Article 61 of the Saudi Commercial Papers Law

المادة 61 من نظام الأوراق التجارية · الفرع الرابع: الامتناع عن الوفاء. أولاً: الاحتجاج

Article 61 allows a person who paid a bill of exchange to claim from his or her guarantors the whole amount paid and the expenses incurred.

Official text (Arabic)

This article has not been amended since the law was issued.

يجوز لمن وفى بكمبيالة أن يطالب ضامنيه بما يأتي:

أ - كل المبلغ الذي وفاه.

ب - المصروفات التي تحملها.

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 61 explained in plain English

When the holder has recourse against one of the persons bound on the bill and that person pays, the payer does not bear the amount finally; Article 61 gives him or her the right to have recourse against his or her guarantors, that is, those liable to him or her under the bill, for:

The whole amount paid.
The expenses incurred.

In this way the claim passes along the chain of signatories until it settles on whoever must ultimately bear the debt. If the last endorser pays the holder, he or she has recourse against those who preceded him or her among the guarantors, and so on.

This article differs from Article 60, which explains what the holder claims, namely the principal amount of the bill not accepted or not paid and the expenses of the protest, notices and others, less the official discount rate on recourse before maturity; Article 61 concerns the person who paid the bill, who claims everything he or she actually paid and the expenses incurred.

Article 62 complements this by giving the obligor who pays the right to receive the bill with the protest document and a receipt for what he or she paid, and the paying endorser may strike out his or her endorsement and the later endorsements, enabling him or her to have recourse against others.

To determine against whom recourse may be had in the chain of signatories, it is advisable to consult a lawyer specializing in commercial cases and commercial papers.

Practical example

A company in Jeddah endorsed a bill of exchange to a supplier, and the drawee did not pay it when due, so the supplier had recourse against the company, which paid him SAR 80,000 and bore SAR 1,500 in expenses. Under Article 61, the company may claim from its guarantors, such as the drawer, the SAR 80,000 it paid and the expenses it incurred.

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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