Article 54 of the Saudi Commercial Court Law
المادة 54 من النظام التجاري نظام المحكمة التجارية · الفصل السادس: في السفاتج ، سندات الحوالة المعبر عنها بالبوليسة والكمبيالة المتداولة بين التجار
The article requires a bill of exchange to be accepted on presentation or within a period not exceeding 24 hours, and makes anyone who keeps it without returning it afterward liable for all damage and loss.
Official text (Arabic)
This article has not been amended since the law was issued.
يتحتم قبول السفتجة حال تقديمها أو في مدة لا تتجاوز أربعة وعشرين ساعة من حين التقديم فإن لم ترد لحاملها بعد أربعة وعشرين ساعة سواء قبلت أو لم تقبل، كان من حجزها ضامنا لكل ضرر وخسارة تنشأ من ذلك
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 54 explained in plain English
This article specifies the time limit for acceptance and deals with the problem of withholding the bill of exchange:
- A bill of exchange must be accepted either on presentation, or within a period not exceeding twenty-four hours from presentation.
- If it is not returned to its holder after twenty-four hours, whether accepted or not accepted, whoever withheld it is liable for all damage and loss arising from that.
The article prevents the drawee from procrastinating, because delaying acceptance or keeping the bill obstructs the holder's rights: the holder needs to know the drawee's position quickly, to take what is required if it is not accepted, such as demanding from the endorser a guarantor who guarantees the value of the bill after producing the notice instrument, as Article 53 provides.
Note that the liability is tied to not returning the bill to its holder after the period, and that the text covers both acceptance and non-acceptance. As for the amount of damage, the article does not specify it; it makes the one who withheld it liable for all damage and loss arising from the withholding.
If your bill of exchange has been withheld or you were harmed by delay in returning it, consult a lawyer specializing in commercial paper to assess your claim.
Practical example
A merchant in Riyadh presented a bill of exchange to a company on which it was drawn, and the company kept it for three days without returning it. Under this article, the company is liable for all damage and loss that arises for the merchant because it withheld the bill after twenty-four hours had passed.
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 54 of the Saudi Commercial Court Law
What is the time limit for accepting a bill of exchange?
It must be accepted on presentation or within a period not exceeding twenty-four hours from presentation.
What if the drawee keeps the bill and does not return it?
If it is not returned to its holder after twenty-four hours, whether accepted or not, whoever withheld it is liable for all damage and loss arising from that.
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.