Article 35 of the Saudi Enforcement Law
المادة 35 من نظام التنفيذ · الفصل الثامن: إيداع حصيلة التنفيذ وتوزيعها
If enforcement proceeds are insufficient, the court records the parties' amicable agreement on distribution; if they do not agree, it distributes with priority to preferred debts, and its order may be objected to.
Official text (Arabic)
This article has not been amended since the law was issued.
إذا كانت حصيلة التنفيذ لا تكفي للوفاء بحقوق طالبي التنفيذ الحاجزين ومن يُعَدُّ طرفًا في إجراءات التنفيذ وفقًا لأحكام النظام، فتتخذ المحكمة الآتي:
1- إذا اتفق طالبو التنفيذ الحاجزون ومن يُعَدُّ طرفًا في الإجراءات على تسوية ودية فيما بينهم لتوزيع الحصيلة؛ تثبت المحكمة اتفاقهم في محضر وتأمر بالتوزيع وفق مقتضى الاتفاق الوارد فيه.
2- إذا لم يتفق طالبو التنفيذ الحاجزون ومن يُعَدُّ طرفًا في الإجراءات على تسوية ودية فيما بينهم لتوزيع الحصيلة؛ تأمر المحكمة بتوزيع الحصيلة بينهم مع مراعاة تقديم الديون الممتازة المتعلقة بأي منهم على سائر الديون وفقًا للأحكام النظامية المنظمة لذلك والضوابط التي تحددها اللائحة. ويكون الأمر الصادر بتوزيع الحصيلة قابلاً للاعتراض عليه وفقًا للإجراءات المنظمة لذلك.
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 35 explained in plain English
This article governs the case where enforcement proceeds are insufficient to satisfy the rights of the attaching enforcement applicants and those considered parties to the enforcement procedures, and sets two routes:
- Amicable settlement: If the attaching enforcement applicants and those considered parties to the procedures agree among themselves on an amicable settlement to distribute the proceeds, the court records their agreement in a minute and orders distribution in accordance with the agreement set out in it.
- If they do not agree: The court orders the proceeds to be distributed among them, giving priority to preferred debts relating to any of them over other debts, under the legal provisions governing that and the rules set by the Implementing Regulations. The distribution order in this case may be objected to under the procedures governing that.
The article itself does not specify what counts as a preferred debt, nor the ranking of preferred debts among themselves, but refers to the legal provisions governing it and the rules set by the Implementing Regulations.
This article complements Article 34, which provides that if the proceeds are sufficient to satisfy their rights, the court orders them to be distributed among them as the Implementing Regulations specify. It is followed by Article 36, which begins the provisions on direct enforcement of an obligation to do or refrain from doing something.
A party to a distribution of insufficient proceeds who believes his debt is preferred, or that the distribution order did not take that into account, may need to consult a lawyer specialized in enforcement cases.
Practical example
An establishment's equipment in Riyadh was sold at auction for SAR 400,000, while two attaching creditors have rights totaling SAR 600,000. The two creditors agreed on a way to share the amount, so the court recorded their agreement in a minute and ordered distribution accordingly. Had they not agreed, the court would have ordered distribution giving priority to a preferred debt if either of them had one, and either of them could object to the distribution order under the procedures governing that.
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 35 of the Saudi Enforcement Law
What happens if enforcement proceeds are not enough for all creditors?
If they agree on an amicable settlement, the court records it in a minute and orders distribution accordingly; if they do not agree, it orders distribution giving priority to preferred debts over other debts.
Can a distribution order for enforcement proceeds be objected to?
Yes. The order issued to distribute the proceeds when the parties do not agree may be objected to under the procedures governing that.
Are some debts given priority over others when proceeds are distributed?
When there is no agreement, priority is given to preferred debts over other debts, under the legal provisions governing that and the rules set by the Implementing Regulations.
More articles on Seizing Assets and Auctions
- Article 5
The article requires the holder of an asset of the enforcement debtor, where several bodies issued attachment orders on it, to notify the body that issued the later order of the first attachment.
إذا تعددت الجهات التي أصدرت أمر الحجز على مال من أموال المنفذ ضده، فعلى المحجوز لديه المال إشعار الجهة التي أصدرت أمر الحجز اللاحق بالحجز الأول. وتحدد اللائحة ا
- Article 6
The article provides that where enforcement attachments from two judicial bodies, or from a judicial and an administrative body, meet on the enforcement debtor's assets, all his assets are treated as attached for all requests, supervised by the judicial body that attached first.
1- استثناءً من أحكام الاختصاص المنصوص عليها في النظام ونظام التنفيذ أمام ديوان المظالم والأنظمة الأخرى ذات الصلة، إذا اجتمع حجز تنفيذي من جهتين قضائيتين أو من ج
- Article 18
The article provides that compulsory enforcement begins when 5 working days pass from notification without compliance, unless the debtor provides a bank guarantee, and permits a daily fine of up to SAR 5,000.
1- إذا مضت (خمسة) أيام عمل من تاريخ إبلاغ المنفذ ضده بأمر التنفيذ أو من تاريخ الإعلان وفق ما قضت به المادة (الرابعة عشرة) من النظام، ولم ينفذ المنفذ ضده التزامه
- Article 23
The article provides that all the enforcement debtor's assets stand as security for his debts from the date of notice or notification of the enforcement order or announcement, and allows enforcement attachment on an asset under precautionary attachment.
1- جميع أموال المنفذ ضده ضامنة لديونه من تاريخ إخطاره بطلب أداء الحق وفق ما قضت به المادة (الثانية عشرة) من النظام، أو من تاريخ إبلاغه بأمر التنفيذ أو من تاريخ
- Article 24
The article lets the enforcement applicant sue to annul the debtor's gifts, early repayments and unusual contracts made before attachment, and declares any disposal after an attachment order void.
1- يجوز لطالب التنفيذ أن يتقدم إلى المحكمة بدعوى إبطال تصرف المنفذ ضده، إذا ثبت أنه تصرف بأي مالٍ من أمواله من تاريخ إخطاره بطلب أداء الحق وفق ما قضت به المادة
- Article 25
The article limits attachment of the enforcement debtor's property to the amount of the debt unless the property is indivisible, and lets him designate property to be enforced against first.
1- لا يجوز حجز أموال المنفذ ضده إلا بمقدار الدين المطالب به، ما لم يكن المال المحجوز عليه غير قابل للتجزئة. 2- تحدد المحكمة أموال المنفذ ضده محل التنفيذ بما يحق
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.