Article 43 of the Saudi Commercial Court Law
المادة 43 من النظام التجاري نظام المحكمة التجارية · الفصل السادس: في السفاتج ، سندات الحوالة المعبر عنها بالبوليسة والكمبيالة المتداولة بين التجار
The article allows a bill of exchange to be drawn on one person with a condition that it be paid at the place of another person, and also allows it to be drawn at the order of a person on his account.
Official text (Arabic)
This article has not been amended since the law was issued.
يجوز أن تسحب السفاتج على شخص ويشترط فيها الدفع في محل شخص آخر كما يجوز سحبها بأمر شخص على ذمته
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 43 explained in plain English
This article widens the forms of drawing a bill of exchange. After Article 42 set its details, this article allows two forms:
- Drawing the bill on one person with a condition that payment be at the place of another person: The drawee is one person, while payment is made at the place of someone else. This is useful in practice when payment is through another body or place the parties choose.
- Drawing it at the order of a person on his account: Meaning the drawing is at the order of a person and for his account, so the person who ordered the drawing appears in the instrument.
Article 44 then provides that bills drawn contrary to the conditions mentioned above are considered only ordinary instruments, so observing the details and permitted forms of drawing is important for the paper to keep its character as a bill of exchange.
The article adds no new details beyond those in Article 42, and does not change the other conditions of the bill. If you deal in bills in these forms, consult a lawyer who specializes in commercial paper and banking.
Practical example
A company in Dammam drew a bill on a customer in Riyadh, and stipulated that payment be made at the office of its agent in Riyadh. This is a permitted form under the article: a bill drawn on one person with a condition that it be paid at the place of another person.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 43 of the Saudi Commercial Court Law
May a bill of exchange be paid at the place of a person other than the drawee?
Yes. Bills may be drawn on one person with a condition that payment be at the place of another person.
May a bill be drawn at the order of a person on his account?
Yes. The article provides that it may be drawn at the order of a person on his account.
More articles on The Draft and Bill of Exchange and Acceptance
- Article 42
The article sets the details required in a bill of exchange (safta): date, amount, drawee's name, date and place of payment, reason for the value and its receipt, and drawer's signature, and the rule for multiple copies.
سندات الحوالة أي السفاتج التي تسحب من محل على آخر يجب أن تؤرخ ويوضح فيها المبالغ المحولة واسم الشخص المحال عليه وتاريخ ومكان الدفع ويبين فيها أنها قيمة بضاعة أو
- Article 44
The article provides that bills of exchange drawn contrary to the preceding conditions are considered only ordinary instruments.
السفاتج المحررة على خلاف الشروط الآنفة الذكر لا تعتبر إلا كسندات عادية .
- Article 45
The article requires that, when the payment date falls due, the drawee owe the transferor or the person who ordered the drawing an amount not less than the value of the bill.
عند حلول أجل دفع قيمة السفاتج يجب أن يكون في ذمة المحال عليه للمحيل أو للآمر بالسحب مبلغ لا يقل عن قيمة السفتجة .
- Article 46
The article makes acceptance sufficient proof that the acceptor owes the funds covering payment, and requires the drawer to prove the existence of the cover if it is denied, failing which the drawer guarantees the bill's value to the holder.
الشرح على السفتجة بالقبول دليل كاف على أن القابل مدين للساحب أو الآمر بالسحب بما يقابل الوفاء وعلى الساحب وحده أن يثبت في حالة الإنكار أو الامتناع عن الدفع بعد
- Article 47
The article regulates the holder's right to the cover for payment when the drawer goes bankrupt after acceptance, and when the drawee goes bankrupt after accepting, depending on the nature of the cover.
إذا أفلس الساحب بعد قبول المحال عليه ولو قبل حلول أجل الدفع فلحامل السفتجة دون غيره من غرماء الساحب الحق في استلام مقابل الوفاء الذي عند المسحوب عليه وإذا أفلس
- Article 48
The article provides that whoever accepts a bill of exchange is bound to pay its value and may not withdraw after acceptance, even if the drawer went bankrupt without the acceptor's knowledge before acceptance.
من قبل السفتجة صار ملزوما بوفاء قيمتها ولو أفلس الساحب بغير علمه قبل قبوله فلا يجوز له الرجوع بعد القبول .
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.