Article 93 of the Saudi Commercial Court Law
المادة 93 من النظام التجاري نظام المحكمة التجارية · الفصل السابع: في تحويل السفاتج المعبر عنه بالجيرو
The article bars the bill holder and his endorser from recourse against the drawer if it is proven that funds were provided with the drawee at maturity, leaving the holder only a claim against the drawee.
Official text (Arabic)
This article has not been amended since the law was issued.
لا حق لحامل السفتجة ومحيلها في الرجوع على الساحب إذا ثبت أن له مقابل الوفاء عند المسحوب عليه في وقت استحقاق الدفع وفي هذه الحالة لا يبقى لحاملها حق المطالبة إلا على المسحوب عليه .
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 93 explained in plain English
This article protects the drawer who provided funds to cover payment. The rule:
- The holder of the bill and his endorser have no right of recourse against the drawer,
- if it is proven that he had funds to cover payment with the drawee,
- at the time payment fell due.
In that case, the holder has no right to claim except against the drawee.
The logic is that the drawer did what was required of him when he placed with the drawee funds sufficient for payment at the time of maturity. If payment is not made, the one responsible is the drawee, who holds those funds.
Note that the text requires the existence of the funds to be proven, and to be at the time payment fell due specifically. The article does not specify on whom the burden of proof lies.
Before it, Article 92 provides that the holder's right against the endorsers lapses when time limits are missed. Article 94 follows, restoring the holder's right to claim against the drawer and endorsers if the sums that were set aside for payment of the bill's value reach one of them after the time limits have passed.
If you are a drawer who wishes to raise the defense that funds existed, or a holder facing this defense, consult a lawyer who specializes in commercial paper.
Practical example
A merchant in Jeddah draws a bill on a customer who owed him an amount covering its value at maturity, and the customer then does not pay. If the existence of these funds at maturity is proven, the holder has no recourse against the merchant who drew the bill, and is left only with a claim against the customer who is the drawee.
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 93 of the Saudi Commercial Court Law
Can recourse be had against the drawer if funds to cover payment existed?
No. If it is proven that he had funds to cover payment with the drawee at the time payment fell due, the holder of the bill and his endorser have no right of recourse against him.
Whom can the holder claim against in this case?
The holder has no right to claim except against the drawee.
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.