Article 131 of the Saudi Bankruptcy Law

المادة 131 من نظام الإفلاس · الفصل السادس: إجراء التسوية الوقائية لصغار المدينين: تعليق المطالبات

The article lets a small debtor ask the court to suspend claims for no more than 90 days, and explains when that period ends.

Official text (Arabic)

This article has not been amended since the law was issued.

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 على (تسعين) يوماً، وتصدر المحكمة حكمها خلال (خمسة) أيام من تقديم الطلب.

2- تنتهي مدة تعليق المطالبات بانقضاء المدة المحددة في الفقرة (1) من هذه المادة أو قبل ذلك بتصويت الدائنين بالموافقة على المقترح أو عدم تحقق النصاب المطلوب في تصويت الملاك أو الدائنين على المقترح أو بإنهاء الإجراء.

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 131 explained in plain English

This article gives the small debtor temporary protection from creditors' claims while it seeks to settle its debts, called the suspension of claims.

1- The request for suspension:

The small debtor files it with the court.
The request is made during the period from the opening of the procedure to the creditors' approval of the proposal.
The suspension period is no more than 90 days.
The court issues its judgment within 5 days of the filing of the request.

Note that the suspension is not an automatic effect of opening this procedure, but needs a request and a judgment from the court.

2- The end of the suspension: It ends on the earliest of the following:

The period the court set expires.
The creditors vote to approve the proposal.
The required quorum is not met in the owners' or creditors' vote.
The procedure is ended.

Article 132 explains that the request for suspension is filed on the Bankruptcy Committee's form with a summary of the content of the proposal, and the court may ask for supporting documents. It is connected to Article 130 on calling the owners to vote on the proposal if it affects their rights. To assess a particular situation, consult a lawyer specializing in bankruptcy and commercial cases.

Practical example

After the owner of a workshop in Buraydah opened the protective settlement procedure for small debtors, one of the creditors began taking action against him. He applied to the court for a suspension of claims for 60 days, and the court issued its judgment within 5 days. After 40 days the creditors approved the proposal, so the suspension ended at that point.

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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