Knowledge Series Volume III: Execution against the Property of Physical & Juristic Persons

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Our previous volume in the Raees + Co Knowledge Series (Volume II) supplemented the general provisions introduced under Chapter One of Decree Law No. 22/2021...
Bahrain Real Estate and Construction
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Our previous volume in the Raees + Co Knowledge Series (Volume II) supplemented the general provisions introduced under Chapter One of Decree Law No. 22/2021 on the Issuance of the Law of Execution in Civil and Commercial Matters ("Execution Law" or "the Law"). In this volume, we address the provisions which apply exclusively to individuals and juristic persons.

Attachment of the Property of the Debtor

The efficiency of the Execution Law is best exemplified through the implementation of automatic measures introduced through execution against assets of the debtor, relative to property, monetary & movable assets. Article 29 of the Law outlines that under the new procedures of the Court, automatic attachments will be made against the property of the debtor, after the filing of an application of execution ("Execution Application"). These attachments include, but are not limited to, bank accounts, property (within the limits of the Execution Deed), movables, and real estate. We delve into this more deeply later in this Volume.

Proportional Value of Property Against the Execution Deed

Once property of the judgement debtor has been attached, the burden of proof is borne by the same entity to demonstrate that the value of the property exceeds the subject matter of the execution deed and can suggest the lifting of any execution against his property. This will only be permissible, at the discretion of the Judge of the Court of Execution, if the lifting of attachment does not prejudice the speed of the execution, whilst also not hindering the guarantee of the full payment of debt owed by the debtor. Both the judgement debtor and creditor are reserved the right to appeal the decision of the Judge of the Execution Court and have seven days to do so following the issuance of the decision relative to the lifting of the attachment of property.

The automatic attachment of property is an effective means of expediting the execution process, as well as pressurising judgement debtors into paying the debt owed by them. Previously, this application would be undertaken by the judgement creditor, and inherently involved a degree of bureaucratic procedure which only served to hinder the efficiency of filing an execution claim altogether.

Instruction & Asset Disclosure

As a way of preventing the misappropriation of funds of the judgement debtor, and in order to guarantee the full payment owed, the Law introduces under Article 32 an "instruction" provision which allows the judgement creditor, at any time, to instruct the Judge of the Execution Court as regards to any funds of the judgement debtor. This includes any funds which are in the possession of the judgement debtor, or in the possession of any of their affiliates. The instruction of the judgement creditor permits the Execution Court to order the affiliates of the judgement debtor to disclose any properties under the ownership of the judgement debtor at the time of the filing an Execution Application, in addition to any funds transferred as of the date of the filing, achieving the purpose of full disclosure of assets.

This inclusion once again serves to, not only expedite the execution process and the full payment of debt, but also aims to prevent any potential of the judgement debtor of 'hiding' their assets once an execution claim has been filed against them. This is a welcomed move by the Legislature and should result in an increased rate at which execution debts are repaid.

Rules & Procedures for the Sale and Distribution of the Judgement Debtor's Funds & Assets

On 17 February 2022, the Ministry of Justice issued several ministerial resolutions on various elements of the Execution Law.

Resolution No. 23/2022 on the Specification of the Rules and Procedures for the Attachment, Sale and Distribution of Proceeds for Real Estate was enacted pursuant to Article 33 of the Execution Law. It stipulates that where the creditor seeks execution on an amount exceeding BHD10,000, the Execution Court automatically imposes an attachment onto any real estate. This means that no transfer or disposal of the property may occur, and the property is later subject to sale via public auction. The debtor is notified by the Execution Court at least ten days prior to the auction of the property. Where the creditor seeks an amount less than BHD10,000, the Execution Court automatically imposes the attachment onto the real estate after fifteen days following acceptance of the creditor's Execution Application.

Resolution No. 25/2022 on the Specification of Rules and Procedures for the Attachment, Sale and Distribution of Proceeds for Chattels and Moveable Property covers those assets which are not considered real estate ("Resolution No. 25/2022"). It introduces attachment procedures where the Execution Court automatically attaches movables owned by the debtor after acceptance of the Execution Application. This is a welcome development as previously attachment measures would occur manually upon the creditor's request under the Execution File which may or may not be approved by the Execution judge.

Resolution No. 25/2022 specifies the movables that can be attached as follows:

  • Vehicles owned by the judgement debtor if the value under the Execution Deed exceeds BHD300;
  • Shares and bonds owned by the judgement debtor if the value under the Execution Deed exceeds BHD10,000;
  • Revenues and shares of the judgement debtor; and
  • In circumstances apart from the above, the attachment is imposed automatically after the lapse of fifteen days from acceptance of the Execution Application.

For the avoidance of doubt, 'stocks' under (2) above refers to shares that may be held in other companies, whereas 'shares' under (3) refers to the shares that are specified under the company's commercial register (ie – shares of the company debtor itself).

Any other movables shall automatically be attached after forty-five days from the date of acceptance of the Execution Application. Moreover, the judge of the Execution Court may order the attachment of any other movables when deemed necessary.

