Article 130 of the Saudi Bankruptcy Law
المادة 130 من نظام الإفلاس · الفصل السادس: إجراء التسوية الوقائية لصغار المدينين: الإجراء
The article requires a small debtor to call the owners to vote on the proposal if it affects their rights, at least 21 days before the voting date and before the creditors vote.
Official text (Arabic)
This article has not been amended since the law was issued.
إذا تضمن المقترح ما يؤثر في حقوق الملاك، فعلى المدين الصغير دعوتهم إلى التصويت على المقترح قبل حلول موعد التصويت بـ(واحد وعشرين) يوماً على الأقل وفقاً لما تنص عليه الأنظمة ذات العلاقة، على أن يكون ذلك قبل موعد تصويت الدائنين.
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 130 explained in plain English
This article deals with the case where the settlement proposal affects the owners' rights, that is, the owners of the small debtor, such as the partners in a small company.
When does the provision apply? Only if the proposal includes anything affecting the owners' rights. If it does not touch them, this article does not apply.
What must the debtor do?
- Call the owners to vote on the proposal.
- The call must be made at least 21 days before the voting date.
- The call must be made as provided by the relevant laws.
- This must be done before the creditors vote.
The reasoning is that owners have a stake in any change affecting their rights, so the proposal is put to them first.
This article complements Article 129, which requires the small debtor to prepare the proposal, file it with the decision to open in the bankruptcy register, and call its unsecured creditors to vote. It is also connected to Article 131, which ends the suspension period of claims if the required quorum is not met in the owners' or creditors' vote on the proposal. To assess a particular situation, consult a lawyer specializing in bankruptcy and commercial cases.
Practical example
A small company in Khobar owned by three partners has a settlement proposal that includes converting part of a supplier's debts into a share in the company, which affects the partners' rights. The company called them to vote on the proposal at least 21 days before the voting date, and before the creditors voted.
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 130 of the Saudi Bankruptcy Law
Do partners vote on the protective settlement proposal for small debtors?
Yes. If the proposal includes anything affecting the owners' rights, the small debtor must call them to vote on it.
When must the owners be called to vote?
At least 21 days before the voting date, as provided by the relevant laws, and before the creditors vote.
More articles on Small Debtor Bankruptcy Procedures
- Article 102
Opening the liquidation leads to the start of liquidating the bankruptcy estate assets, carried out by the trustee, except what the court approves an individual debtor keeping for the living of the debtor and dependents.
1- يترتب على افتتاح إجراء التصفية البدء في تصفية أصول التفليسة. 2- يتولى الأمين تصفية أصول التفليسة عدا ما وافقت المحكمة على احتفاظ المدين ذي الصفة الطبيعية به
- Article 127
The article states that the aim of the protective settlement for small debtors is to let a small debtor agree with its creditors on settling its debts through simple, low-cost procedures while it keeps managing its business.
يهدف إجراء التسوية الوقائية لصغار المدينين إلى تمكين المدين الصغير من التوصل إلى اتفاق مع دائنيه لتسوية ديونه خلال فترة معقولة عبر إجراءات يسيرة بتكلفة منخفضة و
- Article 128
The article lets a small debtor choose the ordinary protective settlement, and bars it from opening a small debtors' settlement if it was subject to it or to a protective settlement in the preceding 12 months.
1- للمدين الصغير طلب افتتاح إجراء التسوية الوقائية بدلاً من افتتاح إجراء التسوية الوقائية لصغار المدينين. 2- لا يجوز للمدين افتتاح إجراء التسوية الوقائية لصغار
- Article 129
The article allows a small debtor that is distressed, bankrupt or expecting distress to issue a decision opening the small debtors' protective settlement and file it with its proposal in the bankruptcy register.
1- للمدين الصغير إذا كان يتوقع مواجهة اضطرابات مالية يخشى معها تعثره أو كان متعثراً أو مفلساً، أن يصدر قراراً بافتتاح إجراء التسوية الوقائية لصغار المدينين وفق
- Article 131
The article lets a small debtor ask the court to suspend claims for no more than 90 days, and explains when that period ends.
1- للمدين الصغير أن يطلب من المحكمة -خلال المدة من افتتاح إجراء التسوية الوقائية لصغار المدينين إلى موافقة الدائنين على المقترح- تعليق المطالبات لمدة لا تزيد عل
- Article 132
The article governs the form of the request to suspend claims and its attachments, and allows the court to ask for supporting documents, including a statement that creditor approval is likely.
1- يُقدم طلب تعليق المطالبات إلى المحكمة وفق النموذج الذي تصدره لجنة الإفلاس، على أن يرفق به نبذة عن مضمون المقترح وما تحدده اللائحة. 2- للمحكمة أن تطلب من المد
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.