PROTECTING THE DEBTOR FROM CREDITORS’ LESION (GHABN) UNDER THE SAUDI BANKRUPTCY LAW (AN ANALYTICAL STUDY)

Abstract

There is no doubt that protecting the insolvent debtor is of great importance in economic life, as it helps prevent commercial enterprises from collapsing. To that end, legislation has been enacted that allows the preparation of rescue plans as soon as early signs of economic difficulty appear. The Saudi Bankruptcy Law sets out the procedures to be followed for both creditor and debtor, and it lays down practical mechanisms that clearly safeguard the debtor’s rights, attaching multiple legal effects that attest to the seriousness of this protection. Among these mechanisms is closing off avenues by which creditors might employ lesion (Ghabn) against the debtor in any of the bankruptcy procedures. This paper seeks to shed light on that mechanism.