Safeguard Procedure in Morocco (Law 73-17) in 2026: Conditions, Workflow and Plan

By Laurent Cazals — Partner, Restructuring & Insolvency, Paris Bar. Updated: 2026.

The safeguard procedure introduced by Law No. 73-17 reforming Book V of the Moroccan Commercial Code (Official Gazette No. 6667 of 23 April 2018) is the cornerstone of judicial prevention of business difficulties in Morocco. It is inspired by the French sauvegarde enacted by the law of 26 July 2005, while integrating Moroccan legal specificities and the local institutional ecosystem (Commercial Courts of Casablanca and Rabat, Bank Al-Maghrib, AMMC). In 2024, against a backdrop of persistently rising Moroccan corporate defaults, safeguard remains significantly under-used relative to its potential. This guide sets out the opening conditions, the procedural workflow and the strategic levers required to deliver an effective safeguard plan.

1. Economic context: why Moroccan safeguard remains under-used

According to Inforisk (a subsidiary of Finaccess Capital), 14,245 corporate defaults were recorded in Morocco in 2023, up +18% year-on-year. SMEs account for nearly 99% of those defaults, primarily in construction, wholesale trade and hospitality. Yet the overwhelming majority of files opened before Moroccan commercial courts still fall under judicial liquidation or recovery (redressement) rather than safeguard — even though safeguard is designed to be triggered before suspension of payments.

Sources: Inforisk, Corporate Defaults Barometer 2023; High Commission for Planning (HCP), Economic Outlook 2024; Bank Al-Maghrib, 2023 Annual Report.

1.1 Structural causes of under-use

• Culture of confidentiality: Moroccan directors prefer bilateral renegotiation with banks, without involving the court.
• Fear of reputational impact: despite the non-public nature of certain opening steps, social perception still equates safeguard with disguised bankruptcy.
• Limited advisor expertise on the preventive procedures introduced by Law 73-17 (conciliation, safeguard).
• Bench appropriation lag in commercial courts outside Casablanca and Rabat.

2. Legal framework: Law 73-17 and Book V of the Commercial Code

Law No. 73-17, enacted by Dahir No. 1-18-26 of 19 April 2018, repealed the former Book V (Law No. 15-95) and replaced it with a four-tier framework:

1. Internal prevention (Articles 545–547) — alert by the statutory auditor and shareholders.
2. External prevention / Conciliation (Articles 549–559) — confidential amicable agreement under the auspices of the President of the Court.
3. Safeguard (Articles 560–574) — collective judicial procedure available to any business facing difficulties it cannot overcome on its own and which are likely to lead to suspension of payments.
4. Treatment of difficulties: recovery (575–619) and judicial liquidation (620 et seq.).

Safeguard is therefore an intermediate procedure: more binding than conciliation (collective effect, publicity, stay of proceedings) but less stigmatizing than recovery (the director remains in place and the business is not in suspension of payments).

2.1 Interaction with preventive procedures

Law 73-17 organises a continuum: a director may move from internal prevention to conciliation, then to safeguard, without disruption. Conversely, failure of a conciliation does not bar access to safeguard, provided suspension of payments has not been established.

3. Conditions for opening safeguard (Article 560)

Opening a safeguard requires the cumulative fulfilment of two conditions:

• Economic test: the business must face difficulties it cannot overcome on its own which are likely to lead to suspension of payments. The difficulties must be demonstrable, neither hypothetical nor purely cyclical.
• Negative legal test: the business must not yet be in suspension of payments within the meaning of Article 575 (inability to meet liabilities due with available assets).

3.1 Standing

Only the head of the business may petition for safeguard. No creditor, shareholder or employee may initiate the procedure. This exclusivity distinguishes safeguard from recovery, which can be opened on creditor summons or by the court of its own motion.

3.2 Eligible persons

Safeguard applies to:

• Merchants (natural persons);
• Craftspeople;
• Commercial companies (SARL, SA, SAS, SNC, etc.);
• Limited-liability sole proprietorships.

4. Procedural workflow

4.1 Petition and opening judgment

The director files a reasoned petition with the registry of the commercial court of the registered office (Casablanca, Rabat, Tangier, Marrakech, Fez, Agadir, Oujda, Meknès). The petition sets out the business's economic, financial, social and legal situation and is accompanied by the documents listed in Article 562: annual accounts for the last three financial years, statement of liabilities and assets, statement of security interests, employee list, cash position.

The court rules after hearing the head of the business and any person whose hearing is useful. The opening judgment sets the opening date and appoints the juge-commissaire (supervisory judge) and the syndic (equivalent to a judicial administrator).

