Article 64 of the Saudi Commercial Court Law
المادة 64 من النظام التجاري نظام المحكمة التجارية · الفصل السابع: في تحويل السفاتج المعبر عنه بالجيرو
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.
Official text (Arabic)
This article has not been amended since the law was issued.
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 .
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 64 explained in plain English
This article establishes an additional means of strengthening a bill of exchange, which is the guarantee in support (the aval).
Payment of the value of a bill is already secured by two things the text mentions:
- Acceptance.
- Transfer.
In addition to that, a person may guarantee it as a guarantee in support. This guarantee is given in one of two ways:
- By writing on the bill itself.
- Or on a separate paper.
The practical benefit is that the holder of the bill gets an additional guarantor alongside the original obligors, which increases confidence in the bill and makes it easier to circulate, especially if the solvency of the drawer or the drawee is not known.
Article 65 then explains the position of this guarantor: a guarantor in support, whether for the owner of the bill or for its endorser, stands equal to the drawers and endorsers in guaranteeing payment jointly, unless there is a stipulation between them to the contrary.
The article does not specify a particular wording for the guarantee. If you are going to guarantee a bill for another, know that you are bound to pay it, and consult a lawyer specializing in commercial paper before signing.
Practical example
A supplier in Dammam asked for an additional guarantee for a bill he drew on a new customer, and the customer's friend wrote on the bill that he guarantees payment of its value. This is a permitted guarantee in support under the article, and it could also have been written on a separate paper.
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 64 of the Saudi Commercial Court Law
What is the guarantee in support of a bill of exchange?
It is a guarantee of payment of the value of the bill by a person, in addition to its being secured by acceptance and transfer.
Where is the guarantee in support written?
On the bill itself or on a separate paper.
What is the guarantor in support's liability?
Under Article 65, the guarantor is equal to the drawers and endorsers in guaranteeing payment jointly, unless there is a stipulation to the contrary.
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 60
The article provides that ownership of bills of exchange passes from one person to another by transferring them by endorsement on them.
تنتقل ملكية السفاتج من واحد لآخر بتحويلها شرحا عليها .
- 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 .
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.