The amicable settlement procedure stipulated in Article One of the Law shall be carried out by committees formed by a decision of the Minister of Commerce and Industry. Each committee consists of three members and one alternate member, with one of them serving as the chairperson. The chairperson must have knowledge of the relevant Sharia provisions and legal procedures. The committee's headquarters shall be at the Chamber of Commerce and Industry, and the committee shall have a secretary chosen by its chairperson to handle its administrative tasks. The fees for the committee shall be borne by the merchant and shall not exceed 4% of the total outstanding debts.

• The Merchant (whether an individual or a company) submits a written claim for amicable settlement to the committee formed at the Chamber of Commerce and Industry where its main office is located, specifying the following:

  • A - Its financial situation based on the approved budgets for the two years preceding the submission of the settlement claim, clarifying the reasons for the disruption of that situation, and the proposed method for settling its debts.

  • B - The value of the debts owed by it, the names of its creditors, and their places of residence.

  • C - The value of the debts owed to it by others and the procedures taken to claim them.

  • D - The guarantees it provides to demonstrate the seriousness of its request and the repayment of its debts.

  • E - The lawsuits, claims, and enforcement procedures taken against it and what has been done regarding them. The Merchant is also obligated to provide all supporting documents for the mentioned data within two weeks from the date of submitting the claim, and before the date of the first hearing, whichever is earlier.

• The procedures for amicable settlement shall be as follows:

  • A - The Chairman of the Committee shall set a date for its meeting within two weeks from the date of submitting the claim, and the date for appearing before the Committee shall be no later than fifteen days from the date of submitting the claim. The Committee shall meet at the chamber's headquarters, and if necessary, the Chairman may hold the Committee meeting at another location he designates. 

  • B - The Secretary of the Committee shall notify the merchant requesting the settlement and his creditors of the date set by the Committee to consider the claim.

  • C - The Committee may invite the merchant to a special meeting to discuss his request, and it may also require him to submit any documents it deems necessary to verify the seriousness of the claim.

  • D - The Committee may visit the merchant's assets and the guarantees he provides, and it may delegate one of its members to conduct this in the presence of the merchant requesting the settlement and guide him.

  • E - The amicable settlement may include restructuring the merchant's debts or installment payments, postponing their due dates, or waiving part of them, or taking actions agreed upon by the parties regarding the management of the merchant's business or supervising it, or a combination of these matters or others.

  • F - What the parties agree upon regarding the amicable settlement, and the method followed in this regard, shall be documented in a settlement document signed by the Chairman of the Committee and its members, the merchant requesting the settlement, and his creditors. This document shall be binding on the signing parties and the remaining creditors if the majority of creditors participate in its procedures and agree to it, provided that this majority holds two-thirds of the undisputed debts, and each party shall receive a copy of it.

  • G - The Committee shall complete its work within a period not exceeding (120) days from the date of submitting the claim.

  • H - In the event that the parties do not agree on the amicable settlement, this shall be documented in the Committee's minutes, along with the reasons for the disagreement among them, and the statements of each party in detail, and the minutes shall be signed by the Chairman of the Committee, its members, and the present parties.

  • I - The Chairman of the Committee shall refer the subject papers to the Ministry of Commerce and Industry within a week from the date of the Committee's conclusion of its work, to present them to the Minister of Commerce and Industry, who may return the papers to the Committee to take any actions he deems necessary to complete the settlement between the parties, within three weeks from the date they are referred to the Ministry.

  • J - The merchant shall remain in charge of managing his assets throughout the period of amicable settlement procedures; however, the Committee - at the request of one of the creditors - may invite the merchant to discuss certain actions taken by him, and it may request him to refrain from any action that harms his creditors. If he insists or continues to carry out this action, the Committee may issue a decision to close the amicable settlement procedures.

  • K - The amicable settlement applies to the creditors who participated in its procedures and agreed to it, and it also applies to creditors if the majority of creditors participated in its procedures and agreed to it, provided that this majority holds two-thirds of the undisputed debts.

  • L - The Committee shall request the suspension of enforcement procedures taken against the merchant until the amicable settlement procedures are completed.

• The following conditions are required for a merchant seeking a friendly settlement or a protective settlement from bankruptcy, whether an individual or a company:

  • A - That their practice of trade has not been less than three years.

  • B - That they are actively engaged in trade at the time of requesting the protective settlement from bankruptcy.

  • C - That they possess credibility, integrity, and bona fide intentions, and are committed to commercial regulations and commercial customs. Bad faith is considered to be not maintaining commercial books, issuing checks without sufficient funds, concealing any of their debts, failing to register in the commercial register, or engaging in fraud and deceit in their transactions.

  • D - That the reason for the disruption of their trade is not due to negligence and bad faith.

The settlement request stipulated in Article Two of the Law shall be submitted to the President of the Board of Grievances to refer it to the competent department.

• The merchant applying for the settlement (whether an individual or a company) must attach to his application as stipulated in Article Two of the Law, in addition to the documents mentioned in the referred text, the following documents:

  • A - Documents of the debts owed to him by others, the actions taken regarding the claims, and the supporting documents for that.

  • B - The merchant's balance sheet (whether an individual or a company) for the two years preceding the submission of the settlement application.

  • C - A statement of lawsuits and claims and enforcement actions taken against the merchant, and what has been done regarding them.

  • D - A certificate of registration in the Commercial Register.

  • E - Copies of the company’s founding contracts or its basic regulations certified by the competent authority, and documents proving the status of the applicant for the settlement on behalf of the company.

  • F - A detailed statement of the merchant's expenses and transactions regarding his assets during the two years preceding the submission of the settlement application.

  • G - His commercial books or what replaces them.

  • H - A tangible or personal guarantee for the settlement proposals accepted by the creditors agreeing to the settlement.

  • I - A commitment to provide the amount estimated by the department to cover the expenses of the settlement procedures, including the fees of the supervisor and the expert that the department may appoint.

  • J - That the documents attached to the settlement application are certified by a licensed accounting office.

The competent circuit considers the settlement request, and if it determines that the request meets the data stipulated in Article Two of the Law and Article Seven of this Regulation, it issues a decision to initiate the settlement procedures and requests the applicant to provide what was pledged in accordance with paragraph (a) of Article Seven of this Regulation. In the event that the amount estimated by the circuit is insufficient, it requests additional amounts. If the applicant refuses or delays in providing what was requested, the circuit has the right to cancel the settlement procedures. The circuit, in its decision, appoints one of its members to supervise the settlement procedures, along with one or more supervisors to carry out the procedures.

The Judge supervising the settlement procedures shall set a date for a meeting with the Merchant and his creditors within thirty days from the date of the decision to open the settlement. The parties shall be notified of this date in accordance with the rules and procedures in force before the Board of Grievances, and the notification shall include the terms of the settlement proposed by the Merchant.

The competent chamber considers the settlement request in sessions attended by the concerned parties, the supervisor, and anyone the chamber and the judge overseeing the settlement procedures deem necessary to attend.