Article 139 of the Saudi Bankruptcy Law
المادة 139 من نظام الإفلاس · الفصل السادس: إجراء التسوية الوقائية لصغار المدينين: إنهاء الإجراء
The article lists seven cases in which the court ends the protective settlement procedure for small debtors, including completed implementation of the plan, failure of the quorum, and voidness of the plan.
Official text (Arabic)
This article has not been amended since the law was issued.
تقضي المحكمة بإنهاء إجراء التسوية الوقائية لصغار المدينين في أي من الحالات الآتية:
أ- إذا تقدم المدين الصغير إلى المحكمة بطلب إنهاء الإجراء لاكتمال تنفيذ الخطة.
ب- إذا لم يتحقق النصاب المطلوب في تصويت الملاك أو الدائنين على المقترح أو تعذر تصويت الدائنين عليه في الموعد المحدد, وذلك دون إخلال بالفقرة (4) من المادة (الرابعة والثلاثين بعد المائة) من النظام.
ج- إذا قضت المحكمة ببطلان الخطة.
د- إذا تقدم المدين الصغير بطلب إنهاء الإجراء لكون شروط افتتاح الإجراء لم تعد منطبقة عليه.
هـ- إذا تقدم المدين الصغير أو الدائن بطلب إنهاء الإجراء لتعذر تنفيذ الخطة.
و- إذا تقدم المدين الصغير بطلب إنهاء الإجراء لعدم رغبته في الاستمرار في إدارة نشاطه أو استكمال تنفيذ الخطة.
ز- إذا تقدم ذو مصلحة بطلب إنهاء الإجراء لوجود مخالفات مؤثرة خلال الإجراء أو لارتكاب المدين الصغير لفعل من الأفعال المجرمة في النظام.
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 139 explained in plain English
This article sets out the cases in which the court ends the protective settlement procedure for small debtors, which are:
- Completed implementation of the plan, at the small debtor's request.
- Failure to reach the required quorum in the vote of the owners or creditors, or the creditors being unable to vote on the set date, without prejudice to paragraph (4) of Article 134, which allows the court, when voting is not possible, to rule as it sees fit, including by setting another date.
- A ruling that the plan is void.
- The conditions for opening the procedure no longer applying to the debtor, at the debtor's request.
- Inability to implement the plan, at the request of the small debtor or a creditor.
- The debtor's unwillingness to continue managing the business or to complete implementation of the plan, at the debtor's request.
- Material violations during the procedure, or the debtor committing an act criminalized by the Law, at the request of an interested party.
Note that most of the cases require a request from a specific person: the debtor alone in some, the debtor or a creditor where implementation is impossible, and any interested party in the case of violations and criminalized acts.
The matter does not always end with the file being closed. Article 140 provides that the court opens the appropriate bankruptcy procedure if the debtor is distressed or bankrupt, the conditions of the procedure to be opened are met, and the ending was based on case (b), (c), (e), (f) or (g). Article 138 governs the ruling that the plan is void after an objection. For a particular situation, it is advisable to consult a lawyer specialized in bankruptcy and commercial matters.
Practical example
A small establishment in Riyadh began implementing a settlement plan, then lost its largest customer and could no longer pay the installments. One of the creditors applied to the court to end the procedure because the plan could not be implemented, which is one of the cases in which the court rules to end it.
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 139 of the Saudi Bankruptcy Law
When does the protective settlement for small debtors end?
In cases that include completed implementation of the plan, failure of the quorum or inability to vote, voidness of the plan, inability to implement it, the debtor's unwillingness to continue, and material violations or criminalized acts.
Can a creditor apply to end the protective settlement for small debtors?
Yes. A creditor may apply for it because the plan cannot be implemented, and any interested party may apply for it because of material violations or because the debtor committed an act criminalized by the Law.
Can the small debtor end the procedure by choice?
Yes. The debtor may apply to end it because they no longer wish to continue managing the business or completing the plan, or because the conditions for opening the procedure no longer apply to them.
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.