Article 176 of the Saudi Bankruptcy Law
المادة 176 من نظام الإفلاس · الفصل التاسع: إجراء التصفية الإدارية: الإعلان عن التصفية الإدارية وتقديم المطالبات إلى لجنة الإفلاس
The article makes debts not yet due that are established against the debtor payable and due immediately on opening administrative liquidation.
Official text (Arabic)
This article has not been amended since the law was issued.
تكون الديون غير الحالّة الثابتة في ذمة المدين واجبة ومستحقة الأداء فور افتتاح إجراء التصفية الإدارية.
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 176 explained in plain English
This article sets out an important rule for creditors: deferred debts fall due on opening administrative liquidation.
Which debts? Debts not yet due, that is, whose payment date has not yet arrived, provided they are established against the debtor.
What is the effect? These debts become payable and due.
When? Immediately on opening the administrative liquidation procedure, not from the date the request is registered.
The practical meaning: a creditor owed a deferred debt by the debtor, such as installments whose date has not arrived, does not wait for the original due dates, but its debt is treated as due from the date of opening.
The text requires the debt to be established against the debtor, so a mere assertion of a debt is not enough. The article does not address debts the debtor is owed by others, but debts owed by the debtor.
To assess the value of a deferred debt and claim it in the procedure, it is advisable to consult a lawyer specialized in bankruptcy and commercial matters.
Practical example
An equipment leasing company in Dammam sold equipment to an establishment in 12 installments, of which 7 installments had not yet fallen due. When administrative liquidation of the establishment was opened, the seven installments established against it became payable and due immediately.
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 176 of the Saudi Bankruptcy Law
Do deferred installments fall due on the debtor's administrative liquidation?
Yes. Debts not yet due that are established against the debtor are payable and due immediately on opening the administrative liquidation procedure.
When do deferred debts fall due: on submitting the request or on opening?
The text ties this to the opening of the administrative liquidation procedure.
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.