The Administrative Court in Jeddah has ordered the mayoralty to honor its contract with a company which had been hired to collect debts and other revenue worth SR500 million. The court rejected the mayoralty's argument for revoking the contract with the company and said its decision was illegal. The mayoralty's representative at the court objected to the ruling, saying that the city intends appealing the matter once it has studied the judgment. An informed source at the court said the mayoralty had signed a contract with the company to collect all the revenues and fines it imposes on the violators at malls, restaurants and grocers, in return for getting a certain percentage of the amount it collected. After a year and a half, the company received a letter from the mayoralty terminating the contract, under the pretext that it was the completion of the first phase of the contract. But the company rejected the decision of the mayoralty as a violation of the contract. In its complaint, the company argued that the company had fulfilled all its obligations defined in the contract. It stated that the first stage was for collecting information about the nature of the violations. The company had built a large database for the collection of the revenues, estimated at SR500 million in the first year. The company argued that it was entitled to a share of this, as stipulated in the contract. The company stressed that the ending of the contract was unlawful because it had completed the first phase successfully, pointing out that when the company had entered into the second phase, which represents the core of the contract, the mayoralty had surprised it by cancelling the contract. The mayoralty's representative argued that their action was lawful and that the company had committed a number of violations, which had forced the mayoralty to cancel the contract. The judges at the Administrative Court based their decision on the advice of experts in contractual law. The experts had found that the mayoralty violated the clauses of the contract and that it should be forced to carry out the contract in letter and spirit.
