Article 552 of the Saudi Civil Transactions Law
المادة 552 من نظام المعاملات المدنية · الفرع الثاني: آثار عقد المضاربة
The capital owner must hand the mudaraba money to the mudarib and enable him to manage it and deal with it.
Official text (Arabic)
This article has not been amended since the law was issued.
يلتزم رب المال بتسليم مال المضاربة للمضارب وتمكينه من إدارته والتصرف فيه.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 552 explained in plain English
This article sets out the capital owner's basic obligation in a mudaraba contract, which has two parts:
- Handing over: actually handing the mudaraba money to the mudarib.
- Enabling: enabling the mudarib to manage the money and deal with it.
It is not enough for the capital owner to sign the contract and keep the money with him, or to hand it over and then obstruct the mudarib's work. A mudaraba rests on the mudarib working with the money, and he cannot do so unless the money is placed in his hands and he is allowed to manage it.
This article is linked to Article 553, which provides that after the capital has been handed to him, the mudarib has the right to manage it and deal with it in accordance with the articles it refers to, taking into account what the mudaraba contract between him and the capital owner requires. So Article 552 sets out what the capital owner must do, and Article 553 sets out what the mudarib is entitled to as a result.
It is also linked to Article 551, which explains what may be the capital of a mudaraba, such as a debt owed by the mudarib or non-cash property.
If the capital owner refuses to hand over the money or prevents the mudarib from managing it, the mudarib can consult a lawyer who specializes in commercial contracts and civil cases to learn his rights.
Practical example
Sami agreed with a businessman in Jeddah on a mudaraba in the perfume trade, in which the businessman provides the money and Sami works. After the contract was signed, the businessman kept the sum in his own account and insisted on approving in advance every small purchase. This conflicts with his obligation to hand the money to Sami and enable him to manage it and deal with it.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 552 of the Saudi Civil Transactions Law
What is the capital owner obliged to do in a mudaraba?
He must hand the mudaraba money to the mudarib and enable him to manage it and deal with it.
When does the mudarib have the right to manage the money?
Under Article 553, he has the right to manage it and deal with it after the capital has been handed to him, taking into account what the mudaraba contract requires.
Is signing the mudaraba contract enough without handing over the money?
No. The article obliges the capital owner to hand the money to the mudarib and enable him to manage it.
More articles on Partnership and Mudaraba
- Article 528
The article requires partnership contracts and their amendments to be in writing or be void, while barring reliance on the voidness against third parties and limiting its effect between the contracting parties to the period after a voidness claim is filed.
1- يجب أن تكون عقود المشاركة الواردة في هذا الباب مكتوبة، وإلا كانت باطلة، ولا يجوز أن يحتج المتعاقد بالبطلان تجاه الغير، ولا يكون للبطلان أثر فيما بين المتعاقد
- Article 529
The article defines the partnership as a contract under which two or more partners contribute a share of money, work, or both to a project in order to divide its profit or loss, and excludes partnerships governed by special legal provisions.
1- الشركة عقد يسهم بمقتضاه شريكان أو أكثر بتقديم حصة من مال أو عمل أو منهما معًا في مشروع لاقتسام ما ينشأ عنه من ربح أو خسارة. 2- لا تسري أحكام هذا الفصل على ال
- Article 530
The article bars a partner's influence, reputation or financial credibility from being his share, explains how a non-cash share is valued, and says when a partner's obligation ends if his share is a debt owed by a third party.
1- لا يصح أن تكون الحصة أو بعضها ما للشريك من نفوذ أو سمعة أو ثقة مالية. 2- إذا كانت حصة الشريك غير نقدية، قُدرت الحصة بقيمتها عند التعاقد أو بما يتفق عليه الشر
- Article 531
The article allows a partnership to be based on the partners' joint liability for what they undertake in their obligations for its benefit, makes each partner's share in the capital equal to what he undertook unless otherwise agreed, and allows partners to differ in their obligations.
1- يصح أن تقوم الشركة على أساس تضامن الشركاء فيما يلتزمون به في ذممهم من مال أو عملٍ لمصلحة الشركة، وتكون حصة كل منهم في رأس مال الشركة بقدر ما التزم به في ذمته
- Article 532
The article provides that each partner's share is determined by what he undertook in the partnership contract, and that he may not increase it except with the consent of the other partners.
تتحدد حصة كل شريك بالحصة التي التزم بها في عقد الشركة، ولا يجوز للشريك زيادة حصته عن الحصة المحددة في عقد الشركة إلا بموافقة باقي الشركاء.
- Article 533
The article subjects the guarantee of a partner's share to the rules of sale if it is a right of ownership or another real right, and to the rules of lease if it is merely the use of property.
إذا كانت حصة الشريك حق ملكية أو أي حق عينيّ آخر فإن أحكام البيع هي التي تسري على ضمان الحصة إذا هلكت أو استحقت أو ظهر فيها عيب، وإذا كانت الحصة مجرد الانتفاع با
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.