A company submitted a request to initiate liquidation proceedings against a defendant company.

The court issued a ruling to initiate the liquidation proceedings against the defendant company and appointed provisional liquidators.

The liquidator requested the court to oblige both the debtor and the other party to return a cheque amount that the debtor had issued in favour of a third party in agreement with the bank, as the cheque's date fell within the liquidation period, and therefore the debtor was not entitled to dispose it.

The court stated that Article 100(3) of Saudi Arabia Cabinet Decision No. 264/1439 stipulated that any transaction carried out by the debtor on any of the estate assets after the appointment of the liquidator was considered to be null and void and that court had the authority to order the recovery of those assets from third parties, taking into account the rights of third parties (in good faith). The affected party had the right to file a claim for compensation according to the article.