SCA 1028/2019
This case involved a bankruptcy request and the start of proceedings for administrative liquidation.
Background
A contractor made a bankruptcy request to the court. He said that he was no longer able to pay his debts.
The creditors requested the court to dismiss the request made by the contractor. They said that the contractor had money when their debt was due.
Decision
Article 99 of Saudi Arabia Cabinet Decision No. 264/1439 stipulated that the court had the right to start the liquidation if the debtor was not able to be insolvent. The court said that if the debtor's assets were not sufficient to cover the liquidation process, the request for bankruptcy should be dismissed. The court said that the case documents revealed that the contractor's assets were not sufficient to cover the liquidation process.
The court dismissed the request made by the contractor. The court ruled that the proceedings for administrative liquidation should be started.
The court of appeal has upheld the ruling based on the same grounds.