Article 247 of the Saudi Civil Transactions Law
المادة 247 من نظام المعاملات المدنية · الفصل الأول: حوالة الحق
If an attachment is imposed in the debtor's hands before the assignment takes effect against third parties, the assignment is treated as another attachment as to the attaching creditor, and the right is divided between them as between creditors sharing proportionally.
Official text (Arabic)
This article has not been amended since the law was issued.
إذا وقع تحت يد المدين حجز قبل أن تصبح الحوالة نافذة في حق الغير كانت الحوالة بالنسبة إلى الحاجز بمثابة حجز آخر، فيقسم الحق بين المحال له والحاجز قسمة غرماء.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 247 explained in plain English
This Article deals with a competition between two persons over the same right: the assignee, to whom the right passed by assignment, and another creditor of the assignor who imposed an attachment on this right in the debtor's hands.
The Article governs a specific case: where the attachment is imposed in the debtor's hands before the assignment takes effect against third parties. In this case:
- The assignment is treated as to the attaching creditor as another attachment, so the assignee does not take precedence over the attaching creditor.
- The right is divided between the assignee and the attaching creditor as between creditors sharing proportionally, meaning each takes from the right in proportion to what he is owed, rather than one of them collecting his full right before the other.
The Article thus neither invalidates the assignment nor makes the attaching creditor alone the holder of the right, but puts them on an equal footing in the competition.
The Article does not address an attachment that occurs after the assignment takes effect against third parties; it is limited to an attachment that precedes enforceability.
It is connected with Article 246, which, where a single right is assigned more than once, gives precedence to the assignment that is earlier in taking effect against third parties; the criterion in both cases is the time the assignment takes effect against third parties. An assignee who is late in making his assignment effective against third parties therefore exposes himself to sharing the right with other creditors.
Attachment and competing-claim cases involve many procedural details, so it is advisable to consult a lawyer specializing in civil cases or one specializing in enforcement cases.
Practical example
Salman is owed SAR 90,000 by a company in Riyadh, and he assigned it to Faisal. Before the assignment took effect against third parties, another creditor of Salman imposed an attachment on this sum in the company's hands. Here Faisal's assignment is treated as to the attaching creditor as another attachment, and the sum is divided between Faisal and the attaching creditor as between creditors sharing proportionally.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 247 of the Saudi Civil Transactions Law
What happens if a debt is attached before its assignment takes effect?
The assignment is treated as to the attaching creditor as another attachment, and the right is divided between the assignee and the attaching creditor as between creditors sharing proportionally.
What does dividing as between creditors sharing proportionally mean?
That the competing parties share the right, each in proportion to what he is owed, without one taking precedence over the other.
Does an attachment invalidate the assignment of a right?
No. The Article does not invalidate the assignment, but treats it against the attaching creditor as another attachment.
More articles on Assignment of Rights and Debts
- Article 238
The Article allows a creditor to assign his right to another person unless legal provisions, agreement or the nature of the obligation prevent it, and does not require the debtor's consent for the assignment to be concluded.
للدائن أن يحيل حقه إلى شخص آخر، وذلك ما لم تقتضِ النصوص النظامية أو الاتفاق أو طبيعة الالتزام خلاف ذلك، ولا يشترط لانعقاد الحوالة رضى المدين بها.
- Article 239
The Article limits the validity of an assignment of a right to the portion that is attachable, so what cannot be attached cannot validly be assigned.
لا تصح حوالة الحق إلا بقدر ما يكون منه قابلًا للحجز.
- Article 240
The Article requires, for an assignment to be enforceable against the debtor and third parties, that the debtor accept it or be notified of it by a lawful means, and that acceptance relied on against third parties be in writing with a certain date.
لا تكون حوالة الحق نافذة تجاه المدين أو تجاه الغير إلا إذا قبلها المدين أو أُعلِم بها بأي وسيلة مقررة نظامًا، على أن نفاذها تجاه الغير بقبول المدين يستلزم أن يك
- Article 241
The Article provides that the assigned right passes to the assignee with its attributes, accessories and guarantees as it was with the assignor.
ينتقل الحق إلى المحال له بصفاته وتوابعه وضماناته.
- Article 242
The Article determines the assignor's guarantee: in an assignment for consideration he guarantees the existence of the right at the time it is concluded unless otherwise agreed, and in an assignment without consideration he does not guarantee its existence.
1- إذا كانت الحوالة بعوض، لم يضمن المحيل إلا وجود الحق المحال به وقت انعقاد الحوالة، ما لم يتفق على خلاف ذلك. 2- إذا كانت الحوالة بغير عوض، لم يضمن المحيل وجود
- Article 243
The assignor does not guarantee the debtor's solvency except by special agreement, and if he guarantees it, the guarantee applies to solvency at the time the assignment is concluded unless otherwise agreed.
لا يضمن المحيل يسار المدين إلا إذا وجد اتفاق خاص على هذا الضمان، وإذا ضمن المحيل يسار المدين لا ينصرف هذا الضمان إلا إلى اليسار وقت انعقاد الحوالة ما لم يتفق عل
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.