Article 71 of the Saudi Commercial Court Law

المادة 71 من النظام التجاري نظام المحكمة التجارية · الفصل السابع: في تحويل السفاتج المعبر عنه بالجيرو

The article provides that payment on the basis of another copy of a bill of exchange, without recovering the copy bearing the form of acceptance, is not valid and does not discharge the payer as against the holder of that copy.

Official text (Arabic)

This article has not been amended since the law was issued.

إذا دفعت قيمة السفتجة بناء على نسختها الثانية والثالثة أو الرابعة وهكذا من غير استرجاع النسخة التي عليها صيغة قبوله لا يعد دفعه صحيحا ولا تبرأ ذمته بالنسبة لحامل النسخة التي عليها صيغة القبول .

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 71 explained in plain English

This article places a fundamental limit on payment by multiple copies. If the value of a bill is paid on the basis of its second, third, fourth copy and so on, without recovering the copy bearing the form of acceptance:

the payment is not valid,
and the payer is not discharged as against the holder of the copy bearing the form of acceptance.

The reason is that the accepted copy carries the acceptor's obligation by his signature, and if it remains in circulation with someone else, its holder may claim on it. The text therefore protects the holder of the accepted copy, and places on the payer a duty of caution: to recover that copy before paying on the basis of another.

This article completes the ruling of Article 70 before it, which makes payment on the second, third or fourth copy valid if it is written on it that payment on it cancels the other copies. Together the two rulings mean that the cancellation phrase alone is not enough to protect the payer as against the holder of the accepted copy.

If you are the acceptor of a bill with several copies and you are asked to pay on a copy other than the one you signed, consult a lawyer specializing in commercial paper before paying.

Practical example

A merchant in Riyadh accepted the first copy of a bill of exchange, and others then circulated it. A person presented the second copy to him and he paid him, without recovering the accepted first copy. Under this article he is not discharged as against the holder of the accepted first copy.

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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