Article 203 of the Saudi Bankruptcy Law
المادة 203 من نظام الإفلاس · الفصل الثالث عشر: العقوبات والتعاملات القابلة للإلغاء: نطاق التطبيق
The article sets the penalty for the acts criminalized in Articles 200, 201 and 202: imprisonment up to 5 years and a fine up to SAR 5 million or either, with possible bans on managing establishments.
Official text (Arabic)
This article has not been amended since the law was issued.
1- دون الإخلال بأي عقوبة أشد ينص عليها نظام آخر، يعاقب كل من ارتكب أياً من الأفعال المجرّمة المنصوص عليها في المواد (المائتين) و(الأولى بعد المائتين) و(الثانية بعد المائتين) من النظام بالسجن مدة لا تزيد على (خمس) سنوات وبغرامة لا تزيد على (خمسة) ملايين ريال أو بإحدى هاتين العقوبتين.
2- للمحكمة -إضافة للعقوبات الواردة في الفقرة (1) من هذه المادة- أن تحكم على المخالف لمدة
لا تزيد على (خمس) سنوات بواحدة أو أكثر من العقوبات الآتية:
أ- حظر إدارة أي منشأة ربحية أو تسيير أعمالها بشكل مباشر أو غير مباشر بصفته مديراً أو عضواً في مجلس الإدارة، وحظر مشاركته في أي منشأة ربحية تستتبع ملكيته فيها إدارته لها فعلاً أو حكماً.
ب- حظر تصويته على القرارات المتعلقة بالترشيح أو الترشح أو اختيار مرشح في أي منشأة ربحية.
ج- حظر تملك الحصص أو الأسهم في أي منشأة ربحية إذا كان يترتب على التملك قيامه بأعمال الإدارة فيها بشكل مباشر أو غير مباشر.
ويجوز لمن يعاقب بموجب الفقرة (2) من هذه المادة أن يطلب موافقة المحكمة على ممارسة أي من الأعمال المحظورة عليه.
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 203 explained in plain English
This is the article that sets the penalties for the criminalized acts stated in Articles 200, 201 and 202, without prejudice to any more severe penalty provided in another law.
First: the principal penalty
- Imprisonment for a term not exceeding 5 years.
- A fine not exceeding SAR 5 million.
- Or one of these two penalties.
Second: additional penalties
In addition to the above, the court may sentence the violator, for a period not exceeding 5 years, to one or more of the following:
- A ban on managing any for-profit establishment or running its business, directly or indirectly, as a manager or board member, and a ban on his participating in any for-profit establishment in which his ownership entails his actually or constructively managing it.
- A ban on his voting on decisions relating to nominating, standing as a candidate for, or choosing a candidate in, any for-profit establishment.
- A ban on owning shares or stakes in any for-profit establishment if the ownership results in his carrying out management work in it, directly or indirectly.
Anyone punished with any of these additional penalties may request the court's approval to carry out any of the activities banned to him.
Article 204 provides that the court notifies the Bankruptcy Committee of judgments issued under this chapter as soon as they are issued, and that the Committee sets up a register to keep the judgments imposing the additional penalties in paragraph 2 of this article, with the operative part made available for public inspection as specified by the Implementing Regulations. For an assessment of a specific situation, consult a lawyer specializing in bankruptcy and commercial cases or in criminal cases.
Practical example
A company manager in Riyadh was convicted of hiding its assets before its liquidation was opened. The court may punish him with imprisonment for up to 5 years and a fine of up to SAR 5 million, or either, and may also ban him from managing any for-profit establishment for up to 5 years. If he later wants to take up the management of an establishment during the ban period, he must request the court's approval.
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 203 of the Saudi Bankruptcy Law
What is the penalty for bankruptcy crimes in Saudi Arabia?
Imprisonment for up to 5 years and a fine of up to SAR 5 million, or either, without prejudice to any more severe penalty in another law.
Is a convicted person barred from managing companies?
The court may order a ban on his managing any for-profit establishment for up to 5 years, in addition to other bans stated in the article.
Can the ban on a convicted person be lifted?
