Article 5 of the Saudi Implementing Regulations of the Bankruptcy Law
المادة 5 من اللائحة التنفيذية لنظام الإفلاس · الفصل الثاني: أحكام مشتركة بين إجراءات الإفلاس: طلب افتتاح إجراء الإفلاس
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.
Official text (Arabic)
This article has not been amended since the law was issued.
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 المدين في إدارة نشاطه والوفاء بواجباته النظامية حتى صدور حكم المحكمة في طلب افتتاح الإجراء.
ب - حجز أصول المدين التي في حيازته أو لدى الغير.
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 5 explained in plain English
This article of the Implementing Regulations of the Bankruptcy Law deals with the stage between the registration of the request to open a liquidation procedure and the issuance of the court's judgment on that request.
Who has the initiative? The court may make these orders on its own motion, or at the request of any interested party.
When? After registration of a request to open any of the liquidation procedures. The article speaks of liquidation procedures specifically.
What may the court order? Either of the following:
- Appointing a trustee listed on the trustees' list, to replace the debtor in managing its activity and fulfilling its legal duties, until the court's judgment on the request to open the procedure is issued.
- Seizing the debtor's assets, whether in its possession or with others.
These are discretionary powers; the text says "the court may order," so it is not bound to take them on every request. The article does not set the criteria on which the court bases its decision, nor a period for deciding an interested party's request.
Relation to neighboring articles: Article 4 regulates submitting the request to open a bankruptcy procedure to the court accompanied by the specified information and documents. After the request is registered, the powers of this article come into play. Article 6 regulates notification and announcement, and allows the court to order notification or announcement of any judgment, decision or procedure.
A creditor, as an interested party, can ask the court for one of these orders if it fears for the debtor's assets before the liquidation request is decided. To assess whether such a request is appropriate in a particular case, it would be wise to consult a lawyer specializing in bankruptcy cases.
Practical example
A creditor applied to open a liquidation procedure against a commercial company in Riyadh, and then learned that the company is trying to move its goods out of its warehouses. As an interested party, the creditor can ask the court to seize the company's assets in its possession or with others, or to appoint a trustee from the trustees' list to manage its activity until the court issues its judgment on the request.
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 5 of the Saudi Implementing Regulations of the Bankruptcy Law
Can the debtor's money be seized before the judgment opening liquidation?
Yes. After registration of a request to open any of the liquidation procedures, the court may order the seizure of the debtor's assets in its possession or with others.
Who requests the appointment of a trustee before the liquidation judgment is issued?
The court may order it on its own motion or at the request of any interested party.
How long does a trustee appointed under this article continue?
The trustee replaces the debtor in managing its activity and fulfilling its legal duties until the court's judgment on the request to open the procedure is issued.
More articles on Opening and Ending a Bankruptcy Procedure
- Article 4
A request to open a bankruptcy procedure goes to the court with the specified documents, the trustee submits the small debtor's or competent authority's decision for judicial deposit, and the court may order the debtor to provide documents.
1- يُقدم طلب افتتاح إجراء الإفلاس إلى المحكمة مرافقاً له المعلومات والوثائق المحددة لذلك. 2- يقدم الأمين قرار المدين الصغير أو الجهة المختصة -من أجل الإيداع الق
- Article 18
This article of the Regulations requires that any document issued in the debtor's name state the type of procedure opened: the debtor does so in preventive settlement and financial restructuring, and the trustee or the Bankruptcy Committee in liquidation.
1- على المدين فور افتتاح أي من إجراءات التسوية الوقائية أو إعادة التنظيم المالي تضمين أي مستند يصدر باسمه نوع الإجراء المفتتح له، وعلى الأمين في أي من إجراءي إع
- Article 19
The expenses of a bankruptcy procedure are paid from the bankruptcy estate's assets, unless transgression or negligence is proved.
تدفع مصروفات إجراء الإفلاس من أصول التفليسة، ما لم يثبت تعدٍّ أو تفريط.
- Article 20
This article of the Regulations governs the request to end a bankruptcy procedure: attaching documents, prior notice and its content, objection before the court within 14 days, and the request to end on completion of the plan.
1 - يقدم طلب إنهاء إجراء الإفلاس مرافقة له المعلومات والوثائق المحددة لذلك. 2- على المدين أو الأمين -بحسب الإجراء- تبليغ الدائنين قبل تقديم طلب إنهاء إجراء الإف
- 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 56
This article allows the trustee, at the debtor's request, to ask the court to postpone ending the liquidation for an acceptable reason, such as bringing a claim against a third party.
للأمين -بناءً على طلب المدين- أن يتقدم إلى المحكمة بطلب تأجيل إنهاء إجراء التصفية لسبب مقبول بما في ذلك إقامة دعوى ضد الغير للحصول على تعويض أو استرداد أصل، على
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.