Article 72 of the Saudi Commercial Court Law
المادة 72 من النظام التجاري نظام المحكمة التجارية · الفصل السابع: في تحويل السفاتج المعبر عنه بالجيرو
The article limits the acceptable grounds for refusing to pay the value of a bill of exchange to its loss or the appearance of its holder's bankruptcy.
Official text (Arabic)
This article has not been amended since the law was issued.
لا يقبل التمنع عن أداء قيمة السفتجة إلا في حالة ضياعها أو ظهور إفلاس حاملها .
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 72 explained in plain English
This article lays down a strict rule to protect the holder of a bill of exchange: refusal to pay the value of the bill is not accepted except in two cases only:
- Loss of the bill.
- The appearance of its holder's bankruptcy.
The exclusive wording of the text ("is not accepted... except") means that refusing to pay for any reason other than these two is not acceptable. This reflects the nature of a bill of exchange as an instrument of payment that merchants rely on, so payment on it should not be held up for reasons other than these two.
The rationale for the two exceptions is evident:
- In loss, the person claiming the value may not be the person entitled, or more than one person may claim it.
- In the holder's bankruptcy, payment to him may not be discharging, or the rights of his creditors may attach to it.
Articles 73 and after regulate the rules on the loss of a bill: Article 73 provides that if a bill that does not bear the form of acceptance is lost, the person entitled to it may claim on any copy of it.
If the drawee refuses to pay a bill you hold for another reason, or you are a debtor who thinks you have a reason to refuse, consult a lawyer specializing in commercial paper.
Practical example
A merchant in Jeddah refused to pay a bill due from him on the ground that he was busy settling his accounts. This reason is not one of the two cases the article accepts, which are the loss of the bill or the appearance of its holder's bankruptcy, so his refusal is not accepted.
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 72 of the Saudi Commercial Court Law
When may payment of a bill of exchange be refused?
Refusal to pay the value of a bill is not accepted except in the case of its loss or the appearance of its holder's bankruptcy.
May payment be refused for other reasons?
The wording of the text is exclusive, so refusal is not accepted except in the two cases mentioned.
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.