Anyone punished with the additional penalties may request the court's approval to carry out any of the activities banned to him.
Articles this article refers to
- Article 200
The article lists acts by an individual debtor, a debtor's managers, board members, officers and others that violate the law if committed before or during bankruptcy and harm others.
دون الإخلال بأحكام الأنظمة ذات العلاقة، يعد مخالفاً لأحكام النظام كل مدين ذي صفة طبيعية أو مدير لدى مدين أو عضو في مجلس إدارته أو مجلس مديريه أو أي من مسؤوليه أ
- Article 201
The article lists acts that violate the Bankruptcy Law if committed by any person before bankruptcy and leading to it, or during it, and harming the parties' rights.
دون الإخلال بأحكام الأنظمة ذات العلاقة، يعد مخالفاً لأحكام النظام كل من ارتكب قبل افتتاح أي من إجراءات الإفلاس واحداً أو أكثر من الأفعال الآتية وأدى إلى افتتاحه
- Article 202
The article lists acts by a creditor, or someone claiming to be one, that violate the law, such as fraudulent claims, harmful arrangements with the debtor and abuse of procedures.
دون الإخلال بأحكام الأنظمة ذات العلاقة، يعد مخالفاً لأحكام النظام كل دائن أو من يدعي هذه الصفة ارتكب قبل افتتاح أي من إجراءات الإفلاس واحداً أو أكثر من الأفعال
More articles on Bankruptcy Offenses and Voidable Transactions
- Article 71
At an interested party's request, the court may annul the debtor's disposal of estate assets outside its usual business in breach of Article 70 and recover the assets, taking into account the rights of good-faith third parties.
إذا تصرف المدين في أي من أصول التفليسة خارج نطاق مزاولة نشاطه المعتاد بالمخالفة لحكم الفقرة (1/ن) من المادة (السبعين) من النظام، فللمحكمة أن تقضي -بناء على طلب
- Article 174
The article requires the Bankruptcy Committee to refer the matter to the relevant authority if it sees a need for further verification because of suspicion of a crime or violation in any claim or act.
على لجنة الإفلاس -إذا رأت حاجة لإجراء مزيد من التحقق لوجود شبهة جريمة أو مخالفة منصوص عليها في النظام في أي مطالبة أو تصرف- إحالة الأمر إلى الجهة المعنية.
- Article 200
The article lists acts by an individual debtor, a debtor's managers, board members, officers and others that violate the law if committed before or during bankruptcy and harm others.
دون الإخلال بأحكام الأنظمة ذات العلاقة، يعد مخالفاً لأحكام النظام كل مدين ذي صفة طبيعية أو مدير لدى مدين أو عضو في مجلس إدارته أو مجلس مديريه أو أي من مسؤوليه أ
- Article 201
The article lists acts that violate the Bankruptcy Law if committed by any person before bankruptcy and leading to it, or during it, and harming the parties' rights.
دون الإخلال بأحكام الأنظمة ذات العلاقة، يعد مخالفاً لأحكام النظام كل من ارتكب قبل افتتاح أي من إجراءات الإفلاس واحداً أو أكثر من الأفعال الآتية وأدى إلى افتتاحه
- Article 202
The article lists acts by a creditor, or someone claiming to be one, that violate the law, such as fraudulent claims, harmful arrangements with the debtor and abuse of procedures.
دون الإخلال بأحكام الأنظمة ذات العلاقة، يعد مخالفاً لأحكام النظام كل دائن أو من يدعي هذه الصفة ارتكب قبل افتتاح أي من إجراءات الإفلاس واحداً أو أكثر من الأفعال
- Article 204
The article requires the court to notify the Bankruptcy Committee at once of judgments under this chapter, and the Committee to keep a register of the bans issued under Article 203 whose operative part is public.
1- تبلغ المحكمة لجنة الإفلاس بالأحكام الصادرة بموجب هذا الفصل فور صدورها. 2- تنشئ لجنة الإفلاس سجلاً لحفظ ما يصدر من أحكام بمقتضى الفقرة (2) من المادة (الثالثة
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.