Article 103 of the Saudi Bankruptcy Law
المادة 103 من نظام الإفلاس · الفصل الخامس: إجراء التصفية: بيع الأصول
The trustee sells the bankruptcy estate assets at the same time as verifying claims, and may stop verifying, with the court's approval, if expenses and secured debts exhaust the proceeds.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يتولى الأمين إجراءات بيع أصول التفليسة بالتزامن مع التحقق من المطالبات المقدمة إليه.
2- إذا تبين للأمين أن مصروفات الإجراء والديون المضمونة تستغرق حصيلة بيع الأصول مجتمعة جاز له التوقف عن التحقق من المطالبات المقدمة إليه 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 103 explained in plain English
This article governs the trustee's work in two parallel stages of liquidation: selling the assets and verifying claims.
The rule: The trustee carries out the procedures for selling the bankruptcy estate assets at the same time as verifying the claims submitted to it, and does not wait for one to finish before starting the other.
Option to stop verifying: If it becomes clear to the trustee that the expenses of the procedure and the secured debts together exhaust the proceeds of selling the assets, it may stop verifying the claims submitted to it, subject to the court's approval.
The logic is that if all the proceeds will go to the expenses of the procedure and the secured debts, continuing to examine the remaining claims may serve no practical purpose. Even so, the law did not leave this decision to the trustee alone but required the court's approval.
This article comes after Article 102, under which opening liquidation leads to the start of liquidating the bankruptcy estate assets, and before Article 104, which allows the trustee to take what it considers appropriate to sell the assets at the best possible price. To assess a particular situation, consult a lawyer specializing in bankruptcy and commercial cases.
Practical example
The liquidation trustee of a factory in Yanbu began selling the equipment and examining the claims at the same time. It became clear to him that the expected proceeds would not exceed the expenses of the procedure and the bank's debt secured by a mortgage, so he asked the court to approve stopping verifying the remaining claims.
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 103 of the Saudi Bankruptcy Law
Does the trustee wait for the claims review to finish before selling assets?
No. It carries out the sale of assets at the same time as verifying the claims.
When may the trustee stop verifying claims?
If it becomes clear that the expenses of the procedure and the secured debts together exhaust the proceeds of selling the assets, and with the court's approval.
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.