Article 81 of the Saudi Commercial Court Law
المادة 81 من النظام التجاري نظام المحكمة التجارية · الفصل السابع: في تحويل السفاتج المعبر عنه بالجيرو
The article provides that payment by intervention on behalf of the drawer discharges all the endorsers, and payment on behalf of one of the endorsers discharges those after him.
Official text (Arabic)
This article has not been amended since the law was issued.
الدفع بالتوسط إن كان عن الساحب برأت ذمة جميع المحيلين وإن كان عن أحد المحيلين برأت ذمة من بعده منهم .
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 81 explained in plain English
This article explains who is discharged on payment by intervention, which depends on the person on whose behalf the intervention is made:
- If payment by intervention is on behalf of the drawer: all the endorsers are discharged.
- If it is on behalf of one of the endorsers: those after him among them are discharged.
To understand this, picture a bill of exchange as a chain: the drawer at its start, then the endorsers one after another. If payment is made on behalf of the drawer, who is first in the chain, there is no reason left to pursue any endorser. If payment is made on behalf of an endorser in the middle of the chain, those who came after him are freed, while those before him and the one paid for remain in their position.
This article is linked to Article 80 before it, which transfers to the intervening person all the legal rights and duties of the holder of the bill. Article 82 follows, dealing with several persons competing to pay by intervention, giving preference to the one whose payment discharges more of those liable than others. Hence the importance of identifying the person on whose behalf payment is made: payment on behalf of the drawer achieves the greatest discharge.
If you are an endorser on a bill that was paid by intervention and want to know your position, consult a lawyer who specializes in commercial paper.
Practical example
A bill of exchange was drawn by Saad, who endorsed it to Fahd, then Fahd to Majed, then to the holder. An intervening person pays its value on behalf of Fahd. Under this article, Majed, who came after Fahd, is discharged. Had payment been on behalf of Saad, the drawer, all the endorsers would have been discharged.
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 81 of the Saudi Commercial Court Law
Who is discharged if a bill of exchange is paid by intervention on behalf of the drawer?
All the endorsers are discharged.
And if payment is on behalf of one of the endorsers?
Those after him among the endorsers are discharged.
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.