Whom should an unpaid subcontractor pursue?

Trace the contracting party, any assignment and direct receipts when recovering a subcontract balance.

Sources reviewed

The Saudi legal rule

The main contractor remains responsible to the owner after subcontracting. A subcontractor cannot claim for itself sums the owner owes the main contractor unless the latter refers it to the owner by assignment. Examine any separate direct undertaking on its own terms. [1]

What the records establish

Collect the subcontract, completion certificates and the main contractor’s ledger. If the owner made a direct payment, inspect the instruction and accounting entry to see whether it concerned a single certificate. For an alleged direct undertaking, establish who signed or sent it and for whom. Read the operative wording to distinguish a payment commitment from confirmation of quantities. [4]

Likely defence and next step

The owner’s engineer may only have verified quantities. Distinguish measurement records from an assignment document. Claim the balance from your contracting party and disclose any direct receipts.

Applicability on 2026-10-30

Published on 19 June 2023, the law took effect on 17 December 2023. [2][3] It applies to commercial transactions where compatible with their nature and no special commercial provision governs. For earlier events, check whether a party invokes a conflicting applicable provision or judicial principle, or a time bar had already begun to run before commencement. [2]

Sources

  1. نظام المعاملات المدنية | Saudi Civil Transactions Law 473–474
  2. مرسوم الإصدار ونفاذ النظام | Promulgation and commencement Royal Decree M/191, clauses V–VI; Civil Transactions Law, art. 721
  3. أم القرى | Official Gazette Cabinet Resolution 820, publication on 1444-12-01 AH
  4. نظام الإثبات | Evidence Law 29–30

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