Insolvency and enforcement · Legal glossary
Protective settlementIn Arabic: التسوية الوقائية
Definition
A protective settlement is a Saudi bankruptcy procedure. It lets a debtor who is distressed, or likely to become distressed, reach a composition with creditors under the court’s supervision, while the debtor keeps running the business.
The term is Saudi in origin. The corresponding regimes in the other GCC states were not verified for this page.
How it varies across the GCC
The Saudi Bankruptcy Law lists it among its procedures in article 2, and article 13 sets out when an application to open the procedure may be made. It is not the settlement contract by which two parties end a dispute outside bankruptcy.
The rules that apply to a specific matter depend on the state, any free zone involved and the current text of the law, so check the official source before relying on them.
Sources
Official texts for the points on this page. General information, not legal advice. An article number is cited only where it was verified.
- Saudi Bankruptcy Law, art. 2, 13https://laws.boe.gov.sa/BoeLaws/Laws/LawDetails/68204119-84f1-4789-8fad-a9ec014c3788/1