Article 38 of the Saudi Implementing Regulations of the Bankruptcy Law
المادة 38 من اللائحة التنفيذية لنظام الإفلاس · الفصل الثالث: إجراء التسوية الوقائية: تأشير الأمين على المقترح
This article of the Regulations allows the debtor to request an amendment of the protective settlement proposal for an acceptable reason, and requires the debtor to notify the creditors of the amendment and the voting date within 5 days.
Official text (Arabic)
This article has not been amended since the law was issued.
1- للمدين -بناء على سبب مقبول- التقدم إلى المحكمة بطلب الموافقة على تعديل المقترح.
2- تراعي المحكمة في حال الموافقة على تعديل المقترح تاريخ التصويت عليه، ولها أن تعدل تاريخ التصويت بما يمكِّن الدائنين من دراسة التعديل.
3 - على المدين أن يبلغ الدائنين بتعديل المقترح وموعد التصويت عليه خلال (خمسة) أيام من تاريخ موافقة المحكمة، وأن يرفق بالتبليغ نسخة من المقترح أو ما يفيد بإتاحة الاطلاع عليه بأي من الوسائل الإلكترونية التي تحددها لجنة الإفلاس، وأن يودع نسخة منه لدى المحكمة.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 38 explained in plain English
After submitting a protective settlement proposal, the debtor may need to amend it before it is voted on. This article of the Implementing Regulations of the Bankruptcy Law regulates that in three steps:
- The request: the debtor may, for an acceptable reason, ask the court to approve an amendment of the proposal. The amendment is not automatic; it requires the court's approval.
- The voting date: if the court approves, it takes into account the date of the vote on the proposal, and it may change that date so as to enable the creditors to study the amendment.
- Notice and filing: within 5 days of the date of the court's approval, the debtor must:
- Notify the creditors of the amendment of the proposal and the date of the vote on it.
- Attach to the notice a copy of the proposal, or something showing that it is available for viewing by one of the electronic means specified by the Bankruptcy Committee.
- File a copy of it with the court.
The aim of these provisions is that creditors are not surprised by an amendment that leaves no time to study it before the vote. This article follows Article 37 on the request to terminate contracts, and is followed by Article 39, which specifies who is entitled to vote on the proposal.
To assess whether the reason for an amendment is acceptable in a particular case, you may consult a lawyer specialized in bankruptcy and commercial cases.
Practical example
A distribution company in Riyadh submitted a protective settlement proposal, then obtained a new financing offer that allows it to pay creditors a larger share. It applied to the court to amend the proposal, and the court approved and postponed the voting date. The company notified the creditors of the amendment and the new date within 5 days and filed a copy with the court.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Active contributorFrequently asked questions about Article 38 of the Saudi Implementing Regulations of the Bankruptcy Law
Can a protective settlement proposal be amended before the vote?
Yes. The debtor may ask the court to approve an amendment for an acceptable reason.
Does the voting date change when the proposal is amended?
The court takes into account the date of the vote, and may change it so as to enable the creditors to study the amendment.
How long does the debtor have to notify creditors of an amendment to the proposal?
Within 5 days of the date of the court's approval, together with filing a copy of the proposal with the court.
More articles on Protective Settlement
- Article 16
This article of the Regulations specifies the details the proposal must include, as the case may be, such as the debtor's financial position, assets and debts, the proposed settlement, classification of creditors and the plan's timetable.
يجب أن يتضمن المقترح -بحسب الأحوال- ما يأتي: أ - معلومات عن المدين ونشاطه. ب- بيان الوضع المالي للمدين وتأثيرات الوضع الاقتصادي عليه. ج - تحديد أصول المدين وتقد
- Article 17
The meeting management rules apply to managing the vote on the proposal, the debtor or trustee prepares minutes of the voting meeting with specified details, then deposits the voting result with the court.
1- تسري قواعد إدارة الاجتماعات على إدارة عملية التصويت على المقترح. 2- يعد المدين أو الأمين -بحسب الإجراء- محضراً لاجتماع الدائنين للتصويت على المقترح، يقيد فيه
- Article 31
This article of the Regulations sets the cases in which the court agrees to put a proposal to amend the plan to creditors and owners for a vote, and allows a stay of claims.
1 - توافق المحكمة -بناءً على طلب المدين أو الأمين بحسب الإجراء- على تقديم مقترح لتعديل الخطة للدائنين والملاك وتحدد موعداً للتصويت عليه، وذلك في أي من الحالات ا
- Article 32
This article of the Regulations requires that the proposal for a protective settlement be endorsed by a trustee on the list of trustees as meeting the required information and documents.
يجب أن يكون المقترح المرافق لطلب افتتاح إجراء التسوية الوقائية مؤشراً عليه من أمين مدرج في قائمة الأمناء باستيفائه المعلومات والوثائق المطلوبة.
- Article 33
This article of the Regulations requires the debtor to notify creditors of the opening of the protective settlement within 7 days and gives an omitted creditor 14 days to request inclusion of its claim.
1- على المدين تبليغ الدائنين المحددين في المقترح بحكم المحكمة بافتتاح إجراء التسوية الوقائية خلال (سبعة) أيام من تاريخ صدوره، ودعوتهم إلى التصويت على المقترح، ع
- Article 34
This article of the Regulations requires the debtor to lodge the court's decision approving or extending a stay of claims with the Bankruptcy Register immediately upon its issue.
على المدين أن يودع لدى سجل الإفلاس قرار المحكمة بالموافقة على طلب تعليق المطالبات أو تمديده فور صدوره.
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.