Article 199 of the Saudi Bankruptcy Law
المادة 199 من نظام الإفلاس · الفصل الثاني عشر: توزيع الديون ذات الأولوية في غير إجراء التصفية
The article refers to the Implementing Regulations the order of priority of dues in bankruptcy procedures other than liquidation, liquidation for small debtors and administrative liquidation.
Official text (Arabic)
This article has not been amended since the law was issued.
تحدد اللائحة ترتيب أولوية المستحقات في غير إجراءات التصفية والتصفية لصغار المدينين والتصفية 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 199 explained in plain English
This article is a referral article: it does not set an order itself, but makes the Implementing Regulations the source that determines the order of priority of dues in procedures that are not:
- Liquidation.
- Liquidation for small debtors.
- Administrative liquidation.
That is, the order of priority in bankruptcy procedures other than these three is left to the Implementing Regulations, and the article says nothing about its content.
The article is linked to Article 198, which explains that the proceeds of selling the estate's assets are distributed among creditors of the same priority, and that if they are not enough to pay their debts they are distributed among them by pro rata sharing. As for the procedures this article covers, it does not set the order of priority itself but delegates it to the Implementing Regulations, so it should not be assumed that the order there is the same as the one set for liquidation.
Anyone who wants to know the order of priority in a procedure other than the three liquidation procedures mentioned should therefore consult the Implementing Regulations and what they provide. For an assessment of a specific situation, consult a lawyer specializing in bankruptcy and commercial cases.
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 199 of the Saudi Bankruptcy Law
Where do I find the order of priority of debts outside liquidation procedures?
The article refers the setting of this order to the Implementing Regulations.
Does the article set the order of priority in these procedures?
No. The article sets no order; it makes the order of priority of dues in procedures other than liquidation, liquidation for small debtors and administrative liquidation a matter for the Implementing Regulations.
More articles on Set-Off and Priority of Debts
- Article 81
A financial restructuring proposal may not include anything that contravenes the provisions of the law and relevant laws on set-off and priority of debts, and any contravening act is void.
لا يجوز أن يتضمن المقترح ما يخالف أحكام النظام والأنظمة ذات العلاقة بشأن حقوق المقاصة وأولويات الديون، ويعد باطلاً أي تصرف خلاف ذلك.
- Article 82
The trustee sells the bankruptcy estate assets securing the debtor's debt under the plan and with court approval, deposits the net proceeds in a separate account for the secured creditor, and the surplus in the debtor's account.
يتولى الأمين -بناء على الخطة وبعد موافقة المحكمة- بيع أي من أصول التفليسة الضامنة لدين المدين خلال فترة الإجراء بالأسعار المتداولة وقت البيع. وعليه بعد استيفاء
- Article 113
The article makes undue debts that are established against the debtor payable and due as soon as the liquidation procedure is opened.
تكون الديون غير الحالة الثابتة في ذمة المدين واجبة ومستحقة الأداء فور افتتاح إجراء التصفية.
- Article 116
The article governs the trustee's decision to distribute the proceeds of selling the estate assets to creditors, notice of it, objecting to it, and reserving amounts for debts in court dispute.
1- يصدر الأمين قراراً بتوزيع حصيلة بيع أصول التفليسة على الدائنين وفقاً لما تحدده اللائحة، ويتولى الأمين توزيع هذه الحصيلة على الدائنين مرة واحدة وفقاً لترتيب ا
- Article 187
The article provides that any secured financing the court approves is considered priority financing.
كل تمويل مضمون توافق عليه المحكمة يعد تمويلاً ذا أولوية.
- Article 188
The article prohibits automatic set-off after protective settlement and financial reorganization (and their small debtor versions) open, and allows the proposal to provide for set-off of specified mutual debts.
مع مراعاة أحكام الفصل (الرابع عشر) من النظام، تحظر المقاصة التلقائية بعد افتتاح أي من الإجراءات الآتية: أ - التسوية الوقائية. ب - إعادة التنظيم المالي. ج - التس
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.