JEDDAH: The Administrative Court has slammed the Jeddah municipality for terminating a contract with a local service company responsible for collecting fines from businesses that have broken trading rules.
The municipality has been ordered to honor the contract and pay legal costs, court sources said on Tuesday.
The service company is paid a commission on the fines it collects. According to one source, the municipality imposes at least SR500 million in fines every year on traders.
He said the commission the company receives increases according to the total fines it collects.
The source did not reveal the name of the service company but said it had been working with the municipality for a year and a half before being told to stop work. The authority had claimed that the company had breached the terms of the contract.
The company reacted by taking legal action, successfully proving in court that it had fulfilled its side of the agreement by presenting statistical evidence of the fines collected.
The judge rejected the municipality’s claims after listening to testimonies from experts.
