Clifford Chance (CC) has appeared in the Saudi courts for a complete rehearing of its Saudi office licence case, which could, it is understood, take up to two years.

The courts will weigh up whether CC and other professional services firms licensed in the Kingdom on the same legal basis, will have to reapply for their licences. 

CC has been embroiled in an investigation over its office licence in Riyadh since it was granted it in 2013. It was the first international law firm to set up a mixed local and foreign law firm partnership with its longstanding ally in Riyadh, Al-Jadaan. The branch opened for business in 2014.

However, shortly after CC gained its licence in 2013, a former Al-Jadaan associate appealed against the decision and commenced proceedings in the Saudi courts.

The associate claimed that the Ministry of Commerce & Industry (MoCI), a government body, had acted unlawfully in licensing CC under the Professional Companies Regulations.

The court case has now been returned from the Court of Appeal to the lower court for a complete rehearing.

The Court of Appeal has given an advisory, non-binding opinion of its view of the law. It has suggested all foreign Saudi-owned professional companies should be licensed by the Saudi ‎Arabian General Investment Authority, in addition to MoCI.

CC attended the latest hearing at the lower court on 9 May. Documents were exchanged and the court reserved the case for its study.

The next hearing is scheduled for 8 August 2016.

The current Saudi court system is composed of a Supreme Judicial Council, Courts of Appeal and First-Instance Courts or lower courts (General Courts and Summary Courts).

The majority of international law firms operate in Saudi through local associations and therefore are not under scrutiny.

Clyde & Co is one of the few other fully integrated offices in Riyadh. It opened the office last year headed by Abdulaziz Al-Bosaily, whose law office has been closely associated with Clyde & Co for more than six years.

However, it is understood that it is not currently affected by the case involving CC.

CC currently has five Riyadh partners after one, Abdulaziz Al-Abduljabber, left the firm in December. The courts' review of CC's licence is unrelated to his departure.

It is understood that the magic circle firm intends to keep its Riyadh office whatever the outcome of the court case and will do whatever it takes to comply with the relevant regulations.

CC declined to comment and the MoCI did not respond to a request for comment.