Article 75 of the Saudi Commercial Papers Law
المادة 75 من نظام الأوراق التجارية · الفصل السابع: التدخل في القبول أو في الوفاء
The Article requires payment by intervention to be evidenced by a receipt on the bill naming the person for whom it is made, failing which it is treated as made for the drawer, with the bill and protest handed to the payer.
Official text (Arabic)
This article has not been amended since the law was issued.
يجب إثبات الوفاء بالتدخل بكتابة مخالصة على الكمبيالة يذكر فيها من حصل الوفاء لمصلحته، فإذا خلت المخالصة من هذا البيان اعتبر الوفاء بالتدخل حاصلا لمصلحته الساحب، ويجب أن تسلم الكمبيالة والاحتجاج إن عمل للموفي بالتدخل.
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 75 explained in plain English
This Article sets out how payment by intervention is evidenced and what the person paying by intervention receives.
- Receipt on the bill: payment by intervention must be evidenced by a receipt written on the bill.
- Naming the beneficiary: the receipt states the person for whose benefit the payment was made. If the receipt omits this, payment by intervention is considered made for the benefit of the drawer.
- Handing over the documents: the bill, and the protest if one was made, must be handed to the person who paid by intervention.
The importance of identifying the person for whom payment was made appears in Article 76: the person paying by intervention acquires all the rights arising from the bill against the person for whose benefit payment was made and against those liable to the latter under the bill, and the endorsers subsequent to the person for whose benefit payment was made are discharged. The name stated in the receipt therefore determines against whom the payer has recourse and who is discharged, and receiving the bill and the protest allows the payer to exercise these rights.
It is also linked to Article 74, under which a holder who refuses payment by intervention loses the right of recourse against those who would have been discharged by that payment.
Anyone paying by intervention should therefore make sure the name of the person for whom they are paying is written in the receipt. To review the wording in a particular case, you may consult a lawyer who specializes in commercial matters and commercial papers.
Practical example
Majed paid the value of a bill by intervention for the benefit of one of its endorsers. The holder wrote on the bill a receipt stating that payment was made for the benefit of that endorser, and then handed Majed the bill and the protest. Had the receipt not named the endorser, the payment would have been considered made for the benefit of the drawer.
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 75 of the Saudi Commercial Papers Law
How is payment by intervention evidenced?
By a receipt written on the bill stating the person for whose benefit the payment was made.
What is the rule if the receipt does not state for whom payment was made?
Payment by intervention is then considered made for the benefit of the drawer.
Does the person who pays by intervention receive the bill?
Yes. The bill