Article 99 of the Saudi Companies Law
المادة 99 من نظام الشركات · الفرع الثاني: جمعيات المساهمين
A shareholder who objected to a general assembly resolution that breaches the Law or the articles of association, or who was absent with an acceptable excuse, may ask the court to annul it within 90 days, provided they remain a shareholder throughout the case.
Official text (Arabic)
This article has not been amended since the law was issued.
1- دون إخلال بحقوق الغير حسن النية، يكون لأي مساهم التقدم إلى الجهة القضائية المختصة بطلب إبطال قرار جمعية المساهمين الصادر بالمخالفة لأحكام النظام أو نظام الشركة الأساس، إذا اعترض عليه خلال الاجتماع، أو تغيب عنه بعذر مقبول. ولا تسمع دعوى البطلان بعد انقضاء (تسعين) يومًا من تاريخ صدور القرار.
2- يشترط لرفع الدعوى المشار إليها في الفقرة (1) من هذه المادة أن يكون رافع الدعوى مساهمًا في الشركة أثناء رفع الدعوى وخلال جميع إجراءاتها.
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 99 explained in plain English
This article gives shareholders a judicial remedy to protect themselves against unlawful shareholders' assembly resolutions: the action for annulment.
Resolutions that may be challenged: a resolution passed in breach of the provisions of the Companies Law or of the company's articles of association.
Conditions for bringing the action:
- The shareholder must have objected to the resolution during the meeting, or been absent from it with an acceptable excuse.
- The action must be filed before 90 days have passed from the date of the resolution; it will not be heard after that.
- The claimant must be a shareholder of the company when filing the action and throughout all of its proceedings; if they sell their shares while the case is pending, this condition is no longer met.
Where the action is filed: the competent judicial authority.
Protection of good-faith third parties: the right to seek annulment is without prejudice to the rights of good-faith third parties, meaning that someone who dealt with the company in good faith in reliance on the resolution does not lose their rights because of this action.
It follows that a shareholder who attended the meeting and stayed silent without objecting does not have this right under the text. Anyone who sees a violation in a resolution being put forward should therefore record their objection during the meeting. Given the short time limit and the number of conditions, anyone wishing to challenge a resolution should promptly consult a lawyer who specializes in companies and commercial disputes.
Practical example
Sarah, a shareholder in a company in Riyadh, attended the general assembly meeting and saw that a resolution had been passed that breaches the company's articles of association, so she recorded her objection during the meeting. To ask for the resolution to be annulled, she must file her action before the competent judicial authority within 90 days of the date of the resolution, and she must remain the owner of her shares until the end of the proceedings.
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 99 of the Saudi Companies Law
What is the time limit for filing an action to annul a general assembly resolution?
An action for annulment will not be heard after 90 days have passed from the date of the resolution.
Can I challenge an assembly resolution if I did not attend the meeting?
Yes, if your absence was for an acceptable excuse and the resolution was passed in breach of the Law or the articles of association.
What if I sell my shares while the annulment case is pending?
The claimant must be a shareholder of the company when filing the action and throughout all of its proceedings.
Are people who dealt with the company on the basis of the challenged resolution affected?
The article provides that the right to seek annulment is without prejudice to the rights of good-faith third parties.
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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.