Article 44 of the Saudi Bankruptcy Law
المادة 44 من نظام الإفلاس · الفصل الرابع: إجراء إعادة التنظيم المالي: طلب افتتاح الإجراء
If someone other than the debtor submits a financial reorganization request, the court notifies the debtor within 5 days, and the debtor may object at the hearing in three cases.
Official text (Arabic)
This article has not been amended since the law was issued.
إذا تقدم غير المدين بطلب افتتاح إجراء إعادة التنظيم المالي، فعلى المحكمة تبليغ المدين به خلال مدة لا تزيد على (خمسة) أيام من تاريخ تقديمه، وللمدين الاعتراض على الطلب أمام المحكمة في الجلسة المحددة للنظر فيه، وذلك في أي من الحالات الآتية:
أ - إذا كانت شروط افتتاح الإجراء غير منطبقة.
ب - إذا كان الدين محل نزاع.
ج - إذا كان الدائن يسعى إلى إساءة استغلال الإجراء.
وللمحكمة أن تأمر المدين بتقديم المعلومات والوثائق التي تحددها اللائحة.
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 44 explained in plain English
This article protects the debtor when someone other than itself, such as a creditor or the competent authority, submits a request to open the financial reorganization procedure against it.
Notifying the debtor: The court must notify the debtor of the request within no more than 5 days of its submission.
Right to object: The debtor may object to the request before the court at the hearing set to consider it, in any of the following cases:
- If the conditions for opening the procedure do not apply.
- If the debt is in dispute.
- If the creditor seeks to abuse the procedure.
The court's authority: The court may order the debtor to provide the information and documents specified by the Implementing Regulations; the article does not specify them but refers to the Implementing Regulations.
This article is linked to Article 43, which provides for filing the request with the court accompanied by the relevant information and documents as the Implementing Regulations specify.
If a request of this kind is submitted against your business, it is advisable to act promptly and consult a lawyer specializing in bankruptcy and commercial cases before the hearing date.
Practical example
A supplier in Jeddah applied to open financial reorganization for an online store on the claim of a debt it says is due, while the store considers the debt disputed because of a disagreement about the quality of the goods. After the court notified the store of the request, it objected at the set hearing that the debt is in dispute.
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 44 of the Saudi Bankruptcy Law
Is the debtor notified if a creditor submits a financial reorganization request against it?
Yes. The court must notify it within no more than 5 days of the date the request is submitted.
When can the debtor object to a creditor's request?
If the conditions for opening the procedure do not apply, the debt is in dispute, or the creditor seeks to abuse the procedure; the objection is made at the hearing set to consider the request.
Can the court ask the debtor for documents?
Yes. The court may order the debtor to provide the information and documents specified by the Implementing Regulations.
More articles on Financial Reorganization
- Article 41
After a protective settlement ends, the court, on its own initiative or at an interested party's request, opens the appropriate bankruptcy procedure if three conditions are met together.
تقضي المحكمة -من تلقاء نفسها أو بناء على طلب ذي مصلحة- بافتتاح إجراء الإفلاس المناسب إذا تحققت الشروط الآتية: أ- أن يكون المدين متعثراً أو مفلساً. ب- استيفاء شر
- Article 42
The article states who may request the opening of financial reorganization and its three cases, and bars the request if the debtor underwent this procedure in the previous 12 months.
1- دون الإخلال بأحكام الأنظمة ذات العلاقة، للمدين أو الدائن أو الجهة المختصة التقدم إلى المحكمة بطلب افتتاح إجراء إعادة التنظيم المالي للمدين في أي من الحالات ا
- Article 43
A request to open the financial reorganization procedure is filed with the court after submission, accompanied by the relevant information and documents as the Implementing Regulations specify.
يقيد طلب افتتاح إجراء إعادة التنظيم المالي لدى المحكمة بعد تقديمه مرافقاً له المعلومات والوثائق ذات العلاقة، وفقاً لما تحدده اللائحة.
- Article 45
The debtor, owner, manager, officer, board member and auditor are exempted from the Companies Law provisions on a company's losses reaching a specified percentage, as the Implementing Regulations specify.
يعفى المدين أو المالك أو المدير أو المسؤول أو عضو مجلس الإدارة أو مراجع الحسابات من تطبيق أحكام نظام الشركات فيما يخص بلوغ خسائر الشركة نسبة محددة في ذلك النظام
- Article 46Amended by M/89
Filing a financial reorganization request or opening the procedure stays claims for 180 days, extendable by up to 180 days, with cases for an early end.
1- يترتب على قيد طلب افتتاح إجراء إعادة التنظيم المالي أو افتتاحه، تعليق المطالبات لمدة (مائة وثمانين) يوماً، وللمحكمة من تلقاء نفسها، أو بناءً على طلب الأمين أ
- Article 47
The article governs opening financial reorganization: a hearing within 40 days of filing, a ruling to open, reject or adjourn for up to 21 days, and notice to an absent debtor.
1- يفتتح إجراء إعادة التنظيم المالي بناء على حكم المحكمة بموجب المادة (الحادية والأربعين) من النظام، أو بموجب الفقرة (2) من هذه المادة. 2- تحدد المحكمة موعداً ل
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.