Article 51 of the Saudi Implementing Regulations of the Bankruptcy Law
المادة 51 من اللائحة التنفيذية لنظام الإفلاس · الفصل الخامس: إجراء التصفية: طلب السداد
This article prevents the trustee from selling any bankruptcy estate asset that is the subject of a dispute except with the court's approval.
Official text (Arabic)
This article has not been amended since the law was issued.
إذا كان أي من أصول التفليسة محل نزاع، فلا يجوز للأمين بيعه إلا بعد موافقة 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 51 explained in plain English
This article of the Implementing Regulations of the Bankruptcy Law places a restriction on the trustee's authority to sell the bankruptcy estate's assets during the liquidation procedure:
- If any asset of the bankruptcy estate is the subject of a dispute,
- the trustee may not sell it except with the court's approval.
The reason for this restriction is to protect the parties to the dispute and prevent the sale of an asset that may later turn out not to belong to the debtor or to be subject to another person's right, when it would then be difficult to remedy once it has passed to a buyer. The decision to sell in this case is not for the trustee alone but needs the court's approval.
The article does not specify the type of dispute, so in its generality it covers any dispute to which the asset is subject. Nor does it state the criteria the court uses in approving or refusing, and it does not prohibit the sale absolutely but makes it conditional on the court's approval.
This article follows Article 50, which regulates announcing significant bankruptcy estate assets before sale, and precedes Article 52, which provides that the opening of liquidation does not affect any discount due to the debtor before the opening.
If you are a party to a dispute over an asset held by a debtor in liquidation, it is advisable to consult a lawyer who specializes in bankruptcy and commercial cases to protect your right before any sale.
Practical example
In the liquidation of a real estate company in Makkah, an investor claims that a plot of land registered among the bankruptcy estate's assets was bought by him from the company before the opening, and the matter is disputed. The trustee may not sell this land except with the court's approval.
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 51 of the Saudi Implementing Regulations of the Bankruptcy Law
May the liquidation trustee sell a disputed asset?
He may not sell it except with the court's approval.
Does a dispute prevent the sale of the asset altogether?
No. The article makes the sale conditional on the court's approval and does not prohibit it absolutely.
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.