SCA 34217641/2013
Type
Case
Court
Saudi Arabian Court of Appeal
Jurisdiction
Saudi Arabia
Taxonomy
General Insolvency Law
Copyright
LexisNexis
Decision date
1 Apr 2013
Catchwords
Insolvency – Sale Agreements – Referred Payments
Following the purchase of a car, the purchaser referred the seller to a third party who was to pay the outstanding amount. This person was insolvent. The key issue was whether payments can be referred to another.
Background
A seller filed a case (Case No. 32604132 Folder No. 33394384 on 16/07/2012) against a buyer who had bought a car from him but failed to pay the price and instead referred the seller to another person who he claimed was to pay. However, the person he was referred to, was insolvent. The buyer objected and said that there was no insolvency ruling against the person he had referred the payment to. The seller asked the court to request the buyer pay the money instead.
The court ruled that the referral of a payment to another person is invalid and requested the buyer to pay the full amount to the seller.
Decision
The Court of Appeal (SCA) Fifth Directorate of Riyadh Appeal Court ratified the ruling.