Article 107 of the Saudi Commercial Papers Law
المادة 107 من نظام الأوراق التجارية · الفصل الخامس: تقديم الشيك ووفاؤه
The Article governs payment in the Kingdom of a check stipulated in a currency not in circulation there: payment in local currency at the rate on the day of payment, with a choice for the holder and rules for special cases.
Official text (Arabic)
This article has not been amended since the law was issued.
إذا اشترط وفاء الشيك في المملكة بنقد غير متداول فيها وجب وفاء مبلغه في ميعاد تقديم الشيك بالنقد المتداول في المملكة حسب سعره يوم الوفاء، فإذا لم يتم الوفاء يوم التقديم كان للحامل الخيار بين المطالبة بمبلغ الشيك مقومًا بالنقد المتداول في المملكة حسب سعره في يوم التقديم أو في يوم الوفاء.
فإذا قدم الشيك للمرة الأولى بعد انقضاء ميعاد تقديمه كانت العبرة بسعر اليوم الذي انتهى فيه ميعاد التقديم، ويتبع العرف السائد في المملكة لتقويم النقد الأجنبي وإنما يجوز للساحب أن يعين في الشيك السعر الذي يحسب على أساسه المبلغ الواجب دفعه. وإذا عين مبلغ الشيك بنقود تحمل اسما مشتركا ولكن تختلف قيمتها في بلد الإصدار عن قيمتها في بلد الوفاء كان المقصود نقود بلد الوفاء.
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 107 explained in plain English
This Article deals with a check written in a currency that is not in circulation in the Kingdom and payable there, and it sets the following rules:
- The rule: the amount of the check is paid within its presentment period in the currency in circulation in the Kingdom at its rate on the day of payment.
- If payment is not made on the day of presentment: the holder has the choice between claiming the amount of the check valued in the currency in circulation in the Kingdom at its rate on the day of presentment or on the day of payment.
- If the check is presented for the first time after its presentment period has expired: the rate on the day on which the presentment period ended is what counts.
- How foreign currency is valued: the custom prevailing in the Kingdom is followed; however, the drawer may specify in the check the rate on the basis of which the amount is calculated.
- Currencies with a common name: if the amount is specified in a currency that has a common name but whose value differs in the country of issue and the country of payment, the currency of the country of payment is meant.
This Article is linked to Article 106 on competing checks, and precedes Article 108, which regulates the holder's recourse upon refusal of payment.
Anyone holding a check in foreign currency over whose conversion rate a dispute has arisen may consult a lawyer who specializes in banking and commercial papers.
Practical example
A company in Riyadh received a check in US dollars payable in the Kingdom and presented it within the period, but the bank did not pay it on the day of presentment. Under this Article, the company may choose to claim the amount of the check valued in riyals at the rate on the day of presentment or the rate on the day of payment, unless the drawer specified in the check a rate for the calculation.
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 107 of the Saudi Commercial Papers Law
How is a check in foreign currency cashed in Saudi Arabia?
Its amount is paid within its presentment period in the currency in circulation in the Kingdom at its rate on the day of payment.
Which rate applies if the bank delays payment?
If payment is not made on the day of presentment, the holder may choose between the rate on the day of presentment and the rate on the day of payment.
May the drawer specify the exchange rate in the check?
Yes. The drawer may specify in the check the rate on the basis of which the amount payable is calculated.
More articles on The Check
- Article 91
The Article lists the mandatory particulars of a check: the word check, an unconditional order to pay a fixed sum, the drawee's name, place of payment, date and place of issue, and the drawer's signature.
يشتمل الشيك على البيانات الآتية: أ - كلمة (شيك) مكتوبة في متن الصك باللغة التي كتب بها. ب - أمر غير معلق على شرط بوفاء مبلغ معين من النقود. جـ - اسم من يلزمه ال
- Article 92
The Article provides that an instrument lacking a check particular listed in Article 91 is not a check, unless the missing particular is the place of payment or the place of issue.
الصك الخالي من أحد البيانات المذكورة في المادة السابقة لا يعتبر شيكا إلا في الحالتين الآتيتين: أ - إذا خلا الشيك من بيان مكان وفائه اعتبر مستحق الوفاء في المكان
- Article 93
The Article requires checks issued in the Kingdom and payable there to be drawn on a bank, and treats instruments drawn on anyone other than a bank as invalid checks.
لا يجوز سحب الشيكات الصادرة في المملكة والمستحقة الوفاء فيها إلا على بنك، والصكوك المسحوبة في صورة شيكات على غير بنك لا تعتبر شيكات صحيحة.
- Article 94
The Article bars issuing a check unless the drawer has funds with the drawee that can be disposed of by check at the time of issue, and requires the drawer to prove cover if denied; lack of cover does not void the check.
لا يجوز إصدار شيك ما لم يكن للساحب لدى المسحوب عليه وقت إنشاء الشيك نقود يستطيع التصرف فيها بموجب شيك طبقا لاتفاق صريح أو ضمني. وعلى ساحب الشيك أو الآمر غيره بس
- Article 95
The Article allows a check to be payable to a named person with or without an order clause, to a named person with a not-to-order clause, or to bearer, and sets when a check counts as a bearer check.
يجوز اشتراط وفاء الشيك إلى: أ - شخص معين مع النص صراحة على شرط الأمر أو بدونه. ب - شخص معين مع ذكر شرط (ليس لأمر) أو أية عبارة أخرى تفيد هذا المعنى. جـ - حامل ا
- Article 96
The Article allows a check to be drawn to the drawer's own order or for another person's account, and bars drawing it on the drawer himself except between branches of one bank, provided it is not a bearer check.
يجوز سحب الشيك لأمر الساحب نفسه، ويجوز سحبه لحساب شخص آخر، ولا يجوز سحبه على الساحب نفسه ما لم يكن مسحوبا بين فروع بنك يسيطر عليه مركز رئيسي واحد ويشترط ألا يكو
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.