Article 52 of the Saudi Implementing Regulations of the Bankruptcy Law
المادة 52 من اللائحة التنفيذية لنظام الإفلاس · الفصل الخامس: إجراء التصفية: طلب السداد
The opening of the liquidation procedure does not affect any discount due to the debtor before the opening, even if the parties agreed otherwise.
Official text (Arabic)
This article has not been amended since the law was issued.
لا يؤثر افتتاح إجراء التصفية في أي حسم مستحق للمدين قبل الافتتاح، ولو اتفق على غير ذلك.
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 52 explained in plain English
This article of the Implementing Regulations of the Bankruptcy Law deals with the effect of opening the liquidation procedure on a discount due to the debtor, and sets a clear rule:
- The opening of the liquidation procedure does not affect any discount the debtor became entitled to before the opening.
- This ruling applies even if the parties agreed otherwise.
This means that a discount established for the debtor before the liquidation opens remains in place and does not lapse merely because the procedure opens. The phrase "even if the parties agreed otherwise" means that this ruling cannot be excluded by agreement, so if a contract between the debtor and another party contains a term that cancels this discount when the liquidation opens, that term does not change the ruling.
Note that the article is limited to a discount due before the opening and does not address what may arise after it. It also does not define the discount or set out its forms, so the reference for establishing its entitlement is the relationship from which it arose. The benefit of this ruling is to preserve the debtor's rights that enter the bankruptcy estate, to the advantage of the creditors.
This article follows Article 51, which prevents selling a disputed asset without the court's approval, and precedes Article 53 on the contracts of the debtor's workers. To assess whether a particular discount was due before the opening, you can consult a lawyer who specializes in bankruptcy and commercial cases.
Practical example
A trading company in Riyadh became entitled, before its liquidation opened, to a discount from one of its suppliers, and the contract contains a term that cancels this discount if the company enters a liquidation procedure. After the liquidation opens, the opening does not affect this due discount, and the contrary term is not applied.
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 52 of the Saudi Implementing Regulations of the Bankruptcy Law
Does a discount due to the debtor lapse when liquidation opens?
No. The opening of liquidation does not affect any discount due to the debtor before the opening.
May the parties agree to cancel the discount on liquidation?
The article provides that the ruling applies even if the parties agreed otherwise.
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.