Article 133 of the Saudi Bankruptcy Law
المادة 133 من نظام الإفلاس · الفصل السادس: إجراء التسوية الوقائية لصغار المدينين: تعليق المطالبات
After claims are suspended, the article bars bankruptcy requests and action against estate assets and voids contrary acts, excepts secured debts, and requires any excess to be returned within 3 days.
Official text (Arabic)
This article has not been amended since the law was issued.
1- دون إخلال بأحكام الفصل (الرابع عشر) من النظام، إذا قررت المحكمة تعليق المطالبات فلا يجوز:
أ- تقديم طلب افتتاح أي من إجراءات الإفلاس.
ب- اتخاذ أو استكمال أي تصرف أو إجراء قانوني تجاه أصول التفليسة.
ج- اتخاذ أو استكمال أي من الإجراءات التي تنص عليها اللائحة.
2- يقع باطلاً كل تصرف يخالف حكم الفقرة (1) من هذه المادة، وللمحكمة من تلقاء نفسها أو بناء على طلب ذي مصلحة أن تقضي باسترداد أي أصول جرى التصرف فيها أو بما تراه مناسباً، وذلك مع مراعاة حقوق الغير (حسن النية)، وللمتضرر أن يتقدم بدعوى التعويض.
3- استثناء من حكم الفقرة (1) من هذه المادة، لا يسري تعليق المطالبات على الديون المضمونة، ويلتزم الدائن المضمون عند التنفيذ على المال الضامن لدينه برد ما زاد على دينه إلى المدين الصغير خلال (ثلاثة) أيام من انتهاء التنفيذ على المال الضامن.
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 133 explained in plain English
This article explains the consequences of the court's judgment suspending claims in the protective settlement procedure for small debtors, without prejudice to the provisions of Chapter Fourteen of the law.
1- What is not allowed during the suspension:
- Filing a request to open any bankruptcy procedure.
- Taking or completing any act or legal action against the bankruptcy estate assets.
- Taking or completing any of the procedures provided for by the Implementing Regulations.
2- Penalty for violation: Any act contrary to this is void. The court, on its own motion or at the request of an interested party, may rule to recover the assets disposed of or as it sees fit, taking into account the rights of good-faith third parties. The injured party may bring a claim for compensation.
3- Exception for secured debts: The suspension does not apply to secured debts, so a secured creditor may enforce against the property securing its debt, but it must return any excess over its debt to the small debtor within 3 days of finishing enforcement against the securing property.
Article 132 governs how the request to suspend is filed, while Article 134 sets out how the creditors vote on the proposal and the quorum for its acceptance. To assess a particular situation, consult a lawyer specializing in bankruptcy and commercial cases.
Practical example
The court suspended claims against a small establishment in Madinah. One of the unsecured suppliers tried to attach its goods, and this action was barred during the suspension. A bank holding a mortgage over a transport vehicle enforced against the vehicle because its debt is secured, and it sold for more than the debt, so the bank was obliged to return the difference to the establishment within 3 days of finishing the enforcement.
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 133 of the Saudi Bankruptcy Law
Does suspension of claims bar attaching a small debtor's funds?
Yes. During the suspension no act or legal action may be taken or completed against the bankruptcy estate assets, and any contrary act is void.
Does the suspension of claims cover a creditor secured by a mortgage?
No. The suspension does not apply to secured debts, but the secured creditor must return any excess over its debt to the small debtor within 3 days of finishing enforcement against the securing property.
What if someone disposes of the debtor's assets during the suspension?
The act is void, and the court may rule to recover the assets or as it sees fit, taking into account the rights of good-faith third parties, and the injured party may bring a claim for compensation.
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 130
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.
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 ع
- 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
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.