Article 57 of the Saudi Implementing Regulations of the Bankruptcy Law
المادة 57 من اللائحة التنفيذية لنظام الإفلاس · الفصل السادس: إجراء التسوية الوقائية لصغار المدينين: إنهاء العقود
This article of the Regulations regulates the small debtor's request to terminate its contracts in the protective settlement for small debtors, its timing, the trustee's report and notice to the counterparty.
Official text (Arabic)
This article has not been amended since the law was issued.
1 - على المدين الصغير الذي يرغب في إنهاء أي من العقود التي يكون طرفاً فيها تقديم طلب الإنهاء إلى المحكمة بعد إيداع قرار افتتاح إجراء التسوية الوقائية لصغار المدينين لدى سجل الإفلاس وقبل تصويت الدائنين على المقترح، على أن يرفق به تقريراً من أمين مدرج في قائمة الأمناء يبين أن الإنهاء ضروري لحماية نشاط المدين، ويحقق مصلحة أغلبية الدائنين، ولا يرتب ضرراً بالغاً على المتعاقد.
2 - على المدين الصغير أن يبلغ المتعاقد بموعد جلسة النظر في المحكمة قبل (خمسة) أيام على الأقل من موعدها، وبقرار المحكمة بالإنهاء خلال (خمسة) أيام من تاريخ صدوره إذا لم يحضر المتعاقد الجلسة.
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 57 explained in plain English
This article of the Implementing Regulations of the Bankruptcy Law concerns the small debtor in the protective settlement procedure for small debtors, and regulates its wish to terminate any of the contracts to which it is a party.
Timing of the request: the small debtor submits the request for termination to the court in the period that falls:
- After the decision to open the protective settlement procedure for small debtors is filed with the bankruptcy register.
- And before the creditors vote on the proposal.
The trustee's report: attached to the request is a report from a trustee listed in the trustees' list, stating three things: that termination is necessary to protect the debtor's business, that it serves the interest of the majority of creditors, and that it does not cause serious harm to the counterparty.
Notice to the counterparty: the small debtor must:
- Notify the counterparty of the date of the court hearing at least 5 days before it.
- Notify it of the court's decision to terminate within 5 days of its issue if it did not attend the hearing.
Termination is therefore by a decision of the court and not by the debtor's will alone, with the counterparty's right to know of the hearing and the decision protected. This article follows Article 56 on postponing the end of the liquidation procedure, and is followed by Article 58 on notifying the creditors of the voting date. A counterparty whose contract is sought to be terminated may consult a lawyer specialized in bankruptcy and commercial cases.
Practical example
The owner of a small electronics shop in Taif had the protective settlement procedure for small debtors opened for him, and filed the opening decision in the bankruptcy register. Before the creditors voted, he asked the court to terminate a costly maintenance contract, attached the report of a listed trustee, and notified the maintenance company of the hearing date at least 5 days before.
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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Active contributorFrequently asked questions about Article 57 of the Saudi Implementing Regulations of the Bankruptcy Law
When does a small debtor submit a request to terminate contracts?
After the decision to open the protective settlement procedure for small debtors is filed with the bankruptcy register and before the creditors vote on the proposal.
Does a small debtor need a trustee's report to terminate a contract?
Yes. It attaches a report from a trustee listed in the trustees' list stating that termination is necessary, serves the majority of creditors and does not cause serious harm to the counterparty.
When is the counterparty notified of the termination hearing?
At least 5 days before its date, and it is notified of the decision within 5 days of its issue if it did not attend.
More articles on Small Debtor Bankruptcy Procedures
- 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 58
This article requires the small debtor to notify the creditors identified in the proposal of the voting date, with a copy of the proposal or evidence that it is available electronically.
يبلغ المدين الصغير الدائنين المحددين في المقترح بموعد التصويت عليه، ويرفق بالتبليغ نسخة من المقترح أو ما يفيد بإتاحة الاطلاع عليه بأي من الوسائل الإلكترونية الت
- Article 59
This article requires the small debtor to attach the information and documents specified for that purpose to the request for a stay of claims.
على المدين الصغير أن يرفق بطلب تعليق المطالبات المعلومات والوثائق المحددة لذلك.
- Article 60
This article of the Regulations requires the small debtor to file the decision approving a stay of claims, or its extension, with the bankruptcy register as soon as it is issued, and to announce it within 5 days.
1 - على المدين الصغير فور إصدار المحكمة قراراً بالموافقة على طلب تعليق المطالبات أو تمديده, إيداع القرار لدى سجل الإفلاس. 2 - يعلن المدين الصغير قرار المحكمة با
- Article 61
This article requires the small debtor to file with the Bankruptcy Register, within 5 days, what proves that the result of the vote was filed with the court, and to announce that the plan has taken effect within 5 days.
على المدين الصغير خلال (خمسة) أيام من انتهاء تصويت الدائنين على المقترح أن يودع لدى سجل الإفلاس ما يثبت إيداع نتيجة التصويت لدى المحكمة، وعليه أن يعلن عن نفاذ ا
- Article 62
This article explains how financial reorganization for small debtors opens: the decision in the specified form, the trustee's check of the conditions, and the court's time limits on filing or a creditor's request.
1 - يصدر المدين الصغير أو الجهة المختصة قرار افتتاح إجراء إعادة التنظيم المالي لصغار المدينين وفقاً للنموذج المحدد لذلك. 2 - على الأمين التحقق -بناء على المعلوم
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.