Article 32 of the Saudi Commercial Papers Law
المادة 32 من نظام الأوراق التجارية · الفصل الرابع: مقابل الوفاء
Article 32 sets the order of holders of bills of exchange falling due on the same date when they compete for funds for payment that are not enough for all of them.
Official text (Arabic)
This article has not been amended since the law was issued.
إذا تزاحمت عدة كمبيالات مستحقة الوفاء في تاريخ واحد على مقابل وفاء لا تكفي قيمته لوفائها كلها روعي ترتيب تواريخ سحبها فيما يتعلق بحقوق حامليها في استيفاء حقوقهم من مقابل الوفاء المذكور، ويكون حامل الكمبيالة السابق تاريخها على تواريخ الكمبيالات الأخرى مقدما على غيره. فإذا كانت الكمبيالات مسحوبة في تاريخ واحد قدمت الكمبيالة التي تحمل قبول المسحوب عليه، وإذا لم تحمل أية كمبيالة قبول المسحوب عليه قدمت الكمبيالة التي خصص لوفائها مقابل الوفاء، أما الكمبيالات التي تشتمل على شرط عدم القبول فتأتي في المرتبة الأخيرة.
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 32 explained in plain English
A drawer may draw several bills of exchange on the same drawee, all of which fall due on the same date, while the funds for payment are not enough to pay them all. Article 32 sets clear rules for ranking holders in collecting their rights from these funds:
- The earliest drawing date: the order of the dates on which the bills were drawn is observed, and the holder of the bill with the earliest date takes precedence over the others.
- Where the drawing date is the same: the bill that bears the drawee's acceptance is given priority.
- If none bears acceptance: the bill for whose payment the funds were allocated is given priority.
- Bills containing a "no acceptance" condition: these come last.
This article is linked to Article 31, which provides that ownership of the funds for payment passes to successive holders of the bill; Article 32 settles the competition when there are several holders and the funds are limited. Note that these rules concern bills payable on the same date, as the text states.
Because applying this order depends on the details and dates of each bill, it is advisable to consult a lawyer specializing in commercial cases and commercial papers when there is a dispute among holders.
Practical example
A merchant in Dammam issued three bills of exchange on one supplier, all falling due on the same day, and the funds held by the supplier are enough for only one. The first and second bills were drawn on the same date, and the second bears the drawee's acceptance, while the third was drawn after them. Under Article 32, the accepted bill is given priority over the first because they were drawn on the same date, and the third comes later because its drawing date is later.
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 32 of the Saudi Commercial Papers Law
If the drawee's funds are not enough for several bills of exchange, which is given priority?
The holder of the bill with the earliest drawing date, where the bills are payable on the same date.
What if the bills were drawn on the same date?
The bill bearing the drawee's acceptance is given priority; if none bears acceptance, the bill for whose payment the funds were allocated is given priority.
Where does a bill containing a "no acceptance" condition rank?
It comes last among the bills competing for the funds for payment.
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.