Article 49 of the Saudi Implementing Regulations of the Bankruptcy Law
المادة 49 من اللائحة التنفيذية لنظام الإفلاس · الفصل الخامس: إجراء التصفية: طلب السداد
This article requires a debtor who requests liquidation to notify its creditors of the request and hearing date within 7 days of registering it, and allows a creditor to object at least 5 days before the hearing.
Official text (Arabic)
This article has not been amended since the law was issued.
على المدين -إذا تقدم بطلب افتتاح إجراء التصفية- تبليغ دائنيه بالطلب, وموعد جلسة النظر فيه خلال (سبعة) أيام من تاريخ قيده. وللدائن تقديم اعتراض إلى المحكمة على الطلب قبل موعد جلسة النظر فيه بمدة لا تقل عن (خمسة) أيام.
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 49 explained in plain English
This article of the Implementing Regulations of the Bankruptcy Law deals with the case where the debtor itself is the one who asks to open the liquidation procedure, and provides two things:
First: notifying the creditors. The debtor must notify its creditors of:
- The request to open the liquidation.
- The date of the hearing to consider it.
The notice is made within 7 days of the date the request is registered.
Second: the right to object. A creditor may submit to the court an objection to the request, provided it submits it at least 5 days before the date of the hearing to consider it. If the hearing is, for example, on the 20th of the month, the objection should be submitted at a date that precedes it by at least five days.
The article does not specify the grounds for objection or what the court rules on it; its ruling is limited to notice and the time for submitting the objection. It ensures that liquidation is not opened at the debtor's request without the creditors' knowledge and without giving them an opportunity to state their position.
This article follows Article 48 on the payment request that a creditor submits to the debtor, and precedes Article 50, which regulates announcing some of the bankruptcy estate's assets before selling them. If you are a creditor and receive a notice of a liquidation request, it is advisable to consult a lawyer who specializes in bankruptcy and commercial cases early so as to observe the period.
Practical example
A retail company in Dammam registered a request to open the liquidation procedure, and notified its creditors of the request and the hearing date within 7 days. One of the suppliers saw that it had grounds to object to the request, and submitted its objection to the court more than 5 days before the hearing.
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 49 of the Saudi Implementing Regulations of the Bankruptcy Law
When does the debtor notify its creditors of a liquidation request?
Within 7 days of the date the request is registered, and the notice includes the date of the hearing to consider it.
May a creditor object to a debtor's request to liquidate its assets?
Yes. A creditor may submit an objection to the request to the court.
What is the last date to object to a liquidation request?
It must be submitted at least 5 days before the date of the hearing to consider the request.
More articles on Liquidation of the Debtor's Assets
- Article 3
This article of the Regulations requires the debtor's directors or board members, before a voluntary liquidation item is put to a vote, to submit an auditor's report and a written declaration to the Ministry or the Capital Market Authority.
يلتزم أعضاء مجلس إدارة المدين أو مديروه أو أعضاء مجلس مديريه أو من في حكمهم - قبل إدراج بند التصفية الاختيارية للمدين؛ للتصويت عليه في جمعية المساهمين أو جمعية
- Article 5
After registration of a request to open any liquidation procedure, the court may appoint a trustee to replace the debtor in managing its activity, or seize the debtor's assets.
للمحكمة -من تلقاء نفسها أو بناء على طلب ذي مصلحة- أن تأمر, بعد قيد طلب افتتاح أي من إجراءات التصفية، بأي مما يأتي: أ - تعيين أمين مدرج في قائمة الأمناء يحل محل
- Article 11
The trustee sells the bankruptcy estate's assets after the judgment or decision opening the liquidation procedure, or the liquidation procedure for small debtors, becomes final.
يتولى الأمين بيع أصول التفليسة بعد اكتساب حكم أو قرار افتتاح إجراء التصفية أو إجراء التصفية لصغار المدينين الصفة النهائية.
- Article 21
A natural-person debtor who has not been discharged from a remaining debt must notify creditors if he starts a profit-making activity within 24 months of ending liquidation, and apply to distribute any money that comes to him.
1- على المدين ذي الصفة الطبيعية -الذي لم يبرأ من دين متبق في ذمته- تبليغ دائنيه عند بدء ممارسته نشاطاً تجارياً أو مهنياً أو يهدف إلى تحقيق الربح خلال (أربعة وعش
- Article 26
This article sets out the creditors' committee's tasks in representing the creditors, including approving the sale of any asset worth more than a quarter of the bankruptcy estate's assets, and lets its chair set the time and place of meetings.
1- تلتزم لجنة الدائنين بتمثيل الدائنين في المهمات المنصوص عليها في النظام واللائحة، وتشمل مهماتها الآتي: أ - الموافقة على بيع أي أصل تتجاوز قيمته ربع قيمة أصول
- Article 48
This article requires that a creditor's payment request to the debtor under paragraph (2/c) of Article 93 of the Law be dated and state the amount of the debt and its cause.
يجب أن يكون طلب سداد الدين الذي يقدمه الدائن إلى المدين بموجب الفقرة ( 2 / ج ) من المادة (الثالثة والتسعين) من النظام مؤرخاً ومحدداً فيه مقدار الدين وسبب نشوئه.
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.