Article 78 of the Saudi Bankruptcy Law
المادة 78 من نظام الإفلاس · الفصل الرابع: إجراء إعادة التنظيم المالي: حقوق التصويت
The article refers to the Implementing Regulations the quorum of the owners' meeting and the majority needed to accept the proposal where it affects their rights, as an exception to the relevant laws.
Official text (Arabic)
This article has not been amended since the law was issued.
استثناء من أحكام الأنظمة ذات العلاقة، تحدد اللائحة نصاب عقد اجتماع الملاك والأغلبية المطلوبة لقبول المقترح من الملاك، إذا تضمن المقترح ما يؤثر في حقوقهم، وذلك مع مراعاة حكم المادة (السابعة والسبعين) من النظام.
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 78 explained in plain English
When the financial restructuring proposal includes anything affecting the owners' rights, it must be determined how the owners meet and how they decide to accept the proposal. This article deals with that as follows:
- Referral to the Implementing Regulations: The Implementing Regulations specify the quorum for holding the owners' meeting and the majority required for them to accept the proposal.
- Exception to other laws: The article provides that this provision is an exception to the provisions of the relevant laws, so the reference for the quorum and majority here is the Implementing Regulations.
- Scope: This applies only where the proposal includes anything affecting the owners' rights.
- Subject to Article 77: This is subject to Article 77, which requires the debtor, after the trustee's approval, to notify the affected owners of the voting date at least 21 days before it.
The article itself gives no percentages or numbers for the quorum or the majority, so anyone who wants to know them should consult the Implementing Regulations of the Bankruptcy Law.
This provision is connected to Article 79, which governs the creditors' vote on the proposal and the acceptance percentages for each class, since creditors and owners each have their own voting rules. To assess the effect of the proposal on a partner's or shareholder's stake, you can consult a lawyer specializing in commercial and company matters.
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 78 of the Saudi Bankruptcy Law
What quorum is required for the owners' meeting to vote on the proposal?
The article does not specify it. It refers the matter to the Implementing Regulations, as an exception to the provisions of the relevant laws.
When does the proposal need the owners' acceptance?
The article deals with the case where the proposal includes anything affecting the owners' rights, subject to notifying them of the voting date under Article 77.
Articles this article refers to
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.