Article 98 of the Saudi Bankruptcy Law
المادة 98 من نظام الإفلاس · الفصل الخامس: إجراء التصفية: تعليق المطالبات
The article prevents anyone other than the court from taking any legal action, during the suspension of claims, against a party jointly liable with the debtor who gave personal or in rem security for its obligation.
Official text (Arabic)
This article has not been amended since the law was issued.
لا يجوز لغير المحكمة اتخاذ إجراء نظامي خلال مدة تعليق المطالبات ضد أي متضامن مع المدين قدم ضماناً شخصياً أو عينياً لضمان التزام المدين.
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 98 explained in plain English
This article extends the effect of the suspension of claims to persons other than the debtor itself, namely those jointly liable with it who gave security for its obligation.
Scope of protection:
- Who is protected: Anyone jointly liable with the debtor who gave personal security (such as a guarantee) or security in rem (such as a mortgage of one of its assets) to secure the debtor's obligation.
- Period: During the period of suspension of claims.
- What is prohibited: Taking legal action against them by anyone other than the court.
This means that during this period a creditor cannot itself, or through another body, take legal action against the guarantor, and that only the court may take the action. The article does not say that the security lapses or that the debt is extinguished, but limits the taking of action against the guarantor to the court throughout the suspension period.
This article is connected to Article 97, which provides that the suspension of claims begins with the registration of the request to open liquidation or the judgment opening it, and continues until the request is rejected or the procedure ends. To assess a particular situation, consult a lawyer specializing in bankruptcy and commercial cases.
Practical example
Khalid personally guaranteed his company's loan from a bank, and then a request to liquidate the company was registered and claims were suspended. During the suspension period the bank may not take legal action against Khalid as guarantor except through the court.
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 98 of the Saudi Bankruptcy Law
Can the guarantor be pursued while the debtor company is being liquidated?
During the suspension of claims, no one other than the court may take legal action against a party jointly liable with the debtor who gave security for its obligation.
Does the protection cover someone who mortgaged their own property to secure the debtor's debt?
Yes. It covers a party jointly liable who gave personal or in rem security to secure the debtor's obligation.
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.