No more Detention for Bankrupt Persons
The Supreme Constitutional Court ruled for the unconstitutionality of part of Article
561/2 of the Egyptian Commercial Code as well as part of Article 586/1 in what they
provide for the power of the court to detain the bankrupt person or impose a travel
The Supreme Constitutional Court said that these provisions violate the bankrupt’s
right of personal freedom, which is a right strictly protected under Articles 54 and 92
of the Egyptian Constitution. The bankrupt person, as long as it does not commit a
fraud or a willful misconduct, is only a person who faced financial difficulties
preventing it from meeting its financial obligations, which is not a crime in itself to
justify the ‘harsh’ criminal penalty of detention.
This ruling comes in line with the draft Bankruptcy Law expected to be issued soon.