Article 58 of the Saudi Commercial Papers Law
المادة 58 من نظام الأوراق التجارية · الفرع الرابع: الامتناع عن الوفاء. أولاً: الاحتجاج
Article 58 makes the drawer, acceptor, endorser and surety of a bill jointly and severally liable to its holder, who may claim against them individually or together in no particular order.
Official text (Arabic)
This article has not been amended since the law was issued.
ساحب الكمبيالة وقابلها ومظهرها وضامنها الاحتياطي مسئولون جميعا بالتضامن نحو حاملها، وللحامل مطالبتهم منفردين أو مجتمعين دون مراعاة أي ترتيب، ويثبت هذه الحق لكل موقع على كمبيالة وفى بقيمتها تجاه المسئولين نحوه.
والدعوى المقامة على أحد الملتزمين لا تحول دون مطالبة الباقين ولو كان التزامهم لاحقا لمن وجهت إليه الدعوى ابتداء.
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 58 explained in plain English
Article 58 sets out a basic rule that gives the bill of exchange its strength in circulation, namely joint and several liability among all who signed it:
- Who is liable: the drawer of the bill, its acceptor, its endorser and its surety.
- The nature of the liability: they are all jointly and severally liable to the holder.
- Freedom of choice: the holder may claim against them individually or together, without being bound by any order.
- The right of the one who pays: every signatory who paid the value of the bill has the same right against those liable to him or her.
- Multiple actions: an action brought against one of the obligors does not prevent claiming against the others, even if their obligation comes after that of the one the action was first directed against.
In practice this means the holder is not obliged to begin with the drawer or any other signatory, but chooses the one he or she considers best able to pay. This article is linked to Article 59, which explains when the holder may have recourse against the drawer, endorsers and others, whether on non-payment at the due date or before it in specified cases. It is also linked to Article 57, which permits a "recourse without expenses" or "without protest" clause.
To choose the most suitable way to claim in a particular case, it is advisable to consult a lawyer specializing in commercial cases and commercial papers.
Practical example
A supplier holds a bill of exchange for SAR 120,000 drawn by a company in Dammam and accepted by the drawee, endorsed by two persons before it reached him, and not paid when due. Under Article 58, the supplier may claim against the second endorser alone, or against all of them together. And if he first brings an action against the drawer, that does not prevent him from claiming against the endorsers afterward.
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 58 of the Saudi Commercial Papers Law
Can all the signatories of a bill of exchange be claimed against together?
Yes, the drawer, acceptor, endorser and surety are jointly and severally liable, and the holder may claim against them individually or together in no particular order.
Must I begin by claiming against the drawer?
No, the holder may claim against any of them in no particular order.
If I bring an action against one of them, do I lose my right to claim against the others?
No, an action brought against one of the obligors does not prevent claiming against the others, even if their obligation comes after that of the one the action was first directed against.
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.