Article 56 of the Saudi Commercial Court Law
المادة 56 من النظام التجاري نظام المحكمة التجارية · الفصل السادس: في السفاتج ، سندات الحوالة المعبر عنها بالبوليسة والكمبيالة المتداولة بين التجار
The article provides that all the holder's rights against the drawer and the endorsers arising from the drawee's non-acceptance remain preserved, even if an intervener accepted the bill.
Official text (Arabic)
This article has not been amended since the law was issued.
جميع حقوق حامل السفتجة محفوظة له على الساحب والمحيلين؛ بسبب عدم قبول المسحوب عليه، وإن حصل القبول من متوسط .
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 56 explained in plain English
This article completes the ruling on acceptance by intervention in Article 55, and answers an important question: does the holder of a bill of exchange lose rights against the drawer and the endorsers if an intervener accepts it?
The answer in the text is explicit: all the holder's rights are preserved against:
- The drawer.
- And the endorsers.
This is because of the drawee's non-acceptance, even if acceptance came from an intervener.
Acceptance by intervention is therefore not treated as a substitute that wipes out the rights the holder acquired because the original drawee refused. The holder may still rely on these rights against the drawer and the endorsers, while the intervener's obligation is added to the holder's guarantees.
The reason is that the holder did not choose the intervener, and did not agree to release the drawer or the endorsers, so the holder should not lose rights because of another's act.
Article 57 follows, providing that the intervener is not bound to pay the value of the bill on the due date except after notice of non-payment has been given at the set time.
If you hold a bill that an intervener accepted and want to know your rights in detail, consult a lawyer specializing in commercial paper.
Practical example
An intervener accepted a bill of exchange held by a merchant in Dammam after the drawee rejected it. Under this article the merchant keeps all his rights against the drawer and the endorsers arising from the drawee's non-acceptance, despite the intervener's acceptance.
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 56 of the Saudi Commercial Court Law
Do I lose my right against the drawer if an intervener accepts the bill?
No. All the holder's rights against the drawer and the endorsers because of the drawee's non-acceptance are preserved, even if acceptance came from an intervener.
When does the intervener pay the value of the bill?
Under Article 57, the intervener is not bound to pay on the due date except after notice of non-payment has been given at the set time.
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.