April 27, 2017

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
ban thereon.

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.

For more information on this topic, you can contact Dr. Eman Riad, or Heba Elkady.

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