Article 158 of the Saudi Bankruptcy Law
المادة 158 من نظام الإفلاس · الفصل السابع: إجراء إعادة التنظيم المالي لصغار المدينين: إنهاء الإجراء
The article lets the court, of its own motion or at an interested party's request, open liquidation for small debtors or administrative liquidation after reorganization ends, on three conditions.
Official text (Arabic)
This article has not been amended since the law was issued.
تقضي المحكمة -من تلقاء نفسها أو بناء على طلب ذي مصلحة - بافتتاح إجراء التصفية لصغار المدينين أو التصفية الإدارية إذا تحققت الشروط الآتية:
أ- أن يكون المدين الصغير متعثراً أو مفلساً.
ب- استيفاء شروط افتتاح إجراء التصفية لصغار المدينين أو إجراء التصفية الإدارية المراد افتتاحه.
ج- أن يكون إنهاء إعادة التنظيم المالي لصغار المدينين مبنياً على الفقرة (ج) أو الفقرة (د) أو الفقرة (هـ) أو الفقرة (و) أو الفقرة (ز) من المادة (السادسة والخمسين بعد المائة) من 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 158 explained in plain English
This article deals with the move from financial reorganization to liquidation for the small debtor. The court may, of its own motion or at the request of an interested party, rule to open:
- the liquidation procedure for small debtors, or
- the administrative liquidation procedure.
This is so if the three conditions are all met:
- The small debtor is distressed or bankrupt.
- The conditions for opening the liquidation procedure for small debtors or the administrative liquidation procedure to be opened are met, and these are conditions set out in the articles specific to each.
- The ending of the financial reorganization for small debtors was based on paragraph (c), (d), (e), (f) or (g) of Article 156.
So merely ending the reorganization is not enough; the ending must be based specifically on one of the five paragraphs mentioned of Article 156, with the other two conditions also met. The ending does not release the guarantor of the plan's implementation from its obligations, as Article 157 provides. To assess the prospects of a move to liquidation, it is advisable to consult a lawyer specialized in bankruptcy and commercial matters.
Practical example
The court ended the financial reorganization of a small tailoring establishment in Taif because the plan could not be implemented. The establishment was distressed, its business could not continue, and its assets were enough to cover the liquidation expenses, so the court could rule of its own motion to open liquidation for small debtors.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
How we write and review contentA question about Article 158 of Bankruptcy Law?
Describe what happened and specialist lawyers answer. You can write in English.
- Completely free
- Lawyers from the directory answer
- Your name stays hidden
Commercial & Corporate Law lawyers: ask a specialist about your case
Describe your situation briefly and we'll suggest a lawyer who specialises in this law
Commercial & Corporate Law lawyers
Lawyers who handle this kind of case
شركة امتداد النظام للمحاماة والاستشارات المهنية
- Labour & Employment Law
- Criminal Law
- Criminal Law
- Commercial & Corporate Law
Frequently asked questions about Article 158 of the Saudi Bankruptcy Law
Does the court move to liquidation automatically if reorganization fails?
The court may do so of its own motion or at an interested party's request, but on condition that the debtor is distressed or bankrupt, that the conditions of the procedure to be opened are met, and that the ending was based on one of paragraphs (c) to (g) of Article 156.
Do creditors have to apply to open liquidation after reorganization ends?
No. The court may rule on this of its own motion, and an interested party may also request it.
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.