Article 22 of the Saudi Commercial Pledge Law

The possessor, under the law's definitions, is whoever holds the pledged asset, whether the pledgor, the pledgee or the custodian. This article regulates its responsibility in three paragraphs:

1- Responsibility for safety: The possessor is responsible for the safety of the pledged asset until the pledge ends or the asset is enforced against. The pledgee or the pledgor, as the case may be, may ask the competent court to require the possessor to take the measures necessary to preserve, protect, maintain and repair the asset.

2- Objecting to the possessor's actions: The pledgee or the pledgor, as the case may be, may object before the competent court to any action the possessor takes that may reduce the asset's value or expose it to destruction or defect, and the court considers the objection urgently.

3- Liability for the value on destruction: The possessor is liable for the value of the pledged asset if it perishes due to its transgression, negligence or default, subject to paragraph 1 of Article 24, which provides that if the pledged asset perishes in the pledgor's hands through its transgression or neglect, the secured debt falls due and the term lapses, with the pledgee's right to enforce against the remainder of the asset if any, unless the asset is replaced under Article 16. Paragraph 2 of Article 24 adds that if compensation becomes due for the destruction, the pledge moves to the compensation, unless the pledgor and the pledgee agree otherwise.

Note that the article places responsibility on the possessor, whoever it is, pledgor, pledgee or custodian, and that the right to apply and to object before the court belongs to the pledgee or the pledgor depending on who holds the asset.

In disputes over the safety or destruction of the pledged asset, it is advisable to consult a lawyer specialized in commercial and finance matters.