Vol 22 (2025) - Issue 5

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A Review of the Saudi Bankruptcy Law: Its Origins, Utilisation and a Digest of the Provisions Relevant to Financial Restructuring

Synopsis
The Kingdom of Saudi Arabia enacted a new Bankrupt cy Law in September 2018. This was followed by regulations to implement the law. The form and substance of the law reflected the then trends in international legal reform towards preserving enterprise value, allowing for a second chance with effective restructuring procedures, allowing where appropriate the debtor to remain in possession and otherwise cram down of dissenting classes and other features of modern restructuring law.
Where liquidation is more appropriate the law ensures it is done efficiently. The first few years saw the law used to effect some large signature restructurings. Since then there has been greater use of the law for liquidations and the number of restructurings has materially abated. This is likely due to a range of factors, including prevailing economic conditions but also the culture of the judiciary. The procedures used to implement the law may go through further reform to address these issues.