Skip to content
Qanoon
Sign in

Article 70 of the Saudi Bankruptcy Law

المادة 70 من نظام الإفلاس · الفصل الرابع: إجراء إعادة التنظيم المالي: حماية النشاط

The article lists the acts for which the debtor needs the trustee's written approval from the opening of financial reorganization until the proposal is approved.

Official text (Arabic)

This article has not been amended since the law was issued.

1- دون الإخلال بالأنظمة ذات العلاقة، يجب على المدين الحصول على موافقة مكتوبة من الأمين - خلال المدة من افتتاح إجراء إعادة التنظيم المالي إلى التصديق على المقترح- عند القيام بأي من الأعمال الآتية:

أ- إعداد المقترح وتنفيذ إجراءاته، بما في ذلك دعوة الدائنين للتصويت عليه.

ب- طلب الحصول على تمويل.

ج- سداد ديون حالّة أو لم تحل آجالها.

د- إبرام عقد تأمين جديد يرتب التزاماً مؤثراً عليه.

هـ- إخلاء أي من أصول التفليسة المؤجرة وإبرام أي عقد إيجار لازم لنشاطه أو نافع له.

و- إبرام أي اتفاق أو تسوية مع دائن أو أكثر.

ز- تقديم ضمان للغير أو تجديده.

ح- تغيير أي مقر أو مكتب مسجل له.

ط- التصويت على مقترح لمدين المدين في أي من إجراءات الإفلاس يترتب عليه التنازل عن حقوق المدين.

ي- إبرام عقد للحصول على خدمات استشارات قانونية أو محاسبية أو غيرها لمساعدته في إعادة التنظيم المالي لنشاطه.

ك- إقامة أي دعوى أو الترافع في أي دعوى مقامة أمام الجهات القضائية وشبه القضائية والتحكيم.

ل- تعيين وكيل للتصرف نيابة عنه، عدا ما يكون ضمن ممارسة المدين لنشاطه بالطريقة المعتادة.

م- تأسيس شركة تابعة أو شراء حصص أو أسهم في شركة أخرى.

ن- نقل ملكية كل أو بعض أعماله أو أصوله خارج نطاق مزاولة نشاطه المعتاد.

س- طلب إنهاء الإجراء بموجب الفقرة (أ) أو الفقرة (و) من المادة (السابعة والثمانين) من النظام.

ع- ما تنص عليه اللائحة.

2- لا يترتب على التزام المدين بحكم الفقرة (1) من هذه المادة الإعفاء من الالتزامات المنصوص عليها في النظام والأنظمة الأخرى ذات العلاقة.

3- يلتزم الأمين ببذل العناية الواجبة عند ممارسة صلاحياته ومهماته، ولا يعد مسؤولاً أمام الغير عن أي خسارة أو ضرر يترتب على موافقته على أي من أعمال المدين الواردة في الفقرة (1) 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 70 explained in plain English

Although the debtor continues to manage its business during financial reorganization, this article restricts its important transactions in the period from the opening of the procedure to the approval of the proposal, requiring it, without prejudice to the relevant laws, to obtain written approval from the trustee when doing any of the following:

  • Preparing the proposal and carrying out its procedures, including inviting creditors to vote on it.
  • Applying for financing, or paying debts that are due or not yet due.
  • Entering into a new insurance contract that creates an obligation affecting it.
  • Vacating any of the leased estate assets, and entering into any lease necessary or useful for its business.
  • Entering into an agreement or settlement with one or more creditors, or providing or renewing a guarantee for others.
  • Changing any registered office or office of its own.
  • Voting on a proposal of the debtor's own debtor in any of the bankruptcy procedures if it results in waiving the debtor's rights.
  • Contracting for legal, accounting or other consulting services to assist in the reorganization.
  • Filing any lawsuit or pleading in it before judicial and quasi-judicial bodies and arbitration.
  • Appointing an agent to act on its behalf, except what is within carrying on its business in the usual manner.
  • Establishing a subsidiary or buying shares or stock in another company.
  • Transferring ownership of all or some of its business or assets outside its usual course of business.
  • Requesting termination of the procedure under paragraph (a) or (f) of Article 87, and what the Implementing Regulations provide.

This obligation does not relieve the debtor of the obligations provided for in the Bankruptcy Law and the other relevant laws. The trustee must exercise due diligence, and is not liable to third parties for any loss or damage resulting from its approval of these acts.

Article 71 sets out what the court may rule if the debtor disposes of estate assets outside its usual business in breach of paragraph (1/n). To verify whether a particular transaction needs approval, you can consult a lawyer specializing in bankruptcy and commercial cases.

Practical example

A retail company in Riyadh is in the financial reorganization stage and its proposal has not yet been approved. It wanted to pay a key supplier's debt and set up a subsidiary for e-commerce. Before each of these transactions it must obtain written approval from the trustee.

Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.

How we write and review content

A question about Article 70 of Bankruptcy Law?

Describe what happened and specialist lawyers answer. You can write in English.

  • Completely free
  • Lawyers from the directory answer
  • Your name stays hidden
Ask a lawyer for free

Commercial & Corporate Law lawyers: ask a specialist about your case

Describe your situation briefly and we'll suggest a lawyer who specialises in this law

Commercial & Corporate Law lawyers

Lawyers who handle this kind of case

See all lawyers

Frequently asked questions about Article 70 of the Saudi Bankruptcy Law

Does the debtor need the trustee's approval to pay its debts during financial reorganization?

Yes. Paying debts that are due or not yet due needs written approval from the trustee in the period from the opening of the procedure to the approval of the proposal.

Can the company file a lawsuit while in financial reorganization?

Filing any lawsuit or pleading in it before judicial and quasi-judicial bodies and arbitration requires written approval from the trustee during that period.

Is the trustee liable if it approves an act that harms third parties?

The trustee must exercise due diligence and is not liable to third parties for any loss or damage resulting from its approval of these acts.

Articles this article refers to

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.