Article 75 of the Saudi Implementing Regulations of the Bankruptcy Law
المادة 75 من اللائحة التنفيذية لنظام الإفلاس · الفصل العاشر: المقاصة والديون التبادلية
Automatic set-off takes place according to the exchange rates at the Saudi Central Bank on the date the procedure opens.
Official text (Arabic)
This article has not been amended since the law was issued.
تجرى المقاصة التلقائية وفقاً لأسعار الصرف لدى مؤسسة النقد العربي السعودي في تاريخ افتتاح الإجراء.
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 75 explained in plain English
This article of the Regulations settles a practical question in automatic set-off: which exchange rate is used if the mutual debts are in different currencies?
The answer in the text has two elements:
- Source of the rate: The exchange rates at the Saudi Central Bank.
- Date of the rate: The date the procedure opens, not the date the debt arose or the date the set-off is carried out.
The benefit of this ruling is that it fixes the value of the debts at one known moment, so the set-off calculation is not affected by changes in currency rates after the procedure opens, and each party does not choose the rate that suits it best.
This article comes within the chapter on set-off and mutual debts, after Article 74, which refers the rules on multilateral set-off between regulated entities that carry on a financial activity to the competent authority.
The article does not address when automatic set-off takes place or its conditions, which should be consulted in the Bankruptcy Law. Anyone who has debts or obligations in foreign currencies with a debtor in a bankruptcy procedure is best advised to consult a lawyer who specializes in bankruptcy and commercial cases.
Practical example
An import company in Dammam owes a bankrupt establishment an amount in dollars, and at the same time has a debt owed to it by the establishment in riyals. When automatic set-off is carried out, the dollar amount is converted at the exchange rate at the Saudi Central Bank on the date the procedure opens, even if the rate changes afterwards.
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 75 of the Saudi Implementing Regulations of the Bankruptcy Law
What exchange rate is used in automatic set-off in bankruptcy?
The exchange rates at the Saudi Central Bank on the date the procedure opens.
Does the set-off calculation change if the exchange rate changes after the procedure opens?
The text uses the exchange rate on the date the procedure opens specifically.
More articles on Set-Off and Priority of Debts
- Article 54
This article specifies what the decision to distribute to creditors in liquidation must contain, and allows the trustee to ask the court to amend it.
1 - يجب أن يتضمن قرار التوزيع على الدائنين الآتي: أ - بيان أصول التفليسة المبيعة وحصيلة بيعها. ب - بيان طريقة توزيع حصيلة بيع أصول التفليسة وتاريخ التوزيع. ج -
- Article 71
If selling the bankruptcy estate's assets yields proceeds sufficient for the expenses of liquidation or small debtors' liquidation, they are distributed starting with the Bankruptcy Committee's fees and expenses, then to the creditors.
إذا نتجت عن بيع أصول التفليسة حصيلة تكفي للوفاء بمصروفات إجراء التصفية أو التصفية لصغار المدينين، فيكون توزيعها وفقاً للترتيب الآتي: أ - أتعاب ومصروفات لجنة الإ
- Article 73
Automatic set-off based on a debt assignment that arose after the application to open any of the liquidation procedures was submitted is not permitted.
لا يجوز إجراء المقاصة التلقائية بناء على حوالة دين نشأت بعد تقديم طلب افتتاح أي من إجراءات التصفية.
- Article 74
This article makes the competent authority responsible for issuing the rules on multilateral set-off between regulated entities that carry on a financial activity.
تصدر الجهة المختصة القواعد المنظمة لإجراء عمليات المقاصة المتعددة الأطراف بين الكيانات المنظمة التي تمارس نشاطاً ماليًّا.
- Article 76
This article makes the order of debts within each priority listed in Article 196 of the Bankruptcy Law follow their order in the relevant laws.
يكون ترتيب أولوية الديون في كل من الأولويات الواردة في المادة (السادسة والتسعين بعد المائة) من النظام وفق ترتيبها في الأنظمة ذات العلاقة.
- Article 77
Debts of the debtor necessary for continuing its activity that arise after the bankruptcy procedure opens are counted as expenses during the procedure and paid according to paragraph (e) of Article 196 of the Law.
تعد ديون المدين اللازمة لاستمرار نشاطه -التي تنشأ بعد افتتاح إجراء الإفلاس- ضمن المصروفات أثناء الإجراء، وتكون أولوية سدادها وفقاً لحكم الفقرة (هــ) من المادة (
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.