Article 117 of the Saudi Bankruptcy Law
المادة 117 من نظام الإفلاس · الفصل الخامس: إجراء التصفية: التوزيع على الدائنين
The article governs the right of a creditor who files its claim after some distributions or after the final distribution, and the limits of what it can obtain.
Official text (Arabic)
This article has not been amended since the law was issued.
1- في حال وجود أكثر من قرار توزيع، وتقدم أي من الدائنين بمطالبة قبل تنفيذ قرار التوزيع النهائي فيعطى ما يستوفي حقه مما فاته من التوزيعات السابقة بنفس نسبة ما تم توزيعه على الدائنين -مع مراعاة ترتيب الأولوية- ما لم يتعذر ذلك.
2- إذا تقدم أي من الدائنين بمطالبة بعد تنفيذ قرار التوزيع الأوحد أو النهائي فلا تؤدى المطالبة إلا في حال وجود أصول متبقية أو تملك المدين أصولاً بعد إجراء التوزيع وقبل انتهاء إجراء التصفية.
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 117 explained in plain English
This article deals with the position of a creditor who files a claim after distribution of the liquidation proceeds has begun, and distinguishes between two cases:
The first case: several distribution decisions, and the creditor files before the final decision is carried out:
- The creditor is given what satisfies its right in respect of the earlier distributions it missed.
- This is done at the same rate as was distributed to the creditors, taking into account the order of priority.
- Unless that is impracticable.
The second case: the creditor files after the single or final distribution decision has been carried out:
- Its claim is paid only if there are remaining assets, or if the debtor acquires assets after the distribution and before the liquidation procedure ends.
The practical meaning is that lateness has a graduated cost: someone who files before the final distribution can be compensated for what it missed at the rate others received, while someone who files after the distribution is complete has a right that depends on there being remaining assets or new assets of the debtor before the procedure ends.
This article is connected to Article 116, which makes distributing the proceeds once the rule, with more than one distribution allowed with the court's approval. It is followed by Article 118, which allows non-cash assets to be distributed to creditors. To assess a particular situation, consult a lawyer specializing in bankruptcy and commercial cases.
Practical example
The liquidation trustee of a company in Riyadh made two distributions in which each ordinary creditor received 30% of its claim. A new creditor then filed before the final distribution was carried out, so it is first given the equivalent of 30% of its claim for what it missed in the two earlier distributions, taking into account the order of priority, unless that is impracticable.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
How we write and review contentA question about Article 117 of Bankruptcy Law?
Describe what happened and specialist lawyers answer. You can write in English.
- Completely free
- Lawyers from the directory answer
- Your name stays hidden
Commercial & Corporate Law lawyers: ask a specialist about your case
Describe your situation briefly and we'll suggest a lawyer who specialises in this law
Commercial & Corporate Law lawyers
Lawyers who handle this kind of case
شركة امتداد النظام للمحاماة والاستشارات المهنية
- Labour & Employment Law
- Criminal Law
- Criminal Law
- Commercial & Corporate Law
Frequently asked questions about Article 117 of the Saudi Bankruptcy Law
What does a creditor get who files after earlier distributions?
If it files before the final distribution decision is carried out, it is given what it missed in the earlier distributions at the same rate as was distributed to the creditors, taking into account the order of priority, unless that is impracticable.
Is a claim filed after the final distribution paid?
It is paid only if there are remaining assets, or if the debtor acquires assets after the distribution and before the liquidation procedure ends.
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.