A debtor had applied to the court requesting the start of the administrative liquidation process for his company because its debts had accumulated and a number of enforcement rulings had been issued against it. He had also stated that he was unable to continue his commercial activities and was unable to pay the debts.

The court said that Article 170 of Saudi Arabia Cabinet Decision No. 264/1439 stipulated that in order for the court to accept the request from the debtor to start the administrative liquidation process, he must be insolvent or bankrupt, and the court must establish that he was unlikely to be able to continue his business. The debtor must not have acted in bad faith or with the intention of abusing the process.

The documents of the case showed that the debts had accumulated after the expiry of the licence for the commercial activities, which meant that the debtor had not complied with the law and had not protected the monies of the creditors.