Recovering Debts From Saudi Customers: A Guide for Foreign Companies

Start with the contract

Check three clauses first:

1. Dispute resolution. Does the contract refer disputes to Saudi courts, foreign courts, or arbitration? If there is a valid arbitration clause and the defendant relies on it, a Saudi court will not hear the dispute.
2. Governing law. Which law did the parties choose?
3. Payment security. Did the customer provide a cheque, a promissory note, a bank guarantee or a letter of credit?

If the contract is silent on disputes, a claim can generally be brought in Saudi Arabia, where the customer and its assets are.

Route 1: Claim in Saudi Arabia

Claiming directly in Saudi Arabia often gives the most direct path to enforcement, because the judgment is local and the customer's assets are here. See How to Sue a Company in Saudi Arabia.

Filing time limits depend on the claim and the applicable law. An acknowledgment of the right or an excuse accepted by the court may matter, but do not rely on an exception. Check the deadline and act promptly.

A foreign company can appoint a Saudi lawyer under a power of attorney. Most court sessions are held remotely, so your team does not need to travel.

Route 2: A foreign judgment or arbitral award

If you already have a judgment from your home courts, or an arbitral award, it can be enforced in Saudi Arabia through the enforcement court. This is subject to the conditions of the current Enforcement Law.

Under the Enforcement Law, a foreign judgment is enforced on the basis of reciprocity, without prejudice to the Kingdom's treaty obligations. It must also meet listed conditions, including:

• the dispute is not one that only Saudi courts may hear;
• the parties were duly summoned, represented and able to defend themselves;
• the judgment is final;
• it does not conflict with an earlier Saudi judgment on the same subject;
• it does not violate Saudi public policy.

Foreign arbitral awards are also covered by the Enforcement Law. See Enforcing Foreign Judgments and Awards.

Route 3: Direct enforcement of an executive instrument

Some documents can go straight to the enforcement court without a lawsuit. They include:

• cheques;
• bills of exchange and promissory notes registered on the national electronic platforms;
• attested contracts and acknowledgments;
• judgments and arbitral awards.

If you are agreeing new credit terms with a Saudi customer, ask for security in a form that counts as an executive instrument. See Bounced Cheques and Promissory Notes.

What evidence you will need

• the signed contract or the accepted purchase order;
• commercial invoices, bills of lading and delivery or acceptance records;
• the statement of account, and any email in which the customer confirms the balance;
• the customer's commercial registration details;
• for foreign judgments or awards: the judgment or award and proof that it is final.

Documents in a foreign language will normally need an Arabic translation for the court.

Example: A German valve manufacturer supplied equipment worth EUR 420,000 to a contractor in Jubail. The contract has no arbitration clause, and the contractor's procurement manager confirmed the outstanding balance by email. The manufacturer appoints a Saudi lawyer, sends a formal demand, and files a claim in Saudi Arabia, relying on the invoices, the delivery records and the email acknowledgment.

For Saudi buyers

If you dispute the quality or quantity of goods, raise it in writing at delivery or inspection, with specifics. Statements of account and payment plans can amount to acknowledgments of the debt.