Article 54 of the Saudi Water Law
المادة 54 من نظام المياه · الفصل الحادي عشر: البنى الأساسية للمياه وكشف التسربات
If a licensee cannot carry out its activity and wishes to liquidate, or liquidation proceedings are opened under the Bankruptcy Law, it must coordinate with the Authority to transfer its assets at a fair value to the Ministry or another licensee.
Official text (Arabic)
This article has not been amended since the law was issued.
إذا تعذّر على المرخَّص له بنشاط تقديم الخدمة القيام بنشاطه المرخَّص له به لأي سبب، ورغب في تصفية نشاطه؛ أو أفتتح له أي من إجراءات التصفية وفقًا لنظام الإفلاس، فيجب عليه التنسيق مع الهيئة؛ لنقل ملكية الأصول -بقيمة عادلة تعتمدها الهيئة- إلى الوزارة، أو إلى مرخَّص له آخر يتم اختياره وفقًا لما تحدده لوائح الهيئة.
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 54 explained in plain English
This article deals with what happens to the assets of a licensee of a service-provision activity when its activity ends in liquidation, so that assets needed for the service are not lost.
When does it apply? In one of two cases:
- If the licensee is unable to carry out its licensed activity for any reason and wishes to liquidate its activity; the first case combines inability with the wish to liquidate.
- Or if any of the liquidation procedures has been opened against it under the Bankruptcy Law.
What is the obligation? The licensee must coordinate with the Authority to transfer ownership of the assets, subject to two conditions:
- The transfer must be at a fair value approved by the Authority; the article does not specify how this value is calculated.
- The assets must go to the Ministry, or to another licensee selected as specified by the Authority's regulations.
The article is linked to Article 50, which requires the Authority, in coordination with the Ministry, to make the necessary arrangements to ensure service continues if the licensee is unable to carry out its activity for any reason. It is also consistent with Article 48, which prevents disposal of licensed assets without the Authority's written permission.
The article refers to the Bankruptcy Law without setting out its provisions, so the details of liquidation procedures are to be found in that law. Given how these matters overlap, the licensee or its creditors would do well to consult a lawyer specializing in water law, commercial matters and companies.
Practical example
A company licensed for wastewater treatment in Qassim fails to perform its activity, and its owners decide to liquidate it. Under this article it must coordinate with the Authority to transfer ownership of the plant's assets at a fair value approved by the Authority, either to the Ministry or to another licensee selected in accordance with the Authority's regulations.
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 54 of the Saudi Water Law
What happens to a water company's assets when it goes bankrupt?
If any liquidation procedure is opened against it under the Bankruptcy Law, it must coordinate with the Authority to transfer ownership of the assets at a fair value approved by the Authority to the Ministry or to another licensee.
Who determines the value of the licensee's assets when they are transferred?
Article 54 provides that the transfer is at a fair value approved by the Authority.
To whom are the assets transferred?
To the Ministry, or to another licensee selected as specified by the Authority's regulations.
More articles on Water Service Licenses and Infrastructure
- Article 17
The article bars the relevant bodies from issuing licenses or approvals for any facility that may obstruct the use of surface water except with the Ministry's prior approval.
على الجهات المعنية عدم إصدار رخص أو موافقات على إقامة أيّ منشأة قد تعوق استخدام المياه السطحية إلا بموافقة مسبقة من الوزارة.
- Article 47
The article makes issuing, renewing and amending licenses, exemptions and permits for service provision activities the Authority's responsibility, and bans carrying out any of these activities without a license except those exempted by the Authority's regulations.
1- تتولى الهيئة إصدار الرخص، والإعفاءات، والتصاريح اللازمة لمزاولة أي نشاط من أنشطة تقديم الخدمة، أو الإعداد لمزاولته، وتجديدها، وتعديلها. 2- فيما عدا الأنشطة ا
- Article 48
The article prohibits a licensee for a service provision activity from assigning its license or disposing of the licensed assets in any way before obtaining the Authority's written permission, without affecting the performance of the activity.
لا يجوز للمرخَّص له بنشاط تقديم الخدمة -قبل الحصول على إذن مكتوب من الهيئة- التنازل عن رخصته، أو التصرف في الأصول المرخَّص لها، سواءً بالنقل، أو البيع، أو الرهن
- Article 49
Article 49 requires a service-activity licensee to get the Authority's approval before merging with others or acquiring most of their shares or assets, and to notify the Authority of any preliminary agreement.
يجب على المرخَّص له بنشاط تقديم الخدمة الحصول على موافقة الهيئة قبل الاندماج مع أشخاص آخرين، أو امتلاك معظم حصصهم، أو موجوداتهم، ويجب عليه إشعار الهيئة بأي اتفا
- Article 50
Article 50 requires the Authority, in coordination with the Ministry, to make the necessary arrangements to ensure service continues if a service-activity licensee is unable to carry out its activity for any reason.
إذا تعذر على المرخَّص له بنشاط تقديم الخدمة القيام بنشاطه المرخَّص له به لأي سبب، فعلى الهيئة -وبالتنسيق مع الوزارة- اتخاذ الترتيبات اللازمة؛ لضمان استمرار تقدي
- Article 51
Article 51 gives the Authority's inspectors the right to enter sites and facilities licensed by the Authority to check compliance with the Law, and allows the Authority to coordinate with the competent bodies if they are prevented or obstructed.
1- لمفتشي الهيئة الحق في دخول المواقع والمنشآت المرخَّص لها من قبل الهيئة؛ للتأكد من مدى الالتزام بتطبيق أحكام النظام. 2- في حال منع أو إعاقة مفتشي الهيئة عن تأ
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.