Litigation Finance Contract Template for Saudi Arabia

The Litigation Finance Contract is essential for parties seeking to facilitate access to justice through third-party funding in Saudi Arabia. This document becomes relevant when a party with a viable legal claim requires external funding to pursue litigation or arbitration proceedings. The agreement must carefully balance commercial interests with Sharia compliance requirements unique to the Saudi jurisdiction. It typically includes detailed provisions for investment structure, profit-sharing mechanisms, control rights, and risk allocation, all while adhering to Islamic finance principles that prohibit conventional interest (riba) and excessive uncertainty (gharar). The document is particularly crucial in complex commercial disputes where significant litigation costs are anticipated and traditional financing options may not be suitable or available.

1. Parties: Identification of the Litigation Funder and the Funded Party, including full legal names and addresses

2. Background: Context of the underlying litigation and purpose of the funding arrangement

3. Definitions: Key terms used throughout the agreement, including 'Claim', 'Proceeds', 'Success Fee', 'Legal Costs', and 'Investment Amount'

4. Investment Terms: Details of the funding amount, drawdown conditions, and investment structure compliant with Sharia principles

5. Return Structure: Profit-sharing mechanism structured as Mudaraba or other Sharia-compliant arrangement

6. Control and Decision Making: Rights and limitations regarding litigation strategy and settlement decisions

7. Obligations of the Funded Party: Commitments regarding case prosecution, information sharing, and cooperation

8. Confidentiality: Provisions for maintaining confidentiality of litigation strategy and agreement terms

9. Termination: Circumstances and procedures for early termination of the funding arrangement

10. Governing Law and Jurisdiction: Specification of Saudi law application and dispute resolution mechanisms

11. Representations and Warranties: Statements of fact and assurances from both parties

12. Assignment and Transfer: Restrictions on transfer of rights and obligations under the agreement