purpose, which is ……………… company, but did not include the words “limited liability company” in its name in the Murabaha contract signed between it and the appellee, and that it has exercised its activity in the business of investment of funds for the account of others in clear violation of the law. The judgment has also concluded in its ruling that the contestants are jointly liable in their money, which liability is governed by the companies’ law as mentioned earlier. The judgment provided in the ruling has established its roots in the documents which are sufficient for supporting the ruling. Therefore, criticism of the said ruling in this regard is baseless and thus should be rejected.
 
Therefore;
The court rejected the contestation and obligated the contestants to bear the costs and ordered confiscation of the bail.