Al Madani & Co. Law Firm & Legal Consultants

Exceptional Cases Where Seizure of the Debtor's Assets is Prohibited Under the Saudi Legal System

Forced execution is one of the fundamental legal tools that enable creditors to recover their rights when a debtor refuses to fulfill their obligations. However, to uphold the principle of social justice, the Saudi legal system strikes a balance between creditors’ rights and ensuring a minimum standard of dignified living for debtors. Consequently, the Saudi legislator has established strict rules prohibiting the seizure of certain assets, even in the presence of enforceable instruments, to protect debtors from complete financial hardship and to ensure their continued livelihood without severe harm.

Understanding these exceptions is not limited to debtors alone; it is equally essential for creditors, lawyers, and legal practitioners. It helps them assess the scope of legal execution and avoid claims that may be unenforceable. This article highlights the cases in which the debtor’s assets cannot be seized under the Saudi Execution Law, clarifies the role of the enforcement judge and relevant authorities, and outlines the legal procedures available for objecting to seizure orders.

First: Assets Exempt from Seizure Under the Saudi Execution Law

The Saudi legal system places significant emphasis on protecting the debtor and their family’s basic livelihood. Therefore, a legal framework has been established to prevent the seizure of certain properties and assets, even in the presence of judicial rulings requiring enforcement. This approach reflects the legislator’s commitment to achieving a balanced equation that guarantees creditors’ rights while safeguarding the debtor and their family from severe harm. The Saudi Execution Law specifies a set of assets and entitlements that cannot be seized under any circumstances.

1. Assets Necessary for the Debtor’s Livelihood and That of Their Family

The Saudi legal system ensures the debtor’s and their family’s minimum standard of living by exempting certain assets from execution. These include:

• Primary Residence: The primary home of the debtor and their family cannot be seized if they rely on it for housing unless it is mortgaged or the loan remains unpaid.
• Basic Personal Belongings: Essential personal items such as personal tools, clothing, and necessary household furniture are exempt from seizure.
• Private Vehicle: A debtor’s vehicle is protected if it is essential for transportation or work unless it is subject to a mortgage or a legitimate financial claim.

2. Salary and Financial Entitlements

The entirety of the debtor’s salary cannot be seized. Instead, a specified percentage determined by the enforcement judge may be deducted, ensuring that the debtor retains an amount sufficient to meet basic living needs. Additionally, retirement pensions and social assistance payments are exempt from execution, as they are intended to guarantee the debtor and their family a dignified life.

3. Endowments and Assets Allocated for Specific Purposes

Among the assets that cannot be seized are:

• Charitable Endowments (Waqf): These are designated for religious or charitable purposes and are protected from execution to preserve their intended purpose.
• Public and Government-Owned Funds: Assets belonging to government entities or municipalities are also immune from seizure.

4. Government Compensation and Assistance

• Compensation for Bodily Injury or Personal Damages: These funds are exempt as they serve as restitution for harm suffered by the debtor.
• Government Grants and Social Aid: Welfare payments, such as social security benefits and housing support, are protected from seizure to maintain social stability.

Second: Other Exceptional Cases Preventing Execution Against the Debtor’s Assets

Certain circumstances may hinder the execution of seizure orders, including:

• Proof of Financial Hardship: If the debtor can demonstrate an inability to pay, the judge may suspend execution upon receiving clear evidence.
• Judicial Grace Periods: A judge may grant the debtor a timeframe before execution, particularly if immediate seizure would cause significant harm to them or their family.
• Ongoing Legal Disputes: If the assets in question are subject to a pending court case, they cannot be seized until the dispute is conclusively resolved.

Third: The Role of the Enforcement Judge in Determining Seizable Assets

The enforcement judge is responsible for reviewing execution requests submitted by creditors, assessing the debtor’s financial assets, and determining their eligibility for seizure. The judge considers legal exemptions such as the debtor’s primary residence and essential income. If the debtor claims their assets are protected from execution, they must provide sufficient evidence, which the judge will evaluate before issuing a ruling.

Fourth: Other Authorities Involved in Execution Procedures

If a seizure order is issued against a debtor’s assets, the debtor has the right to appeal before the Court of Appeal if they believe the decision is unfair or that the targeted assets are legally exempt. Additionally, certain assets—such as salaries, pensions, and government aid—are subject to special regulations by relevant authorities, including the Ministry of Human Resources and Social Development and the General Organization for Social Insurance.

Fifth: Procedures for Identifying Assets Exempt from Execution

Execution proceedings begin when a creditor submits a seizure request to the Execution Court. The debtor’s financial assets are then reviewed by relevant agencies such as the Saudi Central Bank (SAMA) and the Ministry of Justice. If the debtor objects to the seizure by claiming their assets are exempt, the enforcement judge examines the provided evidence and issues a final ruling on whether the seizure is permissible. Either party may challenge the decision through the available legal channels.

Conclusion

The Saudi Execution Law seeks to balance the protection of creditors’ rights with ensuring a minimum standard of dignified living for debtors and their families. By exempting essential assets from seizure, the system upholds principles of justice and humanity, reinforcing confidence in the Saudi judicial system and ensuring fair treatment for all parties.

If you require legal consultation regarding execution and asset seizure cases, do not hesitate to contact us. At Al-Madani & Co., we provide specialized legal services to protect your rights and ensure compliance with Saudi regulations and legislation.