What Is Direct Enforcement? Why Does It Matter to Companies? What Are the Consequences of Non-Compliance?
“Direct enforcement” constitutes one of the most important issues for companies in Saudi Arabia, especially amid the expanding role of Enforcement Courts and the strict application of mandatory enforcement procedures. While many HR managers and corporate executives assume that enforcement relates only to financial claims, non-financial obligations—particularly the delivery of documents—have become a major source of enforcement disputes in the business sector.
In this article, Al-Salamah Law Firm explains what direct enforcement is, why it matters to companies, and what consequences arise from failing to comply.
Table Of Content
What Is Direct Enforcement?
Article 1 of the Enforcement Law defines enforcement disputes as:
(“Claims arising from enforcement proceedings, relating to the validity of such proceedings, raised by the parties to the enforcement case or others.”)
Although the Saudi legislator did not explicitly define direct enforcement, jurists describe it as the second method of compulsory enforcement, where the creditor obtains the actual performance that the debtor is obligated to deliver—regardless of its nature—even if the obligation involves doing an act or refraining from one.
What Is Direct Enforcement for Companies?
Direct enforcement simply means compelling the judgment debtor (the company) to perform a specific act stated in the enforceable instrument (the judgment).
When the obligation is an act that only the debtor can perform—such as delivering copies of documents held by the company—this type of obligation is enforced directly, not through attachment, sale, or financial measures.
Enforcement judges in courts across Saudi Arabia, including Riyadh and Jeddah, have broad powers to compel entities to comply. These begin with Article 34 (notifying the company and granting a five-day grace period), and escalate to more severe actions such as Article 46, which orders the suspension of financial transactions. They may also impose daily fines under Article 70, up to 10,000 SAR per day, increasing over time, and may even include prohibition from dealing with government entities if non-compliance continues.
Why Is Direct Enforcement Important for Companies?
The significance of direct enforcement lies in the fact that non-financial obligations may appear simple, but can turn into serious enforcement liabilities if not handled promptly and professionally.
For example, delivering a copy of certain documents requested by the creditor may, if delayed, result in accumulating daily fines over weeks or months. In some cases, this can reach very large amounts—such as 10,000 SAR per day for six months, resulting in 1,800,000 SAR.
Many companies do not realize that the enforcement judge has the authority to impose a “coercive fine” for each day of delay to force compliance—turning a simple sheet of paper into a major financial disaster.
What distinguishes these obligations is that failure to comply is not merely a violation—it is considered “refusal to comply,” triggering mandatory intervention by the enforcement judge. The company must also prove compliance clearly and verifiably.
If compliance is not achieved—or cannot be proven—companies face multiple legal measures, including:
- daily fines
- service suspension
- freezing of bank accounts
- prohibition from dealing with government agencies
- possible liability of the company’s representative in persistent cases
Prompt handling of such obligations is therefore essential to protect the company from escalating enforcement risks.
Digital transformation further increases the impact of direct enforcement. Because electronic documents can be sent easily via email and are considered an acceptable means of compliance, companies can avoid enforcement measures simply by documenting that they delivered their obligation properly and on time.
How Is Non-Financial Direct Enforcement Executed in Companies?
Article 9 of the Enforcement Law provides that direct enforcement is carried out pursuant to an enforceable instrument for a due and certain obligation. Enforceable instruments include:
1. Court judgments, decisions, and orders
Example:
A labor court issues a judgment ordering a company to deliver an experience certificate and original academic certificate to a former employee. The company ignores the judgment. The employee files for enforcement. Due to the company’s delay, the judge imposes a coercive fine of 1,000 SAR per day.
After three months, the company is required to pay 90,000 SAR, not to the employee, but as a state penalty (or compensation) for withholding a document.
2. Arbitral awards bearing an enforcement order under the Arbitration Law
Example:
An arbitrator orders a construction company to deliver final project drawings to the owner. The technical department delays preparing them for two months. The owner files for enforcement, and daily fines accumulate for depriving the owner of using the building. The obligation to deliver a “paper drawing” turns into significant financial compensation for loss of use.
3. Settlement minutes issued by competent bodies or certified by courts
Example:
Two companies agree in an electronic settlement (e.g., via the “Taradhi” platform) that Company A will remove its advertising boards from a shared site within ten days. The branch manager downplays the issue and delays. Company B submits the settlement as an enforceable instrument. The enforcement judge may impose daily fines and use compulsory force to remove the boards at the defaulting company’s expense—at a higher cost.
4. Commercial papers
Although commercial papers are financial in nature, the judge may require the delivery of the original cheque or promissory note after settlement or during substantive dispute.
If Company A pays Company B the value of a promissory note and requests the original document to destroy it, and Company B delays or claims it is “lost,” Company A may request enforcement. Daily fines may be imposed to compel Company B to deliver the document establishing the debtor’s discharge.
5. Notarized contracts and authenticated instruments
Example:
A company’s Articles of Association stipulate that the manager must provide a partner with access to the financial statements within one week of request. The partner submits the request; the manager ignores it. The authenticated contract becomes an enforceable instrument. The partner approaches the enforcement court to compel document disclosure. Delay may result in daily fines imposed on the company—or even on the manager personally.
6. Foreign judgments, orders, arbitral awards, and authenticated documents
Example:
A London court issues a judgment requiring a Saudi company to cease using a specific trademark, and the conditions for enforcement in Saudi Arabia are satisfied. The company continues using the mark. This constitutes “failure to comply with a prohibitory act.” The enforcement judge will impose severe daily fines, potentially reaching millions, given the scale of the international commercial harm.
7. Ordinary documents whose contents are fully or partially acknowledged
Example:
A CEO sends a letter to a supplier stating: “We acknowledge that we retain 500 units of your goods in our warehouse and will return them next week.” If the company acknowledges this before the judge, the letter becomes an enforceable instrument. Delay in returning the goods triggers coercive fines.
8. Contracts and other documents given executive force by law
Example:
A company leases premises under a financing contract requiring immediate evacuation upon default. The company defaults but refuses to vacate. The contract is a direct enforceable instrument. Delayed surrender of the premises may result in fines equal to or exceeding the rent, plus compulsory enforcement costs.
FAQs
What is the Enforcement Law in Saudi Arabia?
Enforcement is governed by the Enforcement Law of 1433H, the Law of Sharia Pleadings, and other related regulations.
Who is authorized to carry out enforcement in Saudi Arabia?
The Enforcement Judge has authority over compulsory enforcement and supervises its procedures, supported by enforcement officers. The judge decides all enforcement disputes—regardless of their value—according to summary proceedings, and issues all related orders and decisions.
Can direct enforcement against a company include service suspension?
Yes. Service suspension may be requested against companies that fail to fulfill their obligations—except for services related to healthcare, education, employment, commercial registration, and civil status documentation.
Conclusion
Companies that understand the concept of direct enforcement and manage their non-financial obligations with legal awareness can avoid significant enforcement risks, protecting their reputation and maintaining the trust of clients and government entities.
However, companies that delay or neglect these obligations may face unexpected and substantial enforcement claims—even though the solution was initially simple.
At Al-Salamah Law Firm, we provide leading legal services to manage such non-financial obligations preventively, and to handle enforcement procedures, prove fulfillment, and file necessary enforcement disputes. Proper handling of non-financial obligations has become an essential element of legal governance in every organization.
