The petition for a liquidation procedure and the administrative liquidation procedure: a comparative analysis study in Saudi and UK insolvency law

Abstract

Purpose

This paper aims to analyse and compare the petition for liquidation and administrative liquidation procedures within Saudi and UK insolvency law. It explores how Sharia principles shape insolvency practices and examines critical elements such as creditor rights, asset management and the prioritization of claims. By highlighting the procedural differences and their implications for stakeholders, this study seeks to uncover the effectiveness and fairness of each system. Ultimately, this comparative analysis aspires to contribute to a deeper understanding of how insolvency frameworks influence economic recovery and stakeholder protection in varying legal contexts.

Design/methodology/approach

This study uses a comparative analysis approach, drawing from legal texts, academic literature and case law in both Saudi Arabia and the UK. It includes a thorough examination of insolvency statutes, court rulings and procedural frameworks, identifying key differences and similarities. Empirical data regarding insolvency outcomes, such as process duration and creditor recovery rates, will be assessed to evaluate each system’s effectiveness. This methodology aims to provide a comprehensive understanding of insolvency procedures while integrating both theoretical frameworks and practical examples to enrich the analysis.

Findings

The findings reveal significant differences in how the petition for liquidation and administrative liquidation procedures are implemented in Saudi Arabia and the UK. Saudi insolvency practices are deeply influenced by Sharia principles, emphasizing fairness and creditor−debtor relationships. In contrast, the UK framework showcases a more commercial approach. This study identifies leadership roles and procedural transparency as critical factors affecting stakeholder outcomes. Overall, the analysis underscores the necessity for continuous improvement in both jurisdictions to enhance the effectiveness and fairness of insolvency proceedings, promoting better economic recovery.

Research limitations/implications

This study’s limitations include its focus on specific legal frameworks, which may restrict the generalizability of findings to other jurisdictions. The reliance on qualitative data from selected cases might not capture the full spectrum of insolvency practices in Saudi Arabia and the UK. Future research is encouraged to test the proposed insights in broader contexts and examine the influence of emerging legal reforms on insolvency practices. In addition, interdisciplinary studies could further enrich the understanding of how cultural and economic factors shape insolvency law.

Practical implications

The comparative analysis provides practical insights for legal practitioners, policymakers and stakeholders involved in insolvency proceedings. Recommendations include enhancing procedural transparency, improving creditor engagement and fostering a balanced approach to liquidation and restructuring. By understanding the unique characteristics of each system, stakeholders can better navigate insolvency processes, ultimately promoting fair treatment and improving recovery outcomes. This study also highlights the importance of aligning local practices with international standards to facilitate cross-border transactions and enhance economic stability.

Originality/value

This paper contributes to the under-researched area of Islamic insolvency law by providing a comparative analysis of liquidation procedures in Saudi Arabia and the UK. It highlights the interplay between Sharia principles and modern insolvency practices, filling a gap in existing literature. By examining the implications for creditors and stakeholders, this study offers valuable insights into the effectiveness and fairness of insolvency frameworks. Its findings can inform future legal reforms and facilitate greater understanding of how different jurisdictions handle insolvency challenges, promoting global best practices in this domain.

Citation

Aldahmash, A.N.A. (2025), "The petition for a liquidation procedure and the administrative liquidation procedure: a comparative analysis study in Saudi and UK insolvency law", International Journal of Law and Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJLMA-10-2024-0384