Article 60 of the Saudi Commercial Court Law
المادة 60 من النظام التجاري نظام المحكمة التجارية · الفصل السابع: في تحويل السفاتج المعبر عنه بالجيرو
The article provides that ownership of bills of exchange passes from one person to another by transferring them by endorsement on them.
Official text (Arabic)
This article has not been amended since the law was issued.
تنتقل ملكية السفاتج من واحد لآخر بتحويلها شرحا عليها .
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 60 explained in plain English
This article opens the provisions on transferring bills of exchange, called in the chapter heading "giro", which is known today as endorsement.
The rule in the text: ownership of bills of exchange passes from one person to another by transferring them by endorsement on them. This means:
- That a bill of exchange is negotiable, so it does not remain confined to the relationship between the drawer and the first beneficiary.
- That the means of transferring ownership is writing on the bill itself ("by endorsement on it"), not merely delivering it or agreeing to transfer it in a separate paper.
This feature is what makes a bill of exchange a useful instrument in trade, since its holder can pay a debt he owes to another person with it, or transfer it to someone who pays him its value.
Article 61 follows, setting out the particulars of the transfer: that it be dated, that it state that value has been received, that it name the person to whose order it passes, and that the endorser put his signature or seal. The transfer that passes ownership is therefore one that meets these particulars.
If you are going to endorse a bill or receive one by endorsement, make sure its particulars are correct, and consult a lawyer specializing in commercial paper when needed.
Practical example
A merchant in Jeddah holds a bill of exchange due to him, and he owes a debt to a supplier. The merchant wrote on the back of the bill its transfer to the supplier. Under this article, ownership of the bill passes to the supplier by this transfer written on it.
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 60 of the Saudi Commercial Court Law
How does ownership of a bill of exchange pass?
Ownership of bills of exchange passes from one person to another by transferring them by endorsement on them, that is, by writing on the bill itself.
What is giro?
It is the term used in the chapter heading for the transfer of bills of exchange, that is, what is known as endorsement.
More articles on Endorsement, Payment and Recourse on the Draft
- Article 51
The article makes the drawer of a bill of exchange and the endorsers who transferred it jointly liable for its acceptance and for payment on time, and jointly bound to pay its holder.
صاحب السفتجة والمحيلون المتناقلون لها مسئولون على وجه التضامن عن القبول والدفع في ميعاده وملزمون لحاملها بالوفاء على وجه التضامن
- Article 57
The article provides that the intervener is not bound to pay the bill's value on the due date except after notice of non-payment has been given within the set time.
لا يجب على المتوسط المذكور دفع قيمة السفتجة في ميعاد استحقاق الدفع إلا بعد عمل الإخطار بعدم الدفع في الميعاد المحدود .
- Article 61
The article sets the particulars of a bill's transfer: the date, a statement that value has been received, the name and surname of the person to whose order it passes, and the endorser's signature or seal.
يؤرخ تحويل السفتجة ويذكر فيها أن قيمتها وصلت ويبين فيها اسم وشهرة من انتقلت تحت إذنه ويضع المحيل إمضاءه أو ختمه .
- Article 62
The article provides that a transfer of a bill of exchange that does not meet the conditions of Article 61 does not pass ownership but counts as an ordinary authorization to collect its value.
إذا لم يستوف تحويل السفتجة شرائطه المبينة في المادة السابقة فلا يوجب انتقال الملك بل يعد توكيلا اعتياديا في قبض قيمتها .
- Article 63
The article prohibits putting dates in transfers ahead of their true date, and treats that as forgery if it occurs.
تقديم التواريخ في التحاويل عن تاريخها الحقيقي ممنوع وإن حصل يعد ذلك تزويرا .
- Article 64
The article permits payment of a bill's value, besides being secured by acceptance and transfer, to be guaranteed by a person as a guarantee in support, written on the bill itself or on a separate paper.
دفع قيمة السفتجة علاوة على كونه مضمونا بالقبول والتحويل يجوز ضمانه من شخص ضمانا احتياطيا ويكون ذلك بكتابه على نفس السفتجة أو في ورقة مستقلة .
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.