Article 95 of the Saudi Bankruptcy Law
المادة 95 من نظام الإفلاس · الفصل الخامس: إجراء التصفية: طلب افتتاح إجراء التصفية
The article governs notifying the debtor or the creditors of a liquidation request, the right to object, and the option to request an alternative procedure that preserves the debtor's business.
Official text (Arabic)
This article has not been amended since the law was issued.
1- إذا تقدم غير المدين بطلب افتتاح إجراء التصفية للمدين، فعلى المحكمة تبليغ المدين به خلال مدة لا تزيد على (خمسة) أيام من تاريخ قيد الطلب. وللمدين أن يعترض أمام المحكمة على الطلب، وله تقديم طلب افتتاح إجراء التسوية الوقائية أو إجراء إعادة التنظيم المالي إذا أثبت إمكانية استمرار نشاطه بما يحقق مصلحة لأغلبية الدائنين. وللمحكمة أن تأمر المدين بتقديم أي معلومة أو وثيقة تحددها.
2- يلتزم المدين إذا تقدم بطلب افتتاح الإجراء بتبليغ دائنيه بالطلب وفقاً لما تحدده اللائحة. وللدائن الاعتراض أمام المحكمة على طلب المدين، وله -استثناء من حكم المادة (السابعة والتسعين) من النظام- تقديم طلب افتتاح إجراء إعادة التنظيم المالي إذا أثبت إمكانية استمرار نشاط المدين بما يحقق مصلحة لأغلبية الدائنين.
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 95 explained in plain English
This article distinguishes between two cases depending on who filed the request to open the liquidation procedure:
First: where someone other than the debtor files the request (such as a creditor):
- The court must notify the debtor of the request within no more than 5 days of its registration.
- The debtor may object to the request before the court.
- The debtor may also file a request to open a protective settlement or financial restructuring if it proves that it can continue its business in a way that serves the interest of the majority of creditors.
- The court may order the debtor to submit any information or document it specifies.
Second: where the debtor files the request itself:
- The debtor must notify its creditors of the request as the Implementing Regulations specify.
- A creditor may object before the court to the debtor's request.
- A creditor may also, as an exception to Article 97, file a request to open a financial restructuring if it proves that the debtor's business can continue in a way that serves the interest of the majority of creditors.
The aim of these provisions is that an enterprise that can be rescued is not liquidated, so the door is opened to an alternative procedure once it is shown that continuing the business is more beneficial to the majority of creditors. Note that the option open to the debtor covers a protective settlement or financial restructuring, whereas the option open to a creditor is financial restructuring only.
This article follows Article 94 on the debtor's dispute of the debt, and precedes Article 96, which allows the court to take precautionary measures after the request is registered. To assess a particular situation, consult a lawyer specializing in bankruptcy and commercial cases.
Practical example
A bank in Riyadh filed a request to liquidate a distressed transport company. The court notified the company of the request within 5 days of its registration, and the company objected and filed a request to open a financial restructuring, attaching proof that it has existing contracts that enable it to continue its business in a way that serves the interest of the majority of creditors.
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 95 of the Saudi Bankruptcy Law
Within how many days is the debtor notified of a request to liquidate it?
The court notifies it within no more than 5 days of the registration of the request, if someone other than the debtor filed it.
Can the debtor turn a liquidation request into a protective settlement or restructuring?
It may file a request to open a protective settlement or financial restructuring if it proves that it can continue its business in a way that serves the interest of the majority of creditors.
Can a creditor object if the debtor asks to liquidate itself?
Yes. A creditor may object before the court, and may file a request to open a financial restructuring if it proves that the debtor's business can continue in a way that serves the interest of the majority of creditors.
Articles this article refers to
More articles on Liquidation of the Debtor's Assets
- Article 7
Article 7 bars the liquidation of any person under another law unless its assets cover all its debts and it is not defaulting, and makes management members jointly liable if this is violated.
1- مع مراعاة ما ورد في المادة (الرابعة) من النظام، لا يصفى أي شخص بموجب نظام آخر إلا إذا كانت أصوله تكفي لسداد جميع ديونه وكان غير متعثر. 2- إذا تم حل المدين وت
- Article 69
The debtor continues to manage its business during financial reorganization under the trustee's supervision, and at the trustee's request the court may remove its control in cases of negligence, mismanagement or criminal acts.
1- دون إخلال بصلاحيات ومهمات الأمين، يستمر المدين في إدارة أعماله ونشاطه خلال فترة إجراء إعادة التنظيم المالي تحت إشراف الأمين. 2- إذا ارتكب المدين أو أحد المسؤ
- Article 90
The court opens liquidation or administrative liquidation after financial restructuring ends if the debtor is distressed or bankrupt, the procedure's conditions are met, and the ending was for specified grounds.
تقضي المحكمة -من تلقاء نفسها أو بناء على طلب من ذي مصلحة- بافتتاح إجراء التصفية أو التصفية الإدارية إذا تحققت الشروط الآتية: أ - أن يكون المدين متعثراً أو مفلسا
- Article 92
The article allows the debtor, a creditor or the competent authority to ask the court to open the liquidation procedure if the debtor is distressed or bankrupt.
دون الإخلال بأحكام الأنظمة ذات العلاقة، للمدين أو الدائن أو الجهة المختصة التقدم إلى المحكمة بطلب افتتاح إجراء التصفية للمدين إذا كان المدين متعثراً أو مفلساً.
- Article 93
The article requires that a liquidation request be accompanied by the information and documents the Implementing Regulations specify to be registered, and sets special conditions where one or more creditors file it.
1- يشترط لقيد طلب افتتاح إجراء التصفية لدى المحكمة أن يقدم الطلب مرافقاً له المعلومات والوثائق ذات العلاقة، وفقاً لما تحدده اللائحة. 2- لا يقيد طلب دائن أو أكثر
- Article 94
A creditor's request to open liquidation is not registered if the debtor disputed the debt before the request, and filing it despite proof of the dispute is an abuse of the procedure.
لا يقيد طلب الدائن بافتتاح إجراء التصفية إذا كان المدين قد نازع الدائن في الدين قبل تقدم الدائن بالطلب. ويعد طلب الدائن افتتاح الإجراء مع وجود ما يثبت منازعة ال
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.