Article 50 of the Saudi Bankruptcy Law
المادة 50 من نظام الإفلاس · الفصل الرابع: إجراء إعادة التنظيم المالي: الأثر المترتب على افتتاح الإجراء: (تعيين الأمين والخبير وقاضي الإشراف وصلاحياتهم
The court appoints a trustee from the register of bankruptcy trustees in the opening ruling for financial reorganization; the article governs selection criteria, duty, delegation, multiple trustees and filing the ruling.
Official text (Arabic)
This article has not been amended since the law was issued.
1- تعين المحكمة في حكمها بافتتاح إجراء إعادة التنظيم المالي أميناً من المدرجين بقائمة أمناء الإفلاس. ولمقدم طلب افتتاح الإجراء أن يقترح على المحكمة اسم الأمين الذي يرغب في تعيينه من بين المدرجين في القائمة.
2- يراعى عند تعيين الأمين قدراته المالية ومؤهلاته العلمية ومؤهلات فريق العمل معه.
3- على الأمين بذل العناية الواجبة تجاه مصالح الدائنين.
4- دون إخلال بالفقرة (2) من هذه المادة، للأمين بعد موافقة المحكمة تفويض بعض مهماته إلى أحد المدرجين بقائمة الأمناء أو الخبراء للقيام بالمهمة المفوض بها إذا استدعى الأمر ذلك، على أن تكون المهمات الموكل بها المفوض موصوفة بدقة وعناية في قرار المحكمة.
5- للمحكمة -عند الحاجة- تعيين أكثر من أمين يعملون مجتمعين وفقاً للنظام ولتعليماتها على أن تختار من بينهم رئيساً، ويكون الأمناء مسؤولين بالتضامن عن أعمالهم، وتبين اللائحة طريقة عملهم.
6- يودع الأمين نسخة من حكم المحكمة بافتتاح الإجراء وبتعيينه في سجل الإفلاس.
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 50 explained in plain English
This article governs the appointment of the trustee in the financial reorganization procedure, the person who carries out specific tasks in the procedure for the benefit of the creditors.
- Appointment: The court appoints the trustee in its ruling opening the procedure, from those listed in the register of bankruptcy trustees. The applicant for opening may propose the name of the trustee it wishes from among those listed in the register, and the decision is the court's.
- Selection criteria: The trustee's financial capacity, academic qualifications, and the qualifications of the team working with them are taken into account.
- Basic duty: Exercising due diligence toward the creditors' interests.
- Delegation: With the court's approval, the trustee may delegate some of its tasks to someone listed in the register of trustees or experts if necessary, provided the delegated tasks are described precisely and carefully in the court's decision, and without prejudice to the criteria of paragraph 2.
- Multiple trustees: Where needed, the court may appoint more than one trustee to work jointly in accordance with the law and its instructions, and it chooses a chair from among them. They are jointly and severally liable for their actions, and the Implementing Regulations set out how they work.
- Filing: The trustee files a copy of the ruling opening the procedure and its appointment in the bankruptcy register.
Article 51 complements this provision by allowing an expert to be appointed to assist the trustee at its request, from the register of experts or otherwise. The article also comes within the court's powers in this procedure, including subjecting a jointly owned asset or another person to the procedure under Article 49.
To learn how to propose a trustee or deal with one, it is advisable to consult a lawyer specializing in bankruptcy and commercial cases.
Practical example
A bank applied to open financial reorganization for a real estate company in Jeddah and proposed to the court the name of a trustee from the register of bankruptcy trustees because of its experience in the sector. In the opening ruling, the court appointed the trustee after taking into account its financial capacity, qualifications and the qualifications of its team, and the trustee then filed a copy of the ruling and its appointment in the bankruptcy register.
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 50 of the Saudi Bankruptcy Law
Who appoints the financial reorganization trustee?
The court appoints it in its ruling opening the procedure, from those listed in the register of bankruptcy trustees.
Can the trustee's name be proposed?
Yes. The applicant for opening the procedure may propose to the court the name of a trustee from among those listed in the register.
May the trustee delegate its tasks?
With the court's approval, it may delegate some of its tasks to someone listed in the register of trustees or experts if necessary, with the tasks described precisely in the court's decision.
Who is liable if there are several trustees?
The trustees are jointly and severally liable for their actions.
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 44
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.
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
- 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
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.