Initiating Procedures for the Sale of Property through Public Auction

The Law confirms the previous procedure of the Execution Court relative to the auction of attached properties via public auction in Article 34. Under the new Law, the judgement debtor will be notified of the decision to list the attached property for public auction, at least ten days prior to the auction of said property. The decision to sell the property may be subject to appeal, only by the judgement debtor, if one of the following reasons is satisfied:

  • The sale concerns a property that is not owned by the judgement debtor.
  • Impermissibility to sell the property by law.
  • Existence of rights over the property equal to or exceeding its value.
  • The existence of other funds that repay the entire debt and do not prejudice the speed of execution and guarantees for the full payment of the debt in accordance with Article 30 of the Law (Proportional Value of Property Against the Execution Deed).

In accordance with Resolution No. 25/2022, the judgement debtor shall pay his debt within a period of seven days from the date of him receiving the report of attachment on his property. In the case where the judgement debtor has not paid the full debt owed within the prescribed period, the attachment report will be presented to the Execution judge to which an order will follow specifying the date, place, and the basic amount of price for the sale. Following such action, the property will be put on public auction and will be sold to the highest bidder. The auction may be postponed if it appears that there are no bidders, or that the submitted bid is less than the basic price by more than 25%, or for any other reason deemed by a judge.

Distribution of Proceeds

If it becomes clear that there is more than one execution request against the judgement debtor, then such matter shall be presented to the judge of the execution court to distribute the proceeds of the sale among the creditors according to their rank under the law and in the case of equal rank, the funds will be distributed among them if they are sufficient, as introduced in Resolution No. 25/2022.

Filing an Appeal

Any party in relation to such execution, may file an appeal against the decisions issued by the judge of the Execution Court to the High Court within seven days from the date of his notification or from his knowledge. Pursuant to Article 37 of such Law, the decisions that may be appealed are the following:

  • The attached property does not belong to the debtor in whole or in part;
  • The attached property has other existing rights equal to or exceeding its value;
  • The property cannot be sold legally; and
  • The attachment on the debtor's assets such as the bank accounts, monthly salary, income, or any other payments is greater than what is currently available with the debtor.

The appeal in such case is of an urgent matter filed directly to the High Court after settling the prescribed fees, to which such decision shall be deemed final.

Issuance of Travel Bans against Judgement Debtors

Article 40 introduces the procedure of travel bans being issued against the judgement debtor if there is a fear that the judgement debtor may flee the Kingdom with the aim of evading the execution amount owed, and his assets not being sufficient to pay the debts owed. Within this circumstance, the judgement creditor, may request the Judge of the Execution Court order that the judgement debtor be barred from travelling. The period for which the ban is active will be no greater than three months, renewable for similar periods, a maximum of three times. Once a travel has been issued, grievances may be filed against the order before the Judge of the Execution Court, within seven days from the date of notification.

In the event that periods referred to above have lapsed, the travel ban shall be lifted without renewal.

Annotating the Credit Register of the Judgement Debtor

One of the new features introduced by the Execution Law is an annotation of the judgement debtor's credit register. Article 42 of the Law outlines that this annotation will be effective for a period of seven years. The annotation shall not be removed except in events of the settlement of the full debt, or the expiry of the annotation period.

The primary objective of this new addition to the Law is that it seeks to protect potential future creditors from the possibility of a business relationship with the judgement debtor, while simultaneously serving to protect the debtor themselves through by preventing over indebtedness.

Resolution No. 21/2022 on the Procedure of Annotating the Debtor's Credit Register indicates the debtor's credit register refers to the record of the debtor's financial obligations, the credit facilities granted to the same, sales on credit and by instalments, and any fees, fines, and instalments due to government bodies. In accordance with Article 2 and 3 of the Resolution, where the debtor has insufficient funds to meet his obligation towards the creditor, the Execution Court shall issue an order on the relevant credit information centre to place an annotation on the debtor's credit record for a period of seven years indicating the total amount subject to execution including any court fees and interest. This is likely to help future potential creditors of become aware of the extent of the debtor's obligations, and it is apparent that this achieves the main objectives of the Law in preventing the over-indebtedness of the debtor and to protect future creditors.

Monitoring Debtor's Assets

A judge of the Execution Court shall instruct the necessary authorities to notify him immediately of any transactions connected to the debtor's finances in the case of any change in the debtor's financial solvency if the debtor's assets are insufficient to pay the dues under the Execution Deed. The Survey and Land Registration Bureau, the CBB, Bahrain Bourse, and the General Directorate of Traffic and Commercial Register are among these authorities. Based on the circular of the Judge of Execution Court of funds in favor of the debtor, the MOJ may issue a decision to add other agencies to perform direct attachment.

As a result, the Execution Law aims to emphasize the need of working together with various public entities and governmental authorities to unearth other assets that the debtor may not have reported. This step, together with other processes adopted by the Law, may provide a more powerful regime that can aid debtors in obtaining their dues under the Execution Deed, as the Shura Council also believes.


The introduction of the Execution Law is designed to not only introduce the procedure of the Court of Execution in written form, but also streamline the process of execution relative to receiving the owed amount from the debtor. The provisions of this Law bring clarity to both parties involved in an execution process and will also expedite the process of the same. The following Volume in the Raees + Co Knowledge Series shall examine the provisions which apply to both individuals and commercial companies and comment on the most significant implications of the same.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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