Law & Regulation
Bankruptcy Law
The Bankruptcy Law establishes procedures for financially distressed debtors, including preventive settlement, financial restructuring, liquidation and procedures for smaller debtors and administrative liquidation. It balances rescue, creditor participation, asset preservation and orderly realization. Its Implementing Regulations are a separate Lean child. Security priority and enforcement interact with bankruptcy but remain governed by their respective instruments and the procedure’s effects.
Legal Significance
What This Instrument Does
The Law defines entry tests and applicants, opens supervised procedures, stays or controls claims, recognizes creditor classes and voting, enables restructuring proposals and asset transactions, regulates administrator/trustee functions and provides liquidation and avoidance mechanisms.
Why It Matters
Infrastructure projects can experience construction delay, revenue shortfall or sponsor distress. The Law determines whether enforcement may proceed, how financing and contracts are treated, whether the project company can restructure and how recoveries are distributed. These statutory effects can override contractual sequencing.
Key Provisions
- Available procedures
Provides rescue and liquidation pathways. Transaction relevance: strategy depends on debtor condition and desired outcome.
- Commencement and eligibility
Defines who may apply and opening standards. Transaction relevance: affects creditor leverage and timing.
- Moratorium/stay effects
Restricts individual action in relevant procedures. Transaction relevance: directly affects security enforcement and termination strategy.
- Office-holder powers and duties
Establishes trustee/administrator functions. Transaction relevance: changes control over assets, information and transactions.
- Claims filing and verification
Organizes creditor participation. Transaction relevance: lenders and contractors must preserve claims procedurally.
- Creditor classes, voting and proposals
Enables collective restructuring decisions. Transaction relevance: affects dissenting creditor rights and intercreditor strategy.
- Existing and new financing
Addresses financing within procedures subject to statutory controls. Transaction relevance: critical to preserving project operations.
- Executory contracts
Regulates treatment of ongoing contracts. Transaction relevance: material to project, EPC, O&M, supply and offtake continuity.
- Avoidance of transactions
Permits challenge to prejudicial pre-insolvency dealings. Transaction relevance: relevant to late security, affiliate payments and asset transfers.
- Priority and distributions
Governs payment order within the procedure. Transaction relevance: determines recovery analysis; contractual subordination must operate within law.
- Liquidation and asset sale
Provides orderly realization. Transaction relevance: affects asset-transfer, permit and continuity planning.
When You Would Use This
Assessing project-company or sponsor distress.
Planning enforcement during a statutory stay.
Filing and protecting lender, contractor or supplier claims.
Negotiating a restructuring proposal or rescue financing.
Reviewing ongoing project contracts in insolvency.
Analysing transaction avoidance and recovery priority.
InfraLex Relevance
The Law is the Insolvency Primary. Security and project-contract consequences are central editorial interfaces, not additional persisted topic roles or relationships.
Legal Framework Position
- Insolvency / BankruptcyPrimary / Framework Instrument
Instrument Overview
- Official Citation
- Royal Decree M/50, 28/5/1439H
- Instrument Type
- Law / Act
- Source Language
- Arabic
- Last Verified
- 6 September 2026