Article 53 of the Saudi Commercial Court Law
المادة 53 من النظام التجاري نظام المحكمة التجارية · الفصل السادس: في السفاتج ، سندات الحوالة المعبر عنها بالبوليسة والكمبيالة المتداولة بين التجار
The article gives the holder, after producing the notice instrument, the right to demand from the endorser a guarantor who guarantees the bill's value at the set date, and obliges anyone who refuses to provide one to pay the value and the costs.
Official text (Arabic)
This article has not been amended since the law was issued.
يحق لحامل السفتجة بعد إبراز سند إخطاره المذكور أن يطالب محيله بكفيل يضمن قيمة السفتجة في الميعاد المعين ولكل من المحيلين المتناقلين هذا الحق عن التقاعد إلى أن يستقر الأمر على الساحب ومن امتنع عن إحضار الكفيل يلزم بدفع قيمة السفتجة ومصاريف الإخطار والرجوع .
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 53 explained in plain English
This article explains what the holder of a bill of exchange is entitled to after proving non-acceptance by the notice provided for in Article 52:
- After producing the notice instrument, the holder is entitled to demand from the endorser a guarantor who guarantees the bill's value on the set date.
- Each of the successive endorsers also has this right in turn, so each endorser demands it from the one who transferred the bill to him, until the matter settles on the drawer.
- Anyone who refuses to provide the guarantor must pay:
- the value of the bill.
- the costs of the notice and of recourse.
The article does not, in principle, make non-acceptance a ground for an immediate claim for the value; it gives the holder the right to ask for a guarantee (a guarantor) that the value will be paid on its date. If the guarantor is not provided, the one who refused is bound to pay with the costs.
Note that the notice is a condition for this right, since the text says "after producing the instrument of its said notice". Article 54 follows, requiring a bill of exchange to be accepted on presentation or within a period not exceeding twenty-four hours.
Because the sequence of claims among endorsers is delicate, it is advisable to consult a lawyer specializing in commercial paper.
Practical example
The drawee refused to accept a bill held by a merchant in Jeddah, so the merchant had the notice drawn up before the notary public and then demanded from the person who transferred it to him a guarantor who guarantees its value on its date. The endorser refused to provide the guarantor, so he became bound to pay the value of the bill and the costs of the notice and of recourse.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
How we write and review contentCommercial & Corporate Law lawyers: ask a specialist about your case
Describe your situation briefly and we'll suggest a lawyer who specialises in this law
Commercial & Corporate Law lawyers
Lawyers who handle this kind of case
Ibrahim Al Salem Law Firm
Active contributor
Dr. Ali Al-Rubaie Law Office and Ittihad Al-Asr Legal Company
Frequently asked questions about Article 53 of the Saudi Commercial Court Law
What should I do if acceptance of a bill of exchange is refused?
After producing the notice instrument, you are entitled to demand from your endorser a guarantor who guarantees the value of the bill on the set date.
What is the consequence for an endorser who refuses to provide a guarantor?
The endorser must pay the value of the bill and the costs of the notice and of recourse.
Do successive endorsers have the same right?
Yes. Each of the successive endorsers has this right in turn, until the matter settles on the drawer.
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 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
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.