The legal system is a mixed hybrid that has fused portions of Somali traditional norms, Shariah norms (usually of the Shafici school), and statutory law which pulls both from common law norms and civil law norms. 

At times, disputes and transactions are subjected to multiple levels of compliance with various mixes of these norms depending on the litigants’ intention or the subject matter of the dispute.

Land ownership rights are strongly upheld within Somaliland. Both foreigners and Somalilanders are freely able to purchase and sell property as they wish.

While there is not a clear allocation of subject matter jurisdiction between these sets of norms, many disputes and transactions will operate along the following lines. Shariah predominates jurisdictionally with regard to personal relations while traditional norms provide an important supplement to the Shariah norms. Traditional norms predominate jurisdictionally with regard to small transactions or larger transactions where the participants are not willing or able to comply with the statutory law. Statutory law predominates jurisdictionally for large and sophisticated transactions. This brief overview may serve as a guide, but it should be noted that any particular dispute or transaction may be subjected to any of the three major systems (Shariah, traditional, and statutory).

Practically speaking a large proportion of disputes in Somaliland is subjected to a two-tier dispute resolution framework. The first tier of dispute resolution is usually an Alternative Dispute Resolution (ADR) moderated by traditional leaders. Even where one of the litigants files a case with one of the courts of first instance, many courts will require ADR by traditional leaders prior to hearing the case. Traditional mediation is commonly practiced in the country and it usually seeks the consent of the two opposing parties on the decision reached by the mediating team prior to the final outcome. In some cases the traditional mediation is considered more favorable than the formal court system. If certain requirements are met, the agreement which comes out of the ADR may be enforced by the state. Under the Civil Procedure Code, on application of a party, the court may grant conservatory or other interim relief in support of an ADR agreement. If the ADR is successful, the parties may register the agreement or award with the Regional Court within 10 days from its issuance if it is in written form and meets other formality requirements in order to have the court support the enforcement of the ADR agreement.

The second tier of dispute resolution is the formal court system, which becomes the dominant venue for dispute resolution if the ADR was unsuccessful. Litigation before the courts is regulated by the Civil Code which provides the statutory basis for most commercial activity. Civil litigation is administered by the formal courts with lawyers usually representing the litigants.

Lawyers are admitted to practice before the courts based on either a law degree or extensive experience. There is no current Bar Association which has full administrative control within Somaliland. The Somaliland Lawyer’s Association is in the process of debating its by-laws, and it is expected that at the end of 2013 the Somaliland Lawyer’s Association will be more clearly developed and begin operation as a more clearly defined Bar Association.

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Corporate matters, including investment regulation, are controlled by the statutory law system for the most part. In this area, the Company’s Act and Foreign Direct Investment Act are the major pieces of legislation which control the norms applied to corporate and investment matters.