Article 60 of the Saudi Bankruptcy Law
المادة 60 من نظام الإفلاس · الفصل الرابع: إجراء إعادة التنظيم المالي: العقود
As soon as the trustee is appointed, the debtor must give it a detailed list of its contracts in force, copies and a report on what it wants to continue or end; the trustee may request more information and must examine everything carefully.
Official text (Arabic)
This article has not been amended since the law was issued.
1- على المدين أن يقدم إلى الأمين -فور تعيينه- قائمة تفصيلية بعقوده السارية وبياناتها مرافقاً لها نسخ من تلك العقود وتقرير يتضمن ما يرغب في استمراره منها أو إنهائه ومسوغات ذلك.
2- للأمين أن يطلب من المدين أي معلومات أو وثائق ذات صلة بالعقود الواردة في الفقرة (1) من هذه المادة، ويلتزم المدين بتزويد الأمين بهذه المعلومات والوثائق خلال مدة معقولة يحددها الأمين.
3- على الأمين أن يفحص بعناية قائمة العقود والمعلومات والوثائق المقدمة إليه بموجب الفقرتين (1) و(2) من هذه المادة.
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 60 explained in plain English
This article governs the first step in dealing with the debtor's contracts during the financial reorganization procedure.
First: what the debtor provides
The debtor must provide the trustee, as soon as it is appointed, with:
- A detailed list of its contracts in force and their particulars.
- Copies of those contracts.
- A report stating which of them it wishes to continue or end, with the reasons.
Second: requesting additional information
The trustee may ask the debtor for any information or documents relating to these contracts, and the debtor must provide them within a reasonable period the trustee sets.
Third: the trustee's duty
The trustee must examine carefully the list of contracts and the information and documents provided to it.
This examination has a direct effect, as Article 61 allows the trustee, after examining the list, to issue within a maximum of 60 days of the opening of the procedure a decision terminating a contract of the debtor on specified conditions, including that the termination is necessary to carry out the proposal after approval and to protect the interests of a majority of creditors, and that it does not cause serious harm to the contracting party. Paragraph 7 of Article 61 also excludes government tender and procurement contracts that government entities conclude with the debtor from the provisions of Article 60, and paragraph 8 excludes financing contracts concluded by banking companies or finance companies with the debtor.
The article is also linked to Article 59, which requires the debtor to provide the trustee with any contracts to which it is a party. To know the fate of a particular contract, it is advisable to consult a lawyer specializing in bankruptcy and commercial cases.
Practical example
A retail company in Riyadh has supply contracts and maintenance contracts in force. After the trustee was appointed in the financial reorganization procedure, it gave it a list of the contracts and copies of them, with a report recommending ending a costly maintenance contract and explaining the reason. The trustee requested the contract's invoices within 10 days and examined the list and documents carefully.
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 60 of the Saudi Bankruptcy Law
What does the debtor provide to the trustee about its contracts?
A detailed list of its contracts in force and their particulars, copies of them, and a report on what it wishes to continue or end with the reasons, as soon as the trustee is appointed.
Can the trustee request additional information about the contracts?
Yes, and the debtor must provide it within a reasonable period the trustee sets.
Do these provisions cover government procurement contracts?
Paragraph 7 of Article 61 excludes government tender and procurement contracts that government entities conclude with the debtor from the provisions of Article 60.
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.