Article 168 of the Saudi Bankruptcy Law
المادة 168 من نظام الإفلاس · الفصل التاسع: إجراء التصفية الإدارية: شروط افتتاح الإجراء
The article lets the debtor or the competent authority request administrative liquidation for a distressed or bankrupt debtor whose assets do not cover liquidation expenses, and regulates notifying the debtor and its objection.
Official text (Arabic)
This article has not been amended since the law was issued.
1- للمدين أو الجهة المختصة التقدم إلى المحكمة بطلب افتتاح إجراء التصفية الإدارية إذا كان المدين متعثراً أو مفلساً وكانت أصوله لا تكفي للوفاء بمصروفات إجراء التصفية أو إجراء التصفية لصغار المدينين، ويقيد طلب افتتاح الإجراء لدى المحكمة بعد تقديمه مرافقاً له المعلومات والوثائق ذات العلاقة، وفقاً لما تحدده اللائحة.
2- إذا تقدمت الجهة المختصة بطلب افتتاح الإجراء، فعلى المحكمة تبليغ المدين بالطلب خلال مدةةلا تزيد على (خمسة) أيام من تاريخ تقديمه. وللمدين الاعتراض على الطلب وتقديم طلب افتتاح أي من إجراءات الإفلاس الأخرى. وللمحكمة أن تأمر المدين بتقديم المعلومات والوثائق التي تحددها اللائحة.
3- يلتزم المدين إذا تقدم بطلب افتتاح الإجراء بتبليغ دائنيه وفقاً لما تحدده اللائحة.
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 168 explained in plain English
This article regulates the request to open the administrative liquidation procedure.
Who submits the request? The debtor or the competent authority. The article does not list the creditor among those who submit it.
Conditions:
- The debtor is distressed or bankrupt.
- Its assets are not enough to meet the expenses of the liquidation procedure or the liquidation procedure for small debtors.
The request is registered with the court after submission, accompanied by the relevant information and documents, as specified by the Implementing Regulations.
If the competent authority submits the request:
- The court must notify the debtor of the request within no more than 5 days of its submission.
- The debtor may object to the request and submit a request to open any of the other bankruptcy procedures.
- The court may order the debtor to submit the information and documents specified by the Implementing Regulations.
If the debtor submits the request: it must notify its creditors as specified by the Implementing Regulations.
Registering the request has important effects: Article 169 makes registering the opening request, or the opening, a ground for suspending claims. To assess your business's position before submitting the request or objecting to it, it is advisable to consult a lawyer specialized in bankruptcy and commercial matters.
Practical example
A small establishment in Tabuk stopped operating and has only simple office furniture left, which is not enough for the liquidation expenses. Its owner submitted a request to open administrative liquidation with the required documents, and must notify his creditors of it as specified by the Implementing Regulations.
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 168 of the Saudi Bankruptcy Law
Who may request opening administrative liquidation?
The debtor or the competent authority, if the debtor is distressed or bankrupt and its assets are not enough for the expenses of liquidation or liquidation for small debtors.
Can the debtor object if the competent authority submits the request?
Yes. The debtor may object to the request and submit a request to open any of the other bankruptcy procedures.
Must the debtor notify its creditors if it requests administrative liquidation?
Yes. A debtor that submits the request must notify its creditors as specified by the Implementing Regulations.
More articles on Administrative Liquidation
- Article 90
The court opens liquidation or administrative liquidation after financial restructuring ends if the debtor is distressed or bankrupt, the procedure's conditions are met, and the ending was for specified grounds.
تقضي المحكمة -من تلقاء نفسها أو بناء على طلب من ذي مصلحة- بافتتاح إجراء التصفية أو التصفية الإدارية إذا تحققت الشروط الآتية: أ - أن يكون المدين متعثراً أو مفلسا
- Article 122
The article sets out two cases in which the court ends the liquidation procedure at the trustee's request, allows it without a hearing, and provides for dissolving a debtor with legal personality.
1- تقضي المحكمة بإنهاء إجراء التصفية في الحالتين الآتيتين: أ- إذا تقدم الأمين بطلب إنهاء الإجراء لعدم كفاية حصيلة بيع أصول التفليسة للوفاء بمصروفات إجراء التصفي
- Article 123
The article requires the court to open administrative liquidation and refer the papers to the Bankruptcy Committee if it ended the liquidation because the sale proceeds were insufficient for its expenses.
تقضي المحكمة بافتتاح إجراء التصفية الإدارية للمدين إذا قضت بإنهاء الإجراء بموجب الفقرة (1/أ) من المادة (الثانية والعشرين بعد المائة) من النظام، وتحيل أوراق الدع
- Article 158
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.
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 الصغ
- Article 164
The article requires the trustee to ask the court to end liquidation for small debtors as soon as it learns that proceeds from selling the estate's assets will not cover the procedure's expenses.
يلتزم الأمين بتقديم طلب إلى المحكمة لإنهاء إجراء التصفية لصغار المدينين فور علمه بعدم كفاية حصيلة بيع أصول التفليسة للوفاء بمصروفات إجراء التصفية لصغار المدينين
- Article 167
The article states that administrative liquidation aims to sell bankruptcy estate assets whose sale is not expected to produce proceeds enough for the expenses of liquidation or small debtor liquidation.
يهدف إجراء التصفية الإدارية إلى بيع أصول التفليسة التي لا يتوقع أن ينتج عن بيعها حصيلة تكفي للوفاء بمصروفات إجراء التصفية أو إجراء التصفية لصغار المدينين.
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.