- Al Takhassousi, An Nakheel, Riyadh 12384
- info@al-tayyar.com.sa
- 0555398969
Case Study
Dispute Value
Recovery of Subcontract Payments and Release of Bank Guarantees Under a SAR 1 Million Contract
SAR 1,000,000
Disputes arising from subcontracting arrangements require careful review of contracts, completed works, payment certificates, and bank guarantees.In this matter, Atyar Advocates and Legal Consultants represented a private contracting company in a financial claim of approximately SAR 1 million after the counterparty failed to pay outstanding amounts and release the bank guarantees despite completion of the agreed works.The legal team established completion of the works, proved the client’s entitlement, and secured an order for payment of the outstanding amounts and return of the bank guarantee. After approximately two and a half years, the judgment was upheld by the Court of Appeal and fully enforced, resulting in recovery of the awarded amounts for the client.
Quick Matter Overview
Contract Value
Approximately SAR 1,000,000
Nature of the Contract
Subcontract
Subject of the Claim
Outstanding payments and bank guarantees
Duration of the Matter
Approximately two and a half years
Judicial Route
Commercial Court, Court of Appeal, and Enforcement Court
Outcome
Favourable Judgment & Full Recovery
Background of the Ownership Matter
The dispute arose from a subcontract worth approximately SAR 1 million, where the client completed the works but the counterparty failed to pay the outstanding amounts or release the bank guarantees. Atyar Advocates and Legal Consultants pursued a financial claim, supported by project records, payment certificates, and financial documents.After approximately five hearings, the court ruled fully in the client’s favour, ordering payment of the outstanding amounts and return of the bank guarantee. The judgment was upheld on appeal, and enforcement proceedings resulted in full recovery of the awarded amounts.
Contract Value
Nature of the Works
Subcontracting works
Subject of the Dispute
Non-payment and withheld bank guarantee
Key Evidentiary Issue
Nature of the Contractual Dispute
The dispute centred on payment rights arising from performance of a subcontract, together with the counterparty’s failure to release the bank guarantees connected with the contract.
The principal matters addressed included:
- Reviewing the subcontract.
- Reviewing the scope of works performed.
- Examining the project payment certificates.
- Establishing completion of the agreed works.
- Identifying the outstanding financial entitlements.
- Reviewing the legal position of the bank guarantees.
- Responding to the denial of the main contractor’s approval of the payment certificates.
- Preparing the financial claim
- Drafting pleadings and legal memoranda.
- Representing the client before the Commercial Court.
- Following the judgment before the Court of Appeal.
- Enforcing the judgment and recovering the client’s full rights.
Essential Elements of the Dispute
Subcontract
Reviewing the contractual obligations governing the relationship and identifying each party’s rights and responsibilities.
Completed Works
Establishing that the client performed the works required under the subcontract, forming the basis of the financial claim.
Payment Certificates
Reviewing the payment certificates and related documents and connecting them to the amounts claimed.
Bank Guarantee
Assessing the contractual and legal basis for seeking release and return of the bank guarantee.
Outstanding Payments
Establishing the sums due as a result of the completed works and the counterparty’s failure to pay.
Enforcement of the Judgment
Following the judgment through enforcement until the bank guarantee was returned and the awarded amounts were recovered in full.
Key Legal Challenges
Proving Completion of the Subcontract Works
It was necessary to establish that the client had performed the works required under the subcontract. This formed the principal basis for claiming both the outstanding payments and the related contractual rights.
Dispute Over the Payment Certificates
The counterparty denied that the main contractor had approved the relevant payment certificates, requiring detailed review and presentation of the available documents and factual circumstances.
Recovery of the Bank Guarantee
The dispute concerned not only unpaid financial entitlements but also a bank guarantee that remained unreleased after completion of the works. It was therefore necessary to establish the legal and contractual basis for its return.
Establishing the Full Financial Entitlement
The completed works, payment certificates, and amounts claimed had to be linked clearly before the Commercial Court.
Multiple Debts Against the Judgment Debtor
The enforcement stage was complicated by multiple outstanding debts against the judgment debtor, creating additional difficulty in recovering the awarded sums.
Achieving Full Recovery
The final challenge was converting the successful judgment into actual recovery. Enforcement continued until all awarded amounts were recovered and delivered to the client.
Our Legal Strategy
eviewing the Contract and Supporting Documents
The engagement began with review of the subcontract, payment certificates, project documents, and materials relating to the bank guarantee.
