Article 55 of the Saudi Commercial Papers Law
المادة 55 من نظام الأوراق التجارية · الفرع الرابع: الامتناع عن الوفاء. أولاً: الاحتجاج
Article 55 sets the deadlines for protests for non-acceptance and non-payment, the effect of a protest for non-acceptance, and the cases of the drawee's suspension of payment or bankruptcy.
Official text (Arabic)
This article has not been amended since the law was issued.
يجب عمل احتجاج عدم القبول في المواعيد المحددة لتقديم الكمبيالة للقبول.
فإذا وقع التقديم الأول للقبول وفقا للمادة 23 في اليوم الأخير من الميعاد المحدد للتقديم جاز عمل الاحتجاج في اليوم التالي. ويجب عمل احتجاج عدم الوفاء عن الكمبيالة المستحق وفاؤها في يوم معين أو بعد مدة من تاريخها أو من تاريخ الاطلاع عليها في أحد يومي العرض التاليين ليوم استحقاقها. وإذا كانت الكمبيالة مستحقة الوفاء لدى الاطلاع وجب عمل احتجاج عدم الوفاء وفقا للشروط المبينة في الفقرة السابقة بشأن احتجاج عدم القبول.
ويغني (بروتستو) عدم القبول عن تقديم الكمبيالة للوفاء وعن عمل احتجاج عدم الوفاء.
وفي حالة توقف المسحوب عليه عن الوفاء سواء كان قابلا للكمبيالة أو غير قابل، وفي حالة توقيع حجز غير مجد على أمواله لا يجوز لحامل الكمبيالة الرجوع على ضامنيه إلا بعد تقديم الكمبيالة للمسحوب عليه لوفائها وبعد عمل احتجاج عدم الوفاء.
وفي حالة إفلاس المسحوب عليه سواء كان قابلا للكمبيالة أو غير قابل، وفي حالة إفلاس ساحب الكمبيالة المشروط عدم تقديمها للقبول يكون تقديم حكم الإفلاس كافيا بذاته لتمكين الحامل من استعمال حقوقه في الرجوع على الضامنين.
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 55 explained in plain English
After Article 54 required a protest to be made, Article 55 sets its deadlines and some of its effects:
- Protest for non-acceptance: it is made within the periods set for presenting the bill for acceptance. If the first presentment for acceptance under Article 23 took place on the last day of the period for presentment, the protest may be made on the following day.
- Protest for non-payment: for a bill payable on a specified day or at a period after its date or after sight, it is made on one of the two days of presentment following the due date. For a bill payable at sight, the protest for non-payment is made under the conditions set for the protest for non-acceptance.
- Effect of a protest for non-acceptance: it replaces presenting the bill for payment and making a protest for non-payment.
- Drawee's suspension of payment or fruitless attachment: the holder may not have recourse against the guarantors until the bill has been presented to the drawee and a protest for non-payment made, whether or not the drawee accepted it.
- Bankruptcy: if the drawee goes bankrupt, whether or not he or she accepted, or the drawer goes bankrupt where the bill was stipulated not to be presented for acceptance, presenting the bankruptcy judgment is enough to enable the holder to have recourse against the guarantors.
The deadlines here are short and precisely set. Article 56 regulates notifying the drawer and endorsers of non-acceptance or non-payment.
Because missing these deadlines may harm the holder, it is advisable to consult a lawyer specializing in commercial cases and commercial papers as soon as acceptance or payment is refused.
Practical example
Faisal holds a bill of exchange due on a specified day from a company in Jeddah, and on the due date the company refused to pay. Under Article 55, he must make a protest for non-payment on one of the two days of presentment following the due date. And if the company had gone bankrupt and a bankruptcy judgment had been issued, presenting the judgment would be enough for him to have recourse against the guarantors.
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 55 of the Saudi Commercial Papers Law
When must a protest for non-payment of a bill of exchange be made?
For a bill payable on a specified day or at a period after its date or after sight, it is made on one of the two days of presentment following its due date.
Do I need a protest for non-payment if I made a protest for non-acceptance?
No, a protest for non-acceptance replaces presenting the bill for payment and making a protest for non-payment.
What if the drawee goes bankrupt?
Presenting the bankruptcy judgment is in itself enough to enable the holder to exercise his or her rights of recourse against the guarantors.
Articles this article refers to
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.