Article 13 of the Saudi Commercial Papers Law
المادة 13 من نظام الأوراق التجارية · الفصل الثاني: تداول الكمبيالة بالتظهير
Article 13 requires an endorsement to be free of any condition, treats a condition attached to it as if not written, makes a partial endorsement void, and treats an endorsement to bearer as a blank endorsement.
Official text (Arabic)
This article has not been amended since the law was issued.
يجب أن يكون التظهير خاليا من كل شرط، وكل شرط علق عليه التظهير يعتبر كأن لم يكن. والتظهير الجزئي باطل. ويعتبر التظهير للحامل تظهيرا على بياض.
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 13 explained in plain English
This article sets out three rules for the validity of endorsing a bill of exchange:
- An endorsement must be free of every condition: if an endorsement is made subject to a condition, the condition is treated as if not written, meaning the condition is disregarded and the endorsement stands.
- A partial endorsement is void: the holder may not endorse part of the amount of the bill and keep the rest.
- An endorsement to bearer is treated as a blank endorsement: that is, writing words transferring the bill "to its bearer" without naming anyone is treated as a blank endorsement.
The difference between the first two rules is important: a condition in an endorsement is struck out on its own, whereas a partial endorsement is void.
Article 14 explains what a blank endorsement is, namely an endorsement in which the endorsee's name is not written or which is limited to the endorser's signature, and what the holder may then do. Before that, Article 12 provides that a bill of exchange may be transferred by endorsement.
In practice, someone endorsing a bill of exchange should not rely on a condition added to the endorsement, and should not try to endorse part of the bill. For a particular situation, you can consult a lawyer specializing in commercial cases and commercial papers.
Practical example
Sultan wanted to endorse a bill of exchange for SAR 30,000 to a supplier, so he wrote: "I endorse it to the order of the supplier on condition of delivery of the goods." Under Article 13, the condition is disregarded and the endorsement stands. Had he tried to endorse only SAR 10,000 of it, the endorsement would have been void because it is partial.
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 13 of the Saudi Commercial Papers Law
What is the rule for a conditional endorsement of a bill of exchange?
A condition attached to an endorsement is treated as if it had not been written.
Can part of the amount of a bill of exchange be endorsed?
No, a partial endorsement is void.
What is the rule for an endorsement to bearer?
It is treated as a blank endorsement.
More articles on Endorsing Commercial Papers
- Article 12
Article 12 allows a bill of exchange to be transferred by endorsement even if not expressly drawn to order, bars endorsement where the drawer writes "not to order", and permits endorsement to the drawee, the drawer or any other obligor.
يجوز تداول الكمبيالة بالتظهير ولو لم يذكر فيها صراحة إنها مسحوبة (لا أمر). ولا يجوز تداول الكمبيالة التي يضع فيها ساحبها عبارة (ليست لأمر) أو أية عبارة مماثلة إ
- Article 14
Article 14 sets out how an endorsement is written on a bill of exchange or an attached paper and signed by the endorser, permits a blank endorsement, and states the holder's options in that case.
يكتب التظهير على الكمبيالة ذاتها أو على ورقة أخرى متصلة بها ويوقعه المظهر. ويجوز ألا يكتب في التظهير اسم المظهر إليه ، كما يجوز أن يقتصر التظهير على توقيع المظه
- Article 15
Article 15 makes the endorser guarantee acceptance and payment of the bill of exchange unless otherwise stipulated, and lets the endorser prohibit re-endorsement, in which case the endorser does not guarantee to those who receive the bill by a later endorsement.
يضمن المظهر قبول الكمبيالة ووفائها ما لم يشترط غير ذلك. ويجوز له حظر تظهيرها من جديد، وفي هذه الحالة لا يكون ملزما بالضمان لمن تؤول إليهم الكمبيالة بتظهير لاحق.
- Article 16
Article 16 treats the possessor of a bill of exchange as its lawful holder if they prove their right by an unbroken series of endorsements, and protects a holder from having to give up a lost bill unless they obtained it in bad faith or by gross fault.
يعتبر حائز الكمبيالة حاملها الشرعي متى أثبت أنه صاحب الحق فيها بتظهيرات غير منقطعة ولو كان آخرها تظهيرا على بياض. والتظهيرات المشطوبة تعتبر في هذا الشأن كأن لم
- Article 17
Article 17 provides that endorsement transfers all rights arising from the bill of exchange, and bars a defendant from raising against the holder defenses based on their personal relationship with the drawer or earlier holders unless the holder intended to harm the debtor.
ينقل التظهير جميع الحقوق الناشئة عن الكمبيالة. وليس لمن أقيمت عليه دعوى بكمبيالة أن يحتج على حاملها بالدفوع المبينة على علاقته الشخصية بساحبها أو بحامليها الساب
- Article 18
Article 18 regulates endorsement for collection with words such as "value for collection": the holder exercises the bill's rights but may endorse it only as agent, faces only defenses available against the endorser, and the agency does not end on the principal's death or loss of capacity.
إذا اشتمل التظهير على عبارة (القيمة للتحصيل) أو (القيمة للقبض) أو (بالتوكيل) أو أية عبارة مماثلة تفيد التوكيل، فللحامل مباشرة جميع الحقوق الناشئة عن الكمبيالة،
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.