Establishing Completion of the Works
The available facts and evidence were organised to demonstrate that the client had completed the agreed works.
Addressing the Payment Certificate Dispute
A legal and evidentiary response was prepared to address the counterparty’s denial regarding the main contractor’s approval of the payment certificates.
Building the Financial Claim
The subcontract, completed works, payment certificates, bank guarantees, and outstanding amounts were integrated into a structured claim before the Commercial Court.
Managing the Litigation and Appeal
The matter was litigated until judgment was obtained in full, and the judgment was then defended before the Court of Appeal until it was upheld.
Enforcement and Recovery
Enforcement was pursued despite the judgment debtor’s multiple outstanding liabilities until the full rights and amounts awarded were recovered and delivered to the client.
Legal Services Provided
Legal Advice
Providing advice concerning the subcontract, outstanding payments, bank guarantees, and the appropriate legal route for recovery.
Comprehensive Legal Study
Reviewing the subcontract, payment certificates, facts, supporting documents, and the client’s legal position.
Litigation
Managing the claim and representing the client in establishing entitlement to the disputed payments and bank guarantee.
Representation Before Authorities
Representing the client throughout the judicial and enforcement stages of the matter.
Drafting Legal Memoranda
Preparing the legal memoranda and responses required to support the client’s case.
Drafting Pleadings
Preparing the statement of claim, objections, and other submissions required throughout the proceedings.
Legal Insight
In subcontracting disputes, entitlement to payment is closely connected to evidence of completed works and the documentation recording project progress and payment certification.The matter becomes more complex where outstanding payments are combined with continued retention of bank guarantees* after the works have been completed.A favourable judgment is also not the practical end of a dispute unless enforcement is pursued until the amounts and guarantees awarded by the court are actually recovered.
Legal Value Delivered to the Client
- Established completion of the subcontract works.
- Established entitlement to the outstanding financial amounts.
- Obtained a judgment requiring return of the bank guarantee.
- Obtained judgment for the client’s full financial entitlements.
- Preserved the judgment through the appellate stage.
- Enforced the judgment and recovered the client’s full rights and awarded amounts.
The Firm’s Experience in Construction Disputes and Bank Guarantees
Atyar Advocates and Legal Consultants provides legal services in construction disputes, subcontracting matters, and financial claims arising from project execution.The firm’s services include reviewing contracts, payment certificates, and bank guarantees, assessing completion of works and entitlement to payment, and preparing claims, pleadings, and legal memoranda.The firm also represents clients before the Commercial Courts, manages matters through the appellate stage, and pursues enforcement until the financial rights awarded by the court are recovered.
Legal Team Responsible for This Matter
Prof. Dr. Turki Al-Tayyar
Founder and Managing Partner, and an expert in the judiciary, legal practice, arbitration, and university education, with more than 25 years of combined experience.
Mr. Salem Saad Al-Dosari
Partner specialising in administrative contracts, investment, and litigation, with extensive experience in administrative and commercial cases.
Practice Areas Related to This Matter
- Real Estate Dispute Resolution
- Property Ownership Claims
- Litigation Before the General Courts
- Investment Disputes
- Government Contracts and Administrative Matters
- Compensation Claims
Need Legal Support to Recover Subcontract Payments or Bank Guarantees?
If your company has completed subcontract works but has not received its outstanding payments or the relevant bank guarantees have not been released, Atyar Advocates and Legal Consultants provides legal advice, legal study, litigation, drafting, appellate representation, and judgment enforcement services throughout Saudi Arabia.
جاهز لحماية حقوقك أو تطوير أعمالك؟
تواصل معنا اليوم واحصل على استشارة قانونية موثوقة
سواء كنت فردًا تبحث عن تمثيل قانوني موثوق أو شركة تحتاج إلى دعم قانوني متخصص، نحن في شركة أطيار للمحاماة والاستشارات القانونية جاهزون لمساعدتك. دعنا نكون شريكك القانوني في كل خطوة، بخبرة تتجاوز 23 عامًا في الأنظمة السعودية.
بيانات الاتصال
- شارع التخصصي، النخيل، الرياض 12384
- 3132 شارع الأمير تركي، الكورنيش، 6309, الخبر
- Info@al-tayyar.com.sa
- 00966555398969
مجالات الممارسة
القانون التجاري والشركات
صياغة العقود والوثائق القانونية
القانون المالي والمصرفي
الضرائب والزكاة والجمارك
العقارات والملكية الخاصة
© 2025 All Right Reserved Al Tayyar Leagal company