Article 68 of the Saudi Commercial Papers Law
المادة 68 من نظام الأوراق التجارية · الفصل السابع: التدخل في القبول أو في الوفاء
The Article allows naming someone to accept or pay a bill if needed, and acceptance or payment by intervention for any debtor exposed to recourse; the intervenor must give notice within two working days.
Official text (Arabic)
This article has not been amended since the law was issued.
لصاحب الكمبيالة ومظهرها وضامنها الاحتياطي أن يعين من يقبلها أو يدفعها عند الاقتضاء.
ويجوز قبول الكمبيالة أو وفاؤها من أي شخص متدخل لمصلحة أي مدين بها يكون مستهدفا للرجوع عليه.
ويجوز أن يكون التدخل من الغير، كما يجوز أن يكون المسحوب عليه أو أي شخص ملتزم بموجب الكمبيالة عدا القابل.
ويجب على المتدخل أن يخطر من وقع التدخل لمصلحته خلال يومي العمل التاليين وإلا كان مسئولا عند الاقتضاء عن تعويض ما يترتب على أعماله من ضرر بشرط ألا يجاوز التعويض مبلغ الكمبيالة.
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 68 explained in plain English
This Article lays the foundation for the rules on intervention in acceptance or payment: a person accepts or pays the bill of exchange for the benefit of one of the debtors on it who is exposed to recourse.
- Advance designation: the drawer of the bill, an endorser or a guarantor by aval may designate someone to accept or pay it if needed.
- For whose benefit intervention is made: the bill may be accepted or paid by any intervening person for the benefit of any debtor on it who is exposed to recourse.
- Who may intervene: the intervenor may be a third party, the drawee, or any person liable under the bill, other than the acceptor.
- Duty to give notice: the intervenor must notify the person for whose benefit the intervention was made within the following two working days; otherwise, where applicable, the intervenor is liable for compensation for any damage resulting from their acts, provided that the compensation does not exceed the amount of the bill.
Article 69 explains when acceptance by intervention takes place: in all cases where the holder of a bill that may be presented for acceptance has a right of recourse before its due date. If the bill names a person to accept it or pay its value if needed at its place of payment, the holder may not exercise recourse before maturity against the person who made that designation or against subsequent signatories, unless the holder presented the bill to the designated person, who refused to accept it, and the holder proved that refusal by protest. In other cases, the holder may refuse acceptance by intervention.
To understand the effect of intervention on your rights and obligations on a particular bill, it is advisable to consult a lawyer who specializes in commercial matters and commercial papers.
Practical example
A company in Riyadh endorsed a bill of exchange to a supplier and feared that the drawee might refuse to accept it, leaving the company exposed to recourse. It therefore named one of its business partners on the bill to accept or pay it if needed. If this partner does intervene, he must notify the company within the following two working days; otherwise, where applicable, he is liable for compensation for any resulting damage, up to the amount 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 68 of the Saudi Commercial Papers Law
What does intervention in the payment of a bill of exchange mean?
It means that a person accepts or pays the bill for the benefit of any debtor on it who is exposed to recourse. The intervenor may be a third party, the drawee or anyone liable on the bill other than the acceptor.
Who may designate someone to pay the bill if needed?
The drawer of the bill, an endorser or a guarantor by aval may designate someone to accept or pay it if needed.
What happens if the intervenor does not notify the person for whom they intervened?
Where applicable, the intervenor is liable for compensation for any damage resulting from their acts, provided that the compensation does not exceed the amount of the bill.
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.