How the law has changed on enforcing a debt
The Saudi Ministry of Justice has carried out a regulatory restructuring of the methods used to implement court rulings against debtors, under Article 46 of the Enforcement Law.
Much media attention has been focused on the suspension of a debtor’s Absher e-government services as a tool of enforcement, which is a particularly sensitive issue.
Article 46 related to the suspension of services states that if a debtor fails to provide or disclose sufficient assets to repay a debt within five days of notification or publication of an enforcement order, the judge has the power to make several immediate orders. They include a travel ban, banning the debtor from issuing a power of attorney over their property, and disclosing the properties of the debtor’s spouse and relatives.
However, with the new changes, debtors will no longer be automatically denied access to all online government services, with the suspension of e-government access limited to services that involve financial transactions. Previously, it also prevented people in debt from using other online government services, such as renewing a driving license, passport, car license or ID card.
Nevertheless, other options remain for the enforcement of a debt order — particularly executive detention, the regulations for which have also been amended, depending on the type of detention.
The first type is mandatory detention, which applies if the debt remains unpaid three months after the court judgment, or if it is SR1 million ($266,527) or more. The debtor may be released only with the consent of the applicant or the plaintiff, or by a court ruling that is subject to appeal.
The other type of detention is permissible detention, which applies in the same way as mandatory detention, but after a period of six months. In this case, a debtor may be released by the court if it is convinced of his determination to settle the debt, and is satisfied with his financial situation in general.
Executive detention is for an initial period of three months. After questioning the debtor, the court may extend the detention for successive three-month periods.
However, debtors cannot be imprisoned if they are aged 60 or more, if they have young children, or if they have a deceased or imprisoned spouse.
Issues related to the enforcement of debt are of great importance to everyone involved. These changes take into account the circumstances of debtors. The challenge of the next stage will be to ensure they do not at the same time harm the interests of creditors.
Dimah Talal Alsharif is a Saudi legal counsel and a member of the International Association of Lawyers. Twitter: @dimah_alsharif