Article 134 of the Saudi Bankruptcy Law
المادة 134 من نظام الإفلاس · الفصل السادس: إجراء التسوية الوقائية لصغار المدينين: الموافقة على المقترح
The article sets out how creditors vote on the small debtors' protective settlement proposal and the quorum for accepting it, and what the court does if voting is impossible.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يصوت الدائنون على المقترح وفقاً للإجراءات الواردة فيه، وذلك بعد تصويت الملاك (إن وجدوا) بقبوله وفقاً للمادة (الثلاثين بعد المائة) من النظام.
2- يكون المقترح مقبولاً إذا صوت بالموافقة عليه دائنون تمثل مطالباتهم ثلثي قيمة ديون المصوتين، وكان من ضمنهم دائنون تمثل مطالباتهم أكثر من نصف قيمة ديون الأطراف غير ذوي العلاقة (إن وجدوا).
3- تحدد اللائحة الأحكام اللازمة لإدارة عملية التصويت المشار إليها في الفقرة (1) من هذه المادة.
4- إذا تعذر تصويت الدائنين على المقترح في الموعد المحدد، فتقضي المحكمة بما تراه مناسباً بما في ذلك تحديد موعد آخر للتصويت أو إنهاء إجراء التسوية الوقائية لصغار المدينين.
5- تحدد اللائحة آليات تعديل الخطة.
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 134 explained in plain English
This article governs the creditors' vote on the small debtor's proposal and the quorum needed for its acceptance.
1- Order of voting: The creditors vote according to the procedures set out in the proposal, after the owners vote (if there are any) to accept it under Article 130, which requires the owners to be called to vote if the proposal affects their rights.
2- Quorum for acceptance: The proposal is accepted if two conditions are met:
- Creditors whose claims represent two-thirds of the value of the debts of those voting vote in favor.
- Among them are creditors whose claims represent more than half of the value of the debts of non-related parties (if there are any).
The calculation is by the value of the debts, not the number of creditors, and the two-thirds is calculated from the debts of those who voted.
3- Running the vote: The Implementing Regulations specify the provisions needed to run the voting process.
4- Voting impossible: If the creditors cannot vote on the set date, the court rules as it sees fit, including setting another date or ending the procedure.
5- Amending the plan: The Implementing Regulations specify the mechanisms for amending it.
After the vote ends, Article 135 requires the small debtor to file the result with the court and in the bankruptcy register within 3 days. To assess a particular situation, consult a lawyer specializing in bankruptcy and commercial cases.
Practical example
A small establishment in Jazan has unsecured debts of SAR 900,000, and creditors with SAR 600,000 of that voted. Creditors with debts of SAR 420,000 of them approved, which is more than two-thirds of the debts of those voting (SAR 400,000). Because one of the creditors is a related party, it was also met that those in favor represent more than half of the debts of non-related parties, so the proposal was 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 134 of the Saudi Bankruptcy Law
What is the quorum for accepting a small debtors' protective settlement proposal?
Creditors whose claims represent two-thirds of the value of the debts of those voting must approve, and among them creditors whose claims represent more than half of the value of the debts of non-related parties, if there are any.
Do the creditors vote before the owners?
No. The creditors vote after the owners vote (if there are any) to accept the proposal under Article 130.
What happens if the creditors cannot vote on the date?
The court rules as it sees fit, including setting another date for the vote or ending the procedure.
Articles this article refers to
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.