Article 46 of the Saudi Commercial Court Law
المادة 46 من النظام التجاري نظام المحكمة التجارية · الفصل السادس: في السفاتج ، سندات الحوالة المعبر عنها بالبوليسة والكمبيالة المتداولة بين التجار
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.
Official text (Arabic)
This article has not been amended since the law was issued.
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 القبول أن المحال عليه كان مدينا بما يقابل الوفاء حين استحقاق الدفع فإذا لم يثبت ذلك يضمن لحامل السفتجة قيمة الحوالة تماما ولو عملت الإخطارات في مواعيدها . أما في حالة إثباته فتبرأ ذمته بقدر مبلغ مقابل الوفاء المثبت ما لم يكن قد استعمل في منفعة .
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 46 explained in plain English
This article deals with the effect of acceptance and proving the cover for payment that Article 45 requires.
First: the effect of acceptance. An endorsement on the bill of exchange by acceptance is sufficient evidence that the acceptor owes the drawer, or the person who ordered the drawing, the funds covering payment.
Second: on denial or refusal to pay after acceptance, it falls on the drawer alone to prove that the drawee owed the funds covering payment when payment fell due. The result:
- If the drawer does not prove that: the drawer guarantees to the holder of the bill the full value of the order, even if the notices were given on time.
- If the drawer proves it: the drawer is discharged to the extent of the amount of the cover proved, unless it has been used for a benefit.
The article thus places on the drawer the responsibility for the existence of the cover, because the drawer is the one who issued the order to pay. The discharge is not always complete; it is only to the extent of the cover proved, and on condition that it has not been used for a benefit.
These are delicate matters of proof, so if you are a drawer or the holder of a bill whose acceptor has refused to pay, consult a lawyer specializing in commercial paper.
Practical example
A customer in Jeddah accepted a bill of exchange drawn on him by a supplier, then refused to pay at maturity. If the supplier cannot prove that the customer owed him the funds covering payment when it fell due, the supplier guarantees the full value of the bill to the holder under this article.
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 46 of the Saudi Commercial Court Law
What does the drawee's acceptance of a bill of exchange mean?
An endorsement on the bill by acceptance is sufficient evidence that the acceptor owes the drawer, or the person who ordered the drawing, the funds covering payment.
Who proves the existence of the cover if the acceptor refuses to pay?
The drawer alone. If the drawer does not prove it, the drawer guarantees the full value of the bill to the holder, even if the notices were given on time.
Is the drawer discharged if the existence of the cover is proved?
The drawer is discharged to the extent of the amount of the cover proved, unless it has been used for a benefit.
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 43
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.
يجوز أن تسحب السفاتج على شخص ويشترط فيها الدفع في محل شخص آخر كما يجوز سحبها بأمر شخص على ذمته
- 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 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.