Article 15 of the Saudi Commercial Papers Law

المادة 15 من نظام الأوراق التجارية · الفصل الثاني: تداول الكمبيالة بالتظهير

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.

Official text (Arabic)

This article has not been amended since the law was issued.

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.

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 15 explained in plain English

A person who endorses a bill of exchange does not merely transfer it but also becomes its guarantor. This article provides that the endorser:

guarantees acceptance and payment of the bill, which is the rule;
but this guarantee applies unless otherwise stipulated, so the endorser may stipulate something different.

The article also gives the endorser another right: to prohibit endorsing the bill again. If the endorser prohibits it and the bill is nevertheless endorsed again, the endorser is not bound by the guarantee to those to whom the bill passes by a later endorsement.

The practical benefit for the holder of a bill of exchange is that every earlier endorser is, as a rule, a guarantor to the holder, so the number of guarantors grows with the number of endorsements. Article 14 explains how an endorsement is written, while Article 16 explains when a possessor is considered the lawful holder.

If you want to limit your liability when endorsing a bill of exchange, or to claim against an endorser, you can consult a lawyer specializing in commercial cases and commercial papers.

Practical example

Nasser endorsed a bill of exchange to an establishment in Riyadh and wrote "may not be endorsed again." The establishment then endorsed it to another company. If the bill is not paid, under Article 15 Nasser is not bound by the guarantee toward the other company, to which the bill passed by the later endorsement.

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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