Article 57 of the Saudi Commercial Papers Law
المادة 57 من نظام الأوراق التجارية · الفرع الرابع: الامتناع عن الوفاء. أولاً: الاحتجاج
Article 57 allows the drawer or an endorser to relieve the holder of making a protest by a "recourse without expenses" or "without protest" clause, and sets the scope of its effect and who bears protest expenses.
Official text (Arabic)
This article has not been amended since the law was issued.
يجوز للساحب ولأي مظهر احتياطي أن يعفي حامل الكمبيالة من عمل احتجاج عدم القبول أو عدم الوفاء عند مباشرة حقه في الرجوع إذا ضمن الكمبيالة وذيل بتوقيعه شرط (الرجوع بلا مصروفات) أو ( بدون احتجاج) أو أية عبارة أخرى تفيد عن هذا المعنى.
ولا يعفي هذا الشرط الحامل من تقديم الكمبيالة في المواعيد المقررة ولا من عمل الإخطارات اللازمة، وعلى من يتمسك قبل الحامل بعدم مراعاة هذه المواعيد إثبات ذلك.
وإذا كتب الساحب هذا الشرط سرت آثاره على كل الموقعين، أما إذا كتبه أحد المظهرين أو أحد الضامنين الاحتياطيين سرت آثاره عليه وحده. وإذا كان الساحب هو الذي وضع الشرط وعمل الحامل احتجاجا رغم ذلك تحمل وحده المصروفات، أما إذا كان الشرط صادرا من مظهر أو من ضامن احتياطي فإنه يجوز الرجوع على جميع الموقعين بمصروفات الاحتجاج إن عمل.
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 57 explained in plain English
The rule is that a protest must be made to prove refusal of acceptance or payment, but Article 57 allows the holder to be relieved of it by a special clause:
- Who adds the clause and how: the first paragraph mentions the drawer and "any guarantor endorser," and the third paragraph mentions the drawer, endorsers and sureties. The clause is written as "recourse without expenses" or "without protest" or words with that meaning, and signed beneath.
- Limits of the relief: the clause does not relieve the holder of presenting the bill within the prescribed periods or of giving the necessary notices. Whoever relies against the holder on non-observance of these periods must prove it.
- Scope of effect: if the drawer wrote the clause, its effects apply to all signatories; if an endorser or a surety wrote it, it applies to him or her alone.
- Protest expenses: if the drawer put in the clause and the holder nevertheless made a protest, the holder alone bears the expenses. If the clause came from an endorser or a surety, recourse may be had against all signatories for the expenses of the protest if it was made.
This article is linked to Article 56, which requires the holder to notify the drawer and the person who endorsed the bill to him or her within four working days, and mentions the rule for a bill containing a "recourse without expenses" or "without protest" clause.
To know the effect of the clause on a particular bill according to who put it in, it is advisable to consult a lawyer specializing in commercial cases and commercial papers.
Practical example
The drawer of a bill of exchange in Riyadh wrote on it "without protest" and signed beneath. The drawee refused to pay, and the holder did not make a protest, but presented the bill within its period and sent the necessary notices. Under Article 57, the clause applies to all signatories because the drawer wrote it, and had the holder made a protest nevertheless, he alone would have borne its expenses.
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 57 of the Saudi Commercial Papers Law
What does a "without protest" clause on a bill of exchange mean?
It is a clause relieving the holder of making a protest for non-acceptance or non-payment when exercising the right of recourse, written as "recourse without expenses" or "without protest" or words with that meaning, and signed.
Does the clause relieve me of presenting the bill and giving notice?
No, the clause does not relieve the holder of presenting the bill within the prescribed periods or of giving the necessary notices.
Who bears protest expenses if I made the protest despite the clause?
If the drawer put in the clause, the holder alone bears the expenses; if it came from an endorser or surety, recourse may be had against all signatories for 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.