Financial Claims in the Saudi Legal System

Financial claims in the Kingdom of Saudi Arabia are important legal matters related to the rights of individuals and companies in obtaining their financial entitlements from other parties, whether they are companies or individuals. These claims vary depending on the legal and financial nature of the right being claimed, whether it arises from a commercial contract, debt, compensation, or other financial disputes. In this context, the Saudi legal system regulates these claims through a set of laws and regulations that guarantee the rights of the parties and ensure the completion of procedures according to the prevailing laws.

Types of Financial Claims in the Saudi Legal System

1.    Financial Claims Arising from Contracts
Financial claims often arise from the existence of a contract between two parties, whether it is a sales contract, employment contract, or services contract. If one party fails to fulfill its financial obligations, the other party has the right to claim the owed financial amount.

2.    Financial Claims Related to Debts
Debts are one of the main sources of financial claims in the Kingdom, where creditors have the right to claim the amount of their debt according to the agreement made with the debtor. Saudi laws regulate these claims based on debtor-creditor laws, and a lawsuit can be filed to demand payment.

3.    Financial Claims Arising from Work Accidents or Personal Injuries
In the case of individuals suffering from work-related accidents or personal injuries, the injured party can claim financial compensation for the damages sustained. The amount of compensation is determined based on the type of injury and the damages incurred.

4.    Financial Claims Related to Compensation
Some financial claims arise due to damages resulting from illegal actions or professional errors, such as medical malpractice or environmental damage. In such cases, the financial claim is filed in a competent court to determine the appropriate compensation.

5.    Financial Claims Due to Rent
If a tenant breaches the terms of the rental agreement or delays in paying rent, the landlord has the right to claim the financial dues through legal procedures in accordance with the Saudi system.

How to File Financial Claims in the Saudi Legal System

1.    Direct Negotiation
In many cases, the affected party can begin by negotiating directly with the other party to resolve the financial claim. A friendly settlement can be reached, either by paying the owed amounts or agreeing to another solution that satisfies both parties.

2.    Resorting to Enforcement Courts
If the friendly settlement fails, the affected party can file a lawsuit before the Enforcement Court. The Enforcement Courts in Saudi Arabia specialize in matters related to the execution of judicial rulings and financial claims that have a final judgment, such as demanding the debtor to pay or hand over financial assets.

3.    Filing a Claim with the Commercial or Civil Court
If the claim is related to a commercial or civil dispute, the lawsuit is filed with the competent court, whether it is a commercial court for business-related matters or a civil court for other matters. The court will adjudicate the case based on the evidence and testimonies presented.

4.    Resorting to Mediation or Arbitration
In some cases, mediation or arbitration can be used to resolve the financial dispute before resorting to the courts. Mediation is a process where a neutral third party (the mediator) helps the parties reach an amicable solution, while arbitration is a legal process in which an appointed arbitrator rules based on applicable laws.

Legal Mechanisms for Filing Financial Claims

1.    Saudi Enforcement Law
Under the Saudi Enforcement Law, a beneficiary of a judicial ruling can seek its execution through the Enforcement Court, where the debtor can be compelled to pay the due amount by means of asset seizure or property confiscation if necessary.

2.    Saudi Commercial Law
For commercial financial claims, the Saudi Commercial Law regulates the procedures related to commercial disputes, including debts arising from business activities. The commercial court verifies the legitimacy of the financial claim and determines the enforceability of the judgment.

3.    Saudi Labor Law
If the financial claim relates to the employment relationship between an employee and employer, such as salary dues, bonuses, or compensation, such claims are reviewed by the Labor Court, which specializes in labor disputes based on the applicable labor laws.

Penalties Related to Financial Claims in the Saudi Legal System

If the debtor fails to settle the due amounts despite a judicial ruling against them, they face legal penalties, including:

1.    Asset Seizure
If the debtor refuses to pay the owed amount, an order for the seizure of assets or property may be issued, whether real estate or bank accounts.

2.    Imprisonment
In cases involving breach of trust or financial fraud, the court may impose imprisonment penalties on the debtor.

3.    Financial Sanctions
The court may impose additional financial penalties on the debtor, such as late-payment fines on the outstanding amounts.

Conclusion

Financial claims in the Saudi legal system are sensitive legal matters that require knowledge of the laws and procedures followed in the Kingdom. It is important for individuals and companies to be aware of how to file financial claims and how to deal with courts to ensure they receive their rights. By using the appropriate legal mechanisms, such as Enforcement Courts, arbitration, or mediation, the affected party can pursue resolving their financial issue in a lawful and effective manner.