Article 48 of the Saudi Commercial Papers Law
المادة 48 من نظام الأوراق التجارية · الفرع الثالث: المعارضة في الوفاء
Article 48 limits opposition to payment of a bill of exchange to three cases: its loss, the bankruptcy of its holder, or an event affecting the holder's capacity.
Official text (Arabic)
This article has not been amended since the law was issued.
لا تجوز المعارضة في وفاء الكمبيالة إلا في حالة ضياعها أو تفليس حاملها أو حدوث ما يخل بأهليتها.
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 48 explained in plain English
Opposition to payment means objecting to the debtor paying the value of the bill to the person who presents it. Because a bill of exchange rests on rapid circulation and trust, Article 48 restricts opposition severely, so it is permitted in only three cases:
- Loss of the bill.
- Bankruptcy of its holder.
- An event affecting the capacity of the holder.
This means that for any other reason than these three cases the article does not allow opposition to payment. All three cases relate to the bill itself or to the person of its holder, not to the relationship for which the bill was drawn.
As for the case of loss, Article 49 explains how to claim payment on the strength of another copy or by an order from the body designated by the Minister of Commerce and Industry.
Anyone wishing to oppose payment of a bill of exchange would do well to consult a lawyer specializing in commercial cases and commercial papers to make sure one of the three cases is present.
Practical example
A merchant in Jeddah lost a bill of exchange due to him from a company in Riyadh. Under Article 48, he may oppose its payment because loss is one of the permitted cases. But another supplier who disagreed with the beneficiary over the quality of the goods finds no ground in this article for opposing payment of the bill.
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 48 of the Saudi Commercial Papers Law
When may payment of a bill of exchange be stopped?
Opposition to payment of a bill is permitted only in case of its loss, the bankruptcy of its holder, or an event affecting the holder's capacity.
May payment of a bill be objected to because of a commercial dispute?
Article 48 limits opposition to three cases, which are loss, the holder's bankruptcy, and an event affecting the holder's capacity; a commercial dispute is not one of them.
More articles on Payment of a Bill and Protest
- 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 11
Article 11 makes the drawer of a bill of exchange guarantee its acceptance and payment, and allows the drawer to stipulate exemption from guaranteeing acceptance but not payment.
يضمن صاحب الكمبيالة قبولها ووفاءها، ويجوز أن يشترط إعفاءه من ضمان القبول دون ضمان الوفاء.
- 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 20
Article 20 provides that an endorsement after the due date has the effects of an earlier endorsement, that one after protest for non-payment or after the protest deadline has the effects of an assignment of a right, and that backdating an endorsement is forgery.
التظهير اللاحق لميعاد الاستحقاق يرتب آثار التظهير السابق له، أما التظهير اللاحق لاحتجاج عدم الدفع أو الحاصل بعد انقضاء الميعاد المحدد لعمل هذا الاحتجاج فيرتب آث
- Article 24
Article 24 sets the form of acceptance of a bill of exchange, written on it with the word "accepted" or similar words and signed by the drawee, requires dating the acceptance in certain cases, and lets the holder record an undated acceptance by protest.
يكتب القبول على ذات الكمبيالة ويؤدى بلفظ (مقبول) أو بأية عبارة أخرى تفيد هذا المعنى ويوقعه المسحوب عليه، ويعتبر قبولا مجرد وضع المسحوب عليه توقيعه على صدر الكمب
- Article 27
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.
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 ملز
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.