Article 100 of the Saudi Bankruptcy Law
المادة 100 من نظام الإفلاس · الفصل الخامس: إجراء التصفية: إدارة أمين التصفية لنشاط المدين
The article bars the debtor from managing its business as soon as the trustee is appointed, with the trustee taking its place, and voids the debtor's acts concerning bankruptcy estate assets after the appointment.
Official text (Arabic)
This article has not been amended since the law was issued.
1- تغل يد المدين عن إدارة نشاطه فور تعيين الأمين.
2- يحل الأمين محل المدين في إدارة نشاطه والوفاء بواجبات المدين النظامية خلال فترة الإجراء، ولا يسأل الأمين شخصياً في مواجهة الغير عن التصرفات التي يجريها بهذه الصفة.
3- يعد باطلاً كل تصرف يقع من المدين على أي من أصول التفليسة بعد تعيين الأمين، وللمحكمة أن تقضي باسترداد ذلك الأصل من الغير أو بما تراه مناسباً، وذلك مع مراعاة حقوق الغير (حسن النية)، وللمتضرر أن يتقدم بدعوى التعويض.
4- يبلغ الأمين المدين بأي استدعاء أو إخطار أو أمر يخصه يصدر عن المحكمة أو أي جهة معنية أخرى.
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 100 explained in plain English
This article governs the transfer of management from the debtor to the liquidation trustee.
- Removal of the debtor's authority: The debtor is barred from managing its business as soon as the trustee is appointed.
- The trustee takes the debtor's place: The trustee manages the business and performs the debtor's legal duties during the period of the procedure, and is not personally liable to third parties for acts done in that capacity.
- Voiding the debtor's acts: Any act by the debtor concerning any bankruptcy estate asset after the trustee is appointed is void. The court may rule to recover the asset from a third party or as it sees fit, taking into account the rights of good-faith third parties, and the injured party may bring a claim for compensation.
- Notices: The trustee notifies the debtor of any summons, notice or order concerning it issued by the court or any other concerned authority.
In practice, anyone dealing with a business in liquidation after the trustee is appointed should deal with the trustee, not the debtor, because the debtor's disposal of bankruptcy estate assets after that date is liable to be void.
This article comes after Article 99, which governs the judgment opening the procedure, and before Article 101, under which no security created during the liquidation is valid except with the approval of the creditors and the court. To assess a particular situation, consult a lawyer specializing in bankruptcy and commercial cases.
Practical example
After a trustee was appointed for the liquidation of an establishment in Khobar, its owner sold a car owned by the establishment to an acquaintance. This sale is void because it was made by the debtor concerning a bankruptcy estate asset after the trustee was appointed, and the court may rule to recover the car or as it sees fit, taking into account the rights of good-faith third parties.
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 100 of the Saudi Bankruptcy Law
When is the debtor barred from managing its business in liquidation?
As soon as the trustee is appointed.
Is the liquidation trustee personally liable for its acts?
It is not personally liable to third parties for acts it does in its capacity as taking the debtor's place in managing its business.
What is the ruling on the debtor selling its assets after the trustee is appointed?
It is void, and the court may rule to recover the asset from a third party or as it sees fit, taking into account the rights of good-faith third parties.
More articles on Liquidation of the Debtor's Assets
- Article 7
Article 7 bars the liquidation of any person under another law unless its assets cover all its debts and it is not defaulting, and makes management members jointly liable if this is violated.
1- مع مراعاة ما ورد في المادة (الرابعة) من النظام، لا يصفى أي شخص بموجب نظام آخر إلا إذا كانت أصوله تكفي لسداد جميع ديونه وكان غير متعثر. 2- إذا تم حل المدين وت
- Article 69
The debtor continues to manage its business during financial reorganization under the trustee's supervision, and at the trustee's request the court may remove its control in cases of negligence, mismanagement or criminal acts.
1- دون إخلال بصلاحيات ومهمات الأمين، يستمر المدين في إدارة أعماله ونشاطه خلال فترة إجراء إعادة التنظيم المالي تحت إشراف الأمين. 2- إذا ارتكب المدين أو أحد المسؤ
- Article 90
The court opens liquidation or administrative liquidation after financial restructuring ends if the debtor is distressed or bankrupt, the procedure's conditions are met, and the ending was for specified grounds.
تقضي المحكمة -من تلقاء نفسها أو بناء على طلب من ذي مصلحة- بافتتاح إجراء التصفية أو التصفية الإدارية إذا تحققت الشروط الآتية: أ - أن يكون المدين متعثراً أو مفلسا
- Article 92
The article allows the debtor, a creditor or the competent authority to ask the court to open the liquidation procedure if the debtor is distressed or bankrupt.
دون الإخلال بأحكام الأنظمة ذات العلاقة، للمدين أو الدائن أو الجهة المختصة التقدم إلى المحكمة بطلب افتتاح إجراء التصفية للمدين إذا كان المدين متعثراً أو مفلساً.
- Article 93
The article requires that a liquidation request be accompanied by the information and documents the Implementing Regulations specify to be registered, and sets special conditions where one or more creditors file it.
1- يشترط لقيد طلب افتتاح إجراء التصفية لدى المحكمة أن يقدم الطلب مرافقاً له المعلومات والوثائق ذات العلاقة، وفقاً لما تحدده اللائحة. 2- لا يقيد طلب دائن أو أكثر
- Article 94
A creditor's request to open liquidation is not registered if the debtor disputed the debt before the request, and filing it despite proof of the dispute is an abuse of the procedure.
لا يقيد طلب الدائن بافتتاح إجراء التصفية إذا كان المدين قد نازع الدائن في الدين قبل تقدم الدائن بالطلب. ويعد طلب الدائن افتتاح الإجراء مع وجود ما يثبت منازعة ال
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.