Article 112 of the Saudi Bankruptcy Law
المادة 112 من نظام الإفلاس · الفصل الخامس: إجراء التصفية: حقوق التصويت
The article governs claims filed after the 90 days in Article 56 and before the final distribution, and stops the claimant from objecting to earlier distributions.
Official text (Arabic)
This article has not been amended since the law was issued.
1- إذا تقدم الدائن بمطالبته بعد انتهاء مدة (التسعين) يوماً المحددة في المادة (السادسة والخمسين) من النظام وقبل إجراء التوزيع النهائي لحصيلة بيع أصول التفليسة، فينظر الأمين في المطالبة ويوصي بشأنها للمحكمة بالقبول أو الرفض أو العرض على خبير، وتسري في هذا الشأن أحكام الفقرة (2) من المادة (الثامنة والستين) من النظام.
2- لا يقبل اعتراض الدائن الذي تأخر في تقديم مطالبته عن مدة (التسعين) يوماً المحددة في المادة (السادسة والخمسين) من النظام على أي توزيع أجراه الأمين قبل تقديم المطالبة المتأخرة.
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 112 explained in plain English
This article deals with the position of a creditor who is late in filing its claim in the liquidation procedure.
Its scope: A claim filed after the 90-day period set in Article 56 of the law ends, and before the final distribution of the proceeds of selling the bankruptcy estate assets.
First, considering the claim: A late claim is not automatically rejected. Rather, the trustee considers it and recommends to the court one of three options:
- Acceptance.
- Rejection.
- Referral to an expert.
The provisions of paragraph 2 of Article 68 of the law apply in this regard.
Second, the effect of lateness: The late creditor's objection to any distribution the trustee made before the late claim was filed is not accepted. What was distributed before is not revisited because of its objection.
The practical message for the creditor: lateness does not necessarily forfeit the claim as long as the final distribution has not taken place, but it costs the creditor the right to object to earlier distributions.
Articles 56 and 68 must be consulted for the provisions referred to. To assess a particular situation, consult a lawyer specializing in bankruptcy and commercial cases.
Practical example
A supplier in Qassim did not learn of the opening of the liquidation of its customer until the 90-day period had passed, and the trustee had already made an initial distribution. The supplier filed its claim before the final distribution, and the trustee considered it and recommended to the court that it be accepted, but the supplier's objection to the initial distribution made before it filed its claim is not accepted.
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 112 of the Saudi Bankruptcy Law
Can a claim be filed after the 90 days in liquidation?
Yes, as long as the final distribution of the proceeds of selling the assets has not taken place. The trustee considers it and recommends to the court acceptance, rejection or referral to an expert.
Can a late creditor object to earlier distributions?
Its objection to any distribution the trustee made before its late claim was filed is not accepted.
Articles this article refers to
- Article 56
Within 7 days of appointment, the trustee announces the opening ruling for financial reorganization and invites creditors to submit claims within 90 days, and notifies the creditors known to it of the ruling.
1- يعلن الأمين خلال (سبعة) أيام من تاريخ تعيينه في الوسيلة التي تحددها اللائحة حكم المحكمة بافتتاح إجراء إعادة التنظيم المالي، ويدعو الدائنين إلى تقديم مطالباته
- Article 68
The trustee prepares a list of creditors' claims and submits it to the court for approval within 14 days, and notifies within 5 days anyone whose claim it recommended rejecting or referring to an expert.
1- يعد الأمين قائمة بمطالبات الدائنين بناء على المعلومات المقدمة إليه وفقاً لما تحدده اللائحة، ويقدمها إلى المحكمة خلال (أربعة عشر) يوماً من تاريخ انتهاء المدة
More articles on Creditors' Rights in Bankruptcy
- Article 16
Article 16 requires the ruling opening a protective settlement to set a creditors' vote within 40 days, extendable by another 40 days, and requires the debtor to announce the opening within 7 days.
1- تحدد المحكمة في حكمها الصادر بافتتاح إجراء التسوية الوقائية موعداً لتصويت الدائنين على المقترح، على أن يكون الموعد خلال مدة لا تزيد على (أربعين) يوماً من تار
- Article 17
Article 17 allows the debtor to request a stay of claims when applying for a protective settlement, provided it attaches a report from a trustee listed in the register of bankruptcy trustees.
للمدين -عند طلب افتتاح إجراء التسوية الوقائية- أن يطلب من المحكمة تعليق المطالبات، على أن يرفق بطلبه تقريراً معداً من أمين مدرج بقائمة أمناء الإفلاس يتضمن ترجيح
- Article 18
Article 18 sets the stay of claims at no more than 90 days, extendable by 30 days at the debtor's request up to a maximum of 180 days, and explains when the stay ends.
1- دون إخلال بأحكام الفصل (الرابع عشر) من النظام، للمحكمة تعليق المطالبات لمدة لا تزيد على (تسعين) يوماً من تاريخ افتتاح الإجراء، ولها تمديد هذه المدة لـ (ثلاثي
- Article 20
Article 20 prohibits any action or lawsuit against the debtor or its assets during the stay of claims, and enforcement on security or claims against a guarantor without court approval; any violating action is void.
1- لا يجوز خلال مدة تعليق المطالبات اتخاذ أو استكمال أي من الإجراءات أو التصرفات الآتية: أ- أي إجراء أو تصرف أو دعوى تجاه المدين أو أصوله، بما في ذلك التقدم بطل
- Article 21
Article 21 sets two cases in which the court approves enforcement on security during a stay of claims, addresses the request of a person who finds their property, and lifts the stay for specific claims.
1- توافق المحكمة -خلال مدة تعليق المطالبات- على طلب التنفيذ على أصول التفليسة أو أصول الضامن لدين المدين المقدمة كضمانات في الحالتين الآتيتين: أ- إذا لم يترتب ع
- Article 27
Article 27 limits the right to vote on a protective settlement proposal to a creditor or owner whose statutory or contractual rights are affected by the proposal.
لا يصوت على المقترح إلا الدائن أو المالك الذي يرتب المقترح أثراً في حقوقه النظامية أو التعاقدية، وفقاً لما تحدده اللائحة.
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.