Article 39 of the Saudi Implementing Regulations of the Bankruptcy Law
المادة 39 من اللائحة التنفيذية لنظام الإفلاس · الفصل الثالث: إجراء التسوية الوقائية: تأشير الأمين على المقترح
This article limits the right to vote on the proposal to a creditor or owner whose statutory or contractual rights the proposal affects.
Official text (Arabic)
This article has not been amended since the law was issued.
لا يصوت على المقترح إلا الدائن أو المالك الذي يرتب المقترح أثراً في حقوقه النظامية أو التعاقدية بما في ذلك الحط من حقوقه أو تأجيل الوفاء بها أو تقسيطها.
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 39 explained in plain English
This article of the Implementing Regulations of the Bankruptcy Law specifies who may vote on the proposal. The rule is that only the following may vote:
- A creditor, or
- An owner,
provided that the proposal affects his statutory or contractual rights. The article gives examples of this effect, including:
- Reducing his rights.
- Deferring their payment.
- Paying them in installments.
The phrase "including" indicates that these forms are examples and not exhaustive, so any effect on statutory or contractual rights falls within the rule. A creditor or owner whose rights the proposal does not touch does not vote on it, because the result of the vote does not affect his position.
The logic of this rule is that the decision should be in the hands of those who bear the effect of the proposal. The article follows Article 38 on amending the proposal and notifying creditors of the voting date, and precedes Article 40, which deals with the debtor's failure to file the result of the vote with the court.
If you are not sure whether your rights are affected by the proposal, you can consult a lawyer who specializes in bankruptcy and commercial cases.
Practical example
Sarah is a creditor of a company in preventive settlement for an amount that the proposal suggests paying in installments over two years, so she may vote. Another supplier, whose debt the proposal provides will be paid in full on its due date without any change, is not affected in his rights by the proposal, so he does not vote.
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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Frequently asked questions about Article 39 of the Saudi Implementing Regulations of the Bankruptcy Law
Who may vote on a preventive settlement proposal?
A creditor or owner whose statutory or contractual rights the proposal affects.
Does a creditor who is not affected by the proposal vote?
No. Voting is limited to those whose rights the proposal affects.
What are examples of the proposal affecting a creditor's rights?
Reducing his rights, deferring their payment, or paying them in installments.
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 sets out when the court approves putting a proposal to amend the plan to creditors and owners for a vote, including a material circumstance, a request within 14 days, and the possible 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 requires the preventive settlement proposal to be endorsed by a trustee listed on the trustees' list 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 requires the debtor to notify creditors of the preventive settlement opening judgment within 7 days, and gives an unlisted creditor 14 days to ask for its claim to be included.
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 requires the debtor to file the court's decision approving or extending a stay of claims with the Bankruptcy Register as soon as it is issued.
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.