Article 40 of the Saudi Bankruptcy Law
المادة 40 من نظام الإفلاس · الفصل الثالث: إجراء التسوية الوقائية: إنهاء الإجراء
The debtor must file the court's ruling terminating the protective settlement procedure in the bankruptcy register within no more than 5 days.
Official text (Arabic)
This article has not been amended since the law was issued.
يلتزم المدين بإيداع حكم المحكمة بإنهاء الإجراء في سجل الإفلاس، خلال مدة لا تزيد على (خمسة) أيام.
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 40 explained in plain English
This article imposes a procedural duty on the debtor after the court rules to terminate the protective settlement procedure, which is filing the ruling in the bankruptcy register.
Elements of the obligation:
- Who is bound: The debtor itself.
- Subject of the obligation: The court's ruling terminating the procedure.
- Place of filing: The bankruptcy register.
- Period: No more than 5 days.
The text does not distinguish between the grounds for termination, so the duty applies whichever of the cases listed in Article 39 the ruling was based on, whether the termination was for completion of the plan, failure of the vote, refusal of approval or otherwise.
Termination may not be the end of the road in every case; Article 41 allows the court, on its own initiative or at the request of an interested party, to open the appropriate bankruptcy procedure if the debtor is in financial distress or insolvent and meets the conditions of the procedure to be opened, and the termination was based on paragraph (b), (c), (e), (f) or (g) of Article 39.
To understand what follows from a termination ruling in a particular situation, it is advisable to 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 40 of the Saudi Bankruptcy Law
What is the period for filing the ruling terminating the protective settlement?
No more than 5 days.
Who files the termination ruling in the bankruptcy register?
The debtor is the one obligated to file the ruling.
Is filing required whatever the reason for termination?
The text is general as to the court's ruling terminating the procedure, without distinguishing between its grounds.
More articles on Protective Settlement
- Article 13
Article 13 allows a debtor at risk of default, defaulting or bankrupt to request the opening of protective settlement, and bars it if it underwent the procedure in the previous twelve months.
1- دون الإخلال بأحكام الأنظمة ذات العلاقة، للمدين التقدم إلى المحكمة بطلب افتتاح إجراء التسوية الوقائية في أي من الحالات الآتية: أ- إذا كان من المرجح أن يعاني م
- Article 14
Article 14 requires the protective settlement request to be accompanied by the proposal, information and documents, and the proposal to include the debtor's financial position and a classification of creditors into classes.
1- يقيد طلب افتتاح إجراء التسوية الوقائية لدى المحكمة بعد تقديمه مرافقاً له المقترح والمعلومات والوثائق ذات العلاقة، وفقاً لما تحدده اللائحة. 2- يجب أن يتضمن ال
- Article 15
Article 15 governs how the court hears a protective settlement application within 40 days, and when it opens the procedure, rejects the application, or adjourns the hearing for up to 21 days.
1- تحدد المحكمة موعداً للنظر في طلب افتتاح إجراء التسوية الوقائية على أن يكون الموعد خلال مدة لا تزيد على (أربعين) يوماً من تاريخ قيد الطلب، وتبلغ المحكمة المدي
- Article 16
Article 16 requires the ruling opening a protective settlement to set a creditors' vote within 40 days, extendable by another 40 days, and requires the debtor to announce the opening within 7 days.
1- تحدد المحكمة في حكمها الصادر بافتتاح إجراء التسوية الوقائية موعداً لتصويت الدائنين على المقترح، على أن يكون الموعد خلال مدة لا تزيد على (أربعين) يوماً من تار
- Article 17
Article 17 allows the debtor to request a stay of claims when applying for a protective settlement, provided it attaches a report from a trustee listed in the register of bankruptcy trustees.
للمدين -عند طلب افتتاح إجراء التسوية الوقائية- أن يطلب من المحكمة تعليق المطالبات، على أن يرفق بطلبه تقريراً معداً من أمين مدرج بقائمة أمناء الإفلاس يتضمن ترجيح
- Article 18
Article 18 sets the stay of claims at no more than 90 days, extendable by 30 days at the debtor's request up to a maximum of 180 days, and explains when the stay ends.
1- دون إخلال بأحكام الفصل (الرابع عشر) من النظام، للمحكمة تعليق المطالبات لمدة لا تزيد على (تسعين) يوماً من تاريخ افتتاح الإجراء، ولها تمديد هذه المدة لـ (ثلاثي
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.