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Gulf Agency Inc.’s Legal Case in Saudi Arabia Case Study


Gulf Agency Group is a world-wide known company that functions across different states and provides its services to numerous agents. There is also GAC Saudi Arabia, which functions on the territory of this state and is considered the greatest shipping agency in the country. It has grown from a small operational office at Ras Tanura to a huge international company that operates in ports like Dammam, Al Khafji, Jeddah, Yanbu, Jubail, Ras Tanura, Ras Al-Khafji, and Rabigh as well as the dry port in Riyadh (“Saudi Arabia” par. 1). At the moment, the Kingdom depends on its services greatly as it performs the majority of deliveries in the state.

Thus, it is obvious that being a great international company, it could not but face some problems in its functioning related to misunderstandings between different parties. All these misunderstandings are traditionally solved by courts. Thus, the main peculiarity of the company is its international character, which is why citizens of other states might file a lawsuit against it. For instance, the case Defleron v. Gulf Agency Inc. could be used to demonstrate the peculiarities of the legal environment in which it functions and how international law affects the company’s functioning.

The plaintiffs, Gregory Defleron and Leslie Defleron filed a lawsuit against GAC because they were dissatisfied with the quality of the suggested services and with the absence of the notification about the cancelation of the insurance, which resulted in significant losses. Representatives of GAC and underwriters at Lloyd’s of London Subscribing to Insurance Policy/Certificate No. HOL 00983 (“Defleron v. Gulf Agency, Inc” par. 1) had to present the facts that could be used by the court to determine whether Defleron’s claims had a legal basis or not. The Alabama Supreme Court concluded that the cancellation of the insurance was properly mailed and they were not GAC and Lloyd’s fault (“Defleron v. Gulf Agency, Inc” par. 1).

Data Analysis

Delving into the legal case, several crucial aspects should be mentioned. First, the Alabama Court of Civil Appeals considered this appeal, meaning that the given lawsuit could be considered an international law case that rests on the basic principles of the international law that should be respected and taken into account by all companies operating at this level. GAC Saudi Arabia belongs to this category as it guarantees the delivery of cargos, parcels, and other objects to the outlined destination points. Under these conditions, the basic regulations implied by the above-mentioned international law could be applied to the company. Second, there is another aspect that should be taken into account.

There is an actor (hereinafter it is referred to as Lloyd’s) that is also responsible for the events analyzed in the case. Following its description, Lloyd was responsible for insurance and all questions related to it. Its main duty was to monitor the terms of the agreement and inform GAC’s clients whether their insurance was still applicable or not. However, the plaintiffs insisted on the fact that their insurance was canceled without any clear reasons, and they were not informed about it appropriately. Under these conditions, GAC and Lloyd might be responsible for losses, and they also might be obliged to pay the compensation needed to cover them. Third, GAC’s cooperation with Lloyd’s rested on the idea that the last one had to control all questions related to insurance and provide appropriate and timely answers to all customers.

However, this very fact still does not cancel out GAC’s responsibility before its clients as it remains the actor that guarantees the safe delivery of various parcels and cargos. Moreover, GAC also insists that it provides insurance to all objects that are delivered by the company. For this reason, it is possible to speak about corporate responsibility as both GAC and Lloyd’s were responsible for the provision of customers with the needed information and investigation of every case. Additionally, because the Alabama Court of Civil Appeals stated that the cancellation of the insurance was properly mailed, and this was not GAC and Lloyd’s fault, it is also possible to say that there were no legal grounds for filing a lawsuit as GAC managed to control this aspect of its functioning and used the reasons listed in its statute (“Saudi Arabia” par. 1) to cancel the insurance when Lloyd’s fixed the fact that the notification was mailed. The Defleron’s inability to get it could be considered either the failure of the mailing system or some other reason (“Defleron v. Gulf Agency, Inc” par. 2).

There is also an opportunity to make an appeal and attain the reconsideration of the court’s decision in case there are additional facts that could prove the plaintiff’s right to demand compensation and insist on the provision of certain punishment for GAC and Lloyd’s as its representative. Moreover, investigating the case, the Alabama Court of Civil Appeals rested on the similar one that also ended with the justification of the accused and refusal to accept the plaintiffs point of view. This fact evidences that cases of this sort are rather popular and that there is a certain approach that is created to deal with them.

Additionally, several important aspects could be discussed in terms of the legal scope of the problem. First of all, one notices the fact that the case was considered in the USA by the court of Alabama when GAC also functions in Saudi Arabia. This fact gives rise to several important concerns. First, following the Kingdom’s laws that were accepted to integrate the state to the Western law environment (Robert 4), companies that function at the international level should be ready to accept the fundamental principles of the international law as it regulates the relations between companies from other (Stovall 3). These regulations and laws differ from those accepted in Saudi Arabia.

In the state, its legal environment is still strongly impacted by Islam and the principles that it presupposes for judges and courts (Patalong par. 2). However, the latest tendencies and alterations in the evidence of the law that there is an attempt to reconsider the existing approach to the sphere of justice and distinguish it from the religious institutions (Patalong par. 2). Under these conditions, the Defleron v. Gulf Agency case could show us that companies operating in Saudi Arabia are also able to act in accordance with international law as there is a certain basis for this cooperation (Mazzetti par. 3). Moreover, the fact that the company wins a case also evidences GAC’s clear understanding of the norms and regulations that should be taken into account to act legally and attain success in a certain sphere. The company’s cooperation with Lloyd’s also rests on these laws and contributes to its becoming more beneficial and prosperous.

Conclusion

Altogether, the case could be used as evidence of Saudi Arabia’s integration into the international legal environment and the ability of its companies to act in accordance with the basic regulations established by these laws. GAC Saudi Arabia is the largest shipping company in the state. It also provides its services to people all over the world. This fact also means that it becomes an international corporation, the functioning of which should also be organized in accordance with the above-mentioned principles. For this reason, GAC should also be ready to face numerous problems and accept responsibility when somebody files a lawsuit against it. The Defleron v. Gulf Agency case demonstrates that the company also cooperates with other organizations to make its functioning at the international level more efficient.

At the same time, it also becomes obvious that it accepts the international rules as the Court of Alabama considers the case of a company that belongs to another region. When delving into the case, it is also possible to understand the fact that GAC manages to act in accordance with these rules and monitor their observation. Defleron was not able to prove the fact that there were violations in the cancelation and delivery of the notification of this delivery. Lloyd’s and GAC managed to perform these acts in accordance with the basic terms of the agreement that existed between them and this agent. The court concluded that GAC was right when acting in this way. Finally, it is also possible to say that the given case demonstrates the tendency toward the improvement of the Gulf companies and their gradual integration into the Western law environment.

Works Cited

“Defleron v. Gulf Agency, Inc.” Cases Legal, Web.

Mazzetti, Mark. The New York Times, Web.

Patalong, Francis. Al Tamimi & Co, Web.

Robert, Jordan et al. “The Process of a Typical Commercial Case.” BarkerBots, www.bakerbotts.com. Accessed 24 Dec. 2016.

“Saudi Arabia.” GAC, Web.

Stovall, Howard, “Saudi Arabia: Agency and Distribution.” Stovall-Law.com, Web.

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IvyPanda. (2020, August 4). Gulf Agency Inc.'s Legal Case in Saudi Arabia. Retrieved from https://ivypanda.com/essays/gulf-agency-incs-legal-case-in-saudi-arabia/

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"Gulf Agency Inc.'s Legal Case in Saudi Arabia." IvyPanda, 4 Aug. 2020, ivypanda.com/essays/gulf-agency-incs-legal-case-in-saudi-arabia/.

1. IvyPanda. "Gulf Agency Inc.'s Legal Case in Saudi Arabia." August 4, 2020. https://ivypanda.com/essays/gulf-agency-incs-legal-case-in-saudi-arabia/.


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IvyPanda. "Gulf Agency Inc.'s Legal Case in Saudi Arabia." August 4, 2020. https://ivypanda.com/essays/gulf-agency-incs-legal-case-in-saudi-arabia/.

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IvyPanda. 2020. "Gulf Agency Inc.'s Legal Case in Saudi Arabia." August 4, 2020. https://ivypanda.com/essays/gulf-agency-incs-legal-case-in-saudi-arabia/.

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IvyPanda. (2020) 'Gulf Agency Inc.'s Legal Case in Saudi Arabia'. 4 August.

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