The case began when the plaintiff delivered SAR 106,000 to the defendant to invest in the Saudi stock market in exchange for a share of the profits. However, the defendant did not return the full amount and only repaid SAR 68,000, leaving SAR 38,000 outstanding, while the plaintiff also claimed the profits arising from that agreement.
During the consideration of the dispute, the Committee found that the defendant had been carrying out investment activity without a legal license. It therefore held that the agreement between the parties was in violation of the Capital Market Law and concluded that it was void, while ordering the defendant to repay the remaining amount and rejecting the claim for profits.
Conclusion:
If the investment activity is based on an unlicensed practice, the agreement is void, and the right is limited to recovery of the remaining principal amount without any profits.