Saudi Minister of Commerce Majid bin Abdullah Al-Kasabi has issued rules governing cross-border bankruptcy procedures, which will come into effect from the date of their publication in the Official Gazette.

The rules provide that a foreign bankruptcy proceeding is a collective judicial or administrative proceeding in a foreign country, even if it is temporary, under the provisions of the bankruptcy regime, under which the debtor’s assets and funds are subject to the control or supervision of a foreign court for the purpose of its financial reorganization or liquidation, according to what was published by the newspaper Umm Al Qura, yesterday Friday.

The general principles of cross-border bankruptcy proceedings under Article 3 of the rules were that they do not violate international agreements to which the Kingdom is a party.

The rules provided that the court had the right to refuse to take any action if it violated public order in the Kingdom.

The Rules also do not limit the power of a court or trustee to provide other assistance to a foreign trustee in accordance with the relevant laws of the Kingdom, while taking into account, in applying the provisions contained in the rules, their international character, in order to enhance the application of its provisions in a uniform manner and taking into account good faith.

The Rules provide that they apply in cases such as if a foreign court or foreign manager requests legal assistance from a court in respect of a foreign bankruptcy proceeding, or if a court, bankruptcy committee or foreign receiver requests legal assistance from a foreign court or foreign receiver in respect of a bankruptcy proceeding bankruptcy in accordance with the provisions of the system.

It also applies if the debtor is simultaneously in bankruptcy proceedings under the provisions of the Law and bankruptcy proceedings in a foreign country, or when an application related to or interference with bankruptcy proceedings is filed by any creditor or interested person in a foreign state in accordance with the provisions of the Law.

The Rules also provide that no bankruptcy proceeding may be commenced under the system after the recognition of the underlying foreign bankruptcy proceeding if the debtor has no assets in the Kingdom, in which case the proceeding and its effects are limited to those assets and any other assets. he has what must be managed in a procedure opened within those procedures in accordance with the provisions of the system.

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