Article 25 of the Saudi Commercial Pledge Law

As a rule the pledged asset remains security for the debt until it falls due, but this article permits selling it earlier by order of the competent court in two cases:

First case (at the request of the pledgor or the pledgee): The court may order the pledged asset sold even if the secured debt has not fallen due, when any of the following is met:

• The pledged asset is exposed to destruction or loss of value.
• The expected cost of repairing it exceeds half its value at the time of the pledge contract.
• Possessing and caring for it requires substantial expenses.

Second case (at the request of the pledgor alone): The court may permit the pledged asset to be sold if an opportunity arises to sell it at a price exceeding its value at the time of the pledge contract.

Method of sale: The pledged asset is sold by any method the competent court determines.

The pledgor, under Article 1, is the one who provides the pledge, whether debtor or guarantor who pledges an asset, and the pledgee is the one for whose benefit the pledge is provided. The article does not state what becomes of the sale proceeds afterward. This article comes after Article 24, which deals with the destruction of the pledged asset in the pledgor's hands through its transgression or neglect and the pledge moving to the compensation if compensation becomes due for the destruction. As for enforcement against the pledged asset, Article 26 indicates that the Regulations may set special provisions for it, subject to the Law of Security Rights over Movable Assets.

Paragraph (4) of this article was deleted by Royal Decree No. M/94 dated 15/8/1441 AH. To assess a particular case, it is advisable to consult a lawyer specialized in commercial and finance matters.