4.2 Observation period

The opening triggers an observation period of four months renewable once (eight months maximum), during which:

• Individual enforcement actions by pre-petition creditors are stayed.
• Contractual interest stops accruing, except on loans of one year or more.
• Payment of pre-petition claims is prohibited (save set-off of connected claims).
• The director remains in office: management continues, under the syndic's supervision.

4.3 Inventory and proof of claims

The syndic prepares an inventory of the business's assets. Pre-petition creditors must file proofs of claim within two months of the publication of the opening judgment in the Official Gazette (extended to four months for creditors domiciled outside Morocco).

Failure to file within these deadlines results in time-bar of the claim — unless relief from forfeiture is granted by the supervisory judge under strict conditions.

4.4 Economic and social assessment

The syndic, with the director's input, prepares an economic, financial and social assessment of the business. This assessment determines whether the business has a serious prospect of continuation through a plan, or whether safeguard should be converted into recovery (suspension of payments established) or judicial liquidation (irremediably compromised situation).

5. The safeguard plan

5.1 Drafting

The plan is proposed by the director, with the syndic's assistance. It sets out:

• Liability repayment terms (rescheduling up to ten years, write-offs agreed by creditors);
• Reorganisation measures (partial asset sales, workforce restructuring, recapitalisation);
• Security offered to creditors.

5.2 Creditor consultation

Creditors are consulted individually by the syndic on proposed deferrals and write-offs. Their silence is deemed acceptance if they fail to respond within the prescribed period.

Secured creditors are consulted separately: their security interests can only be affected with their express consent.

5.3 Court approval of the plan

The court approves the plan if there is a serious possibility for the business to be safeguarded. Once approved, the plan is binding on all creditors — including those who rejected the proposals — within the maximum statutory periods (10 years).

Failure to perform the plan may trigger its rescission, followed by the opening of recovery or judicial liquidation.

6. Competent courts and Moroccan specificities

6.1 Territorial jurisdiction

The commercial courts established by Law No. 53-95 have jurisdiction:

• Commercial Court of Casablanca — leading by caseload volume.
• Commercial Court of Rabat — state-owned enterprises and entities with public capital.
• Commercial Courts of Tangier, Marrakech, Fez, Agadir, Oujda, Meknès.

The competent court is that of the registered office or, failing that, of the principal place of business.

6.2 Coordination with sectoral regulators

For regulated businesses, safeguard must be coordinated with:

• Bank Al-Maghrib for credit institutions (Article 67 et seq. of Banking Law 103-12).
• Moroccan Capital Markets Authority (AMMC) for listed companies and issuers making public offerings.
• Insurance and Social Welfare Supervisory Authority (ACAPS) for insurance companies.

7. Strategy: when to recommend safeguard rather than conciliation?

Criterion	Conciliation	Safeguard
Framework	Amicable, confidential	Judicial, public
Suspension of payments	Possible (≤ 30 days)	Prohibited
Stay of proceedings	Not automatic	Yes, observation period
Effect on creditors	Contractual	Binding plan
Maximum duration	3 months + 1 month	8 months observation + 10-year plan
Visibility	None	Statutory publication

Safeguard is preferred where there is a serious risk of holdouts by recalcitrant creditors, or where the automatic stay is essential to stabilise operations.

8. France–Morocco cross-border articulations

For groups operating a French subsidiary and a Moroccan subsidiary, coordinating a Moroccan safeguard with a French procedure (mandat ad hoc, conciliation, sauvegarde, accelerated safeguard) requires:

• Recognition that the European Insolvency Regulation does not apply to Morocco — each procedure remains territorial.
• Use of bilateral judicial cooperation conventions (Franco-Moroccan judicial cooperation convention of 5 October 1957, as amended).
• Negotiation of inter-procedure coordination protocols between syndics and judicial administrators.
• Careful attention to intra-group guarantees (sureties, letters of intent, comfort letters) potentially actionable in each jurisdiction.

9. Conclusion: a tool to mobilise earlier

The safeguard procedure under Law 73-17 is technically mature and provides Moroccan directors with a protective framework — stay of proceedings, continued management, plan binding on creditors — without the stigma of recovery. Effective use requires rigorous anticipation: at the first signs of liquidity strain and before suspension of payments. Coordination with French counsel, sectoral regulators and international lenders is the differentiator in delivering a successful plan.

---

This article is published for information purposes only and does not constitute legal advice. Mac Mahon Avocats handles France–Morocco cross-border restructuring in coordination with leading Moroccan firms.