SAUDI ARABIA Law and Practice Contributed by: Saud AlRomi, Mostafa Ihab and Saleh Elbadry, Mohammed AlDhabaan & Partners Eversheds Sutherland
5. Enforcement 5.1 Methods of Enforcement The Enforcement Process
Bilateral Agreements Beyond the multilateral frameworks mentioned pre - viously, Saudi Arabia has concluded bilateral agree - ments and memoranda of understanding with a number of countries relating to judicial co-operation, financial investigation and extradition. The scope and terms of available assistance will therefore vary depending on the country involved, and the applicable bilateral framework should be verified at the outset of any cross-border fraud matter. 4.2 Service of Proceedings out of the Jurisdiction Method of Service Under Article 19 of the Civil Procedure Law, where the person to be served resides outside the Kingdom, a copy of the notice is sent to the Ministry of For - eign Affairs for delivery through diplomatic channels. A statement from the Ministry confirming delivery to the person to be served is deemed sufficient. This applies to both Saudi defendants outside the King - dom and non-Saudi defendants, as confirmed by the Implementing Regulations of the Civil Procedure Law. International treaties and conventions applicable between the Kingdom and the relevant country are taken into account. Foreign Companies With a Kingdom Presence Where a foreign company has a branch or agent in the Kingdom, service is effected on the branch manager or agent, or their designee, under Article 17 of the Civil Procedure Law. In such cases, overseas service through diplomatic channels is not required. Alternative Service in Practice In practice, a claimant may serve the defendant abroad by courier and submit proof of personal receipt to the court as an alternative to the Article 19 diplomatic channel process. Although this does not strictly fol - low the Article 19 procedure, courts may accept it as valid service on the basis of Article 5 of the Civil Pro - cedure Law, which provides that procedural require - ments are satisfied when their underlying purpose has been fulfilled – and the purpose of service is to ensure the defendant has actual notice of the proceedings. However, the Implementing Regulations of the Civil Procedure Law provides the court has discretion if the underlying purpose of a procedure has been fulfilled.
Enforcement is conducted through enforcement courts. A claimant holding an enforceable instrument, under Article 9 of the Enforcement Law, files a request, and the judge issues an order to the debtor to fulfil what has been ordered. If the debtor fails to com - ply within five days, the judge issues an order under Article 46 of the Enforcement Law, mandating disclo - sure and enforcement against the debtor’s present and future assets. In standard practice, this results in bank accounts being identified – sufficient funds are transferred directly to the court’s account. The judge may also impose a travel ban and other measures. Attachment and Forced Sale The enforcement judge may also attach and sell the debtor’s movable and real property under Articles 35–55 of the Enforcement Law. Attachment invalidates any subsequent disposition of the attached assets. Garnishment of Financial Assets The Enforcement Law provides specific garnish - ment mechanisms for financial assets. Under Arti - cle 60, bank accounts – including current accounts, investment accounts, term deposits and safe deposit boxes – are garnished through the financial institu - tion’s supervisory authority, which bars the debtor from withdrawing funds. Under Article 61, company equity shares are garnished through the Ministry of Commerce, and securities through the Capital Market Authority. Under Article 62, commercial papers (nego - tiable instruments) including cheques and promissory notes may be garnished. Under Article 63, future funds owed to the debtor may also be captured. Asset Disclosure Under Articles 16 and 17 of the Enforcement Law, the enforcement judge may order mandatory disclosure of the debtor’s assets from all competent authorities, registration bodies, accountants and employees. Under Article 46 of the Enforcement Law, asset dis - closure may extend to assets of the debtor’s spouse, children and nominees.
296 CHAMBERS.COM
Powered by FlippingBook