Article 27 of the Saudi Commercial Papers Law
المادة 27 من نظام الأوراق التجارية · الفصل الثالث: قبول الكمبيالة
Article 27 provides that where the drawer designates a place of payment other than the drawee's domicile without naming who is to pay there, the drawee may name that person at acceptance, failing which the acceptor must pay at the place of payment.
Official text (Arabic)
This article has not been amended since the law was issued.
إذا عين الساحب في الكمبيالة مكانا للوفاء غير موطن المحسوب عليه دون أن يعين من يجب الوفاء عنده جاز للمسحوب عليه تعيينه عند القبول، فإذا لم يعينه اعتبر القابل ملزما بالدفع في مكان الوفاء.
وإذا كانت الكمبيالة مستحقة الوفاء في موطن المسحوب عليه جاز له أن يعين في صيغة القبول عنوانا في الجهة التي يجب أن يقع فيها 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 27 explained in plain English
This article regulates the drawee's role in specifying exactly where payment is made when accepting a bill of exchange, and addresses two cases:
First case: the place of payment is not the drawee's domicile. If the drawer designates in the bill a place of payment other than the drawee's domicile, without naming the person at whose premises payment is to be made:
- the drawee may name this person at acceptance.
- If the drawee does not name one, the acceptor is considered bound to pay at the place of payment.
Second case: payment at the drawee's domicile. If the bill is payable at the drawee's domicile, the drawee may state in the wording of acceptance an address in the locality where payment is to be made.
The practical benefit is that at acceptance the holder knows where and from whom the amount will be collected, and that a drawee who does not specify who is to pay bears the obligation to pay at the place of payment.
This article follows Article 26 on striking out acceptance, and precedes Article 28, which provides that the drawee who accepts becomes bound to pay the value of the bill on its due date.
In a dispute over the place of payment, you can consult a lawyer specializing in commercial cases and commercial papers.
Practical example
A bill of exchange was drawn on a merchant living in Buraidah, and the drawer designated Riyadh as the place of payment without naming who would pay there. At acceptance, the merchant wrote the name of a person in Riyadh at whose premises payment would be made. Had he not done so, he would be considered bound to pay in Riyadh under Article 27.
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 27 of the Saudi Commercial Papers Law
Who names the person at whose premises a bill of exchange is paid at the place of payment?
If the drawer has not named one, the drawee may name that person at acceptance.
What if the drawee does not name who is to pay?
The acceptor is considered bound to pay at the place of payment.
May the drawee specify an address for payment?
Yes, if the bill is payable at the drawee's domicile, the drawee may name an address in the locality where payment is to be made.
More articles on Bill of Exchange
- Article 1
The article sets out the eight particulars a bill of exchange must contain, including the word "bill of exchange", the amount, the name of the drawee, the due date and the drawer's signature.
تشتمل الكمبيالة على البيانات الآتية: أ - كلمة (كمبيالة) مكتوبة في متن الصك وباللغة التي كتب بها. ب - أمر غير معلق على شرط بوفاء مبلغ معين من النقود. ج - اسم من
- Article 2
An instrument lacking the particulars of Article 1 is not a bill of exchange, except where the due date, place of payment, drawee's domicile or place of issue is missing, each of which has a substitute rule.
لا يعتبر الصك الخالي من البيانات المذكورة في المادة السابقة كمبيالة إلا في الأحوال الآتية: أ - إذا خلت الكمبيالة من بيان ميعاد الاستحقاق، اعتبرت مستحقة الوفاء ل
- Article 3
The article permits three ways of drawing a bill of exchange: to the drawer's own order, on the drawer himself, or for the account of another person.
يجوز سحب الكمبيالة لأمر الساحب نفسه، ويجوز سحبها على ساحبها، ويجوز سحبها لحساب شخص آخر.
- Article 4
The article permits stipulating that a bill of exchange be paid at the domicile of a person other than the drawee, whether in the drawee's town or in another.
يجوز اشتراط وفاء الكمبيالة في موطن شخص آخر غير المسحوب عليه سواء كان هذا الموطن في الجهة التي فيها موطن المسحوب عليه أو في جهة أخرى.
- Article 5
If the amount of a bill written in words differs from the amount in figures, the words prevail; if the amount is written several times and differs, the smaller amount prevails.
إذا كتب مبلغ الكمبيالة بالحروف وبالأرقام معا فتكون العبرة عند الاختلاف بالمكتوب بالحروف، وإذا كتب المبلغ عدة مرات بالحروف أو بالأرقام فتكون العبرة عند الاختلاف
- Article 6
Article 6 provides that any stipulation of interest on the amount of a bill of exchange is treated as if it had not been written.
اشتراط فائدة الكمبيالة يعتبر كأن لم يكن.
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.