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Article 46 of the Saudi Bankruptcy Law

المادة 46 من نظام الإفلاس · الفصل الرابع: إجراء إعادة التنظيم المالي: تعليق المطالبات

Amended 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.

Official text after amendments (Arabic)

Compiled from the original text and every officially published amendment; the amendments are shown in full below for comparison.

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 أو المدين تمديد هذه المدة بما لا يزيد على (مائة وثمانين) يوماً.

2- تنتهي مدة تعليق المطالبات بانقضاء المدة المحددة في الفقرة (1) من هذه المادة، أو قبل ذلك في حالة رفض طلب افتتاح الإجراء، أو تصديق المحكمة على المقترح، أو إنهاء الإجراء قبل التصديق 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 46 explained in plain English

This article provides a basic protection for the debtor in the financial reorganization procedure, which is the stay of claims, that is, suspending them temporarily.

When does the stay begin? It results from either of two things: filing a request to open financial reorganization, or opening the procedure. There is no need to wait for the opening ruling, as filing the request is enough.

Period: 180 days. The court, on its own initiative or at the request of the trustee or the debtor, may extend it by no more than 180 days.

When does the stay end?

  • When the period set in paragraph 1 expires.
  • Or earlier in one of the following cases: the request to open the procedure is rejected, the court approves the proposal, or the procedure is terminated before it is approved.

This article does not state which types of claims are covered by the stay or its exceptions, so this cannot be inferred from it alone.

The article was amended by Royal Decree No. (M/89) dated 9/7/1441 AH, and the explanation here is of the text in force after the amendment.

The article is linked to Article 47, which requires the court to set a date to consider the opening request within 40 days of filing; if the request is rejected, the stay ends under this article.

If you are a creditor and want to know the effect of the stay on your claim, consult a lawyer specializing in bankruptcy and commercial cases.

Practical example

A local bank claims overdue installments from a distribution company in Dammam. The company filed a request to open financial reorganization with the court, and the filing resulted in a stay of claims for 180 days. After two months the court approved the proposal, so the stay ended before the 180 days expired.

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 46 of the Saudi Bankruptcy Law

How long is the stay of claims in financial reorganization?

180 days, and the court may extend it by no more than 180 days on its own initiative or at the request of the trustee or the debtor.

When does the stay of claims begin?

As soon as a request to open financial reorganization is filed or the procedure is opened.

Can the stay end before 180 days?

Yes, if the opening request is rejected, the court approves the proposal, or the procedure is terminated before approval.

Can a creditor ask to extend the stay?

The text gives extension to the court on its own initiative or at the request of the trustee or the debtor, and does not mention the creditor.

Amendment history

  1. Royal Decree No. M/89 — 9/7/1441 AH

    Official amendment text (Arabic)

    عُدلت هذه المادة بموجب المرسوم الملكي رقم (م/89) وتاريخ 9 / 7 / 1441هـ، لتكون على النحو الآتي:

    "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 أو المدين تمديد هذه المدة بما لا يزيد على (مائة وثمانين) يوماً.

    2- تنتهي مدة تعليق المطالبات بانقضاء المدة المحددة في الفقرة (1) من هذه المادة، أو قبل ذلك في حالة رفض طلب افتتاح الإجراء، أو تصديق المحكمة على المقترح، أو إنهاء الإجراء قبل التصديق عليه".

Original text before the amendments (Arabic)

يترتب على قيد طلب افتتاح إجراء إعادة التنظيم المالي أو افتتاحه تعليق المطالبات حتى تاريخ رفض طلب افتتاح الإجراء أو تصديق المحكمة على المقترح أو إنهاء الإجراء قبل ذلك.

All amendments to this law (Arabic) →

More articles on Financial Reorganization

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.