Article 173 of the Saudi Bankruptcy Law
المادة 173 من نظام الإفلاس · الفصل التاسع: إجراء التصفية الإدارية: الإعلان عن التصفية الإدارية وتقديم المطالبات إلى لجنة الإفلاس
The article requires the Bankruptcy Committee to prepare the list of claims as specified by the Implementing Regulations, and to be bound by the approved creditors' list, if any, when administrative liquidation follows another procedure's ending.
Official text (Arabic)
This article has not been amended since the law was issued.
1- تعد لجنة الإفلاس قائمة بالمطالبات وفقاً لما تحدده اللائحة.
2- إذا افتتح إجراء التصفية الإدارية -بموجب حكم المحكمة بإنهاء أي من إجراءات الإفلاس وافتتاح هذا الإجراء- تتقيد لجنة الإفلاس بقائمة الدائنين المعتمدة -إن وجدت- وإلا يطبق حكم الفقرة (1) من هذه المادة.
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 173 explained in plain English
This article deals with the list of claims in the administrative liquidation procedure.
The rule: the Bankruptcy Committee prepares a list of claims as specified by the Implementing Regulations. The article does not detail the method of preparation, but refers it to the Implementing Regulations.
If administrative liquidation comes after another procedure: if the administrative liquidation procedure is opened under a court ruling ending any of the bankruptcy procedures and opening this procedure, the Bankruptcy Committee:
- is bound by the approved creditors' list, if there is one;
- and if there is no approved list, prepares the list as specified by the Implementing Regulations, as in the rule.
The practical benefit: for a creditor whose claim was approved in a creditors' list in the previous procedure, the committee is bound by that approved list when the debtor moves to administrative liquidation, and matters do not start from zero.
This list comes after the invitation to creditors to submit their claims under Article 172. If the committee sees a suspicion of a crime or violation in any claim, it must refer the matter to the relevant authority, as Article 174 provides. To review the status of your claim in the list, it is advisable to consult a lawyer specialized in bankruptcy and commercial matters.
Practical example
A supplier in Jeddah had his claim approved in the creditors' list during an earlier bankruptcy procedure for an establishment, and the court then ended that procedure and opened administrative liquidation. Here the Bankruptcy Committee is bound by the approved creditors' list in which his name appears.
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 173 of the Saudi Bankruptcy Law
Who prepares the list of claims in administrative liquidation?
The Bankruptcy Committee prepares it as specified by the Implementing Regulations.
If my claim was approved in an earlier procedure, is it approved in administrative liquidation?
If administrative liquidation is opened under a court ruling ending another bankruptcy procedure and opening this one, the Bankruptcy Committee is bound by the approved creditors' list, if there is one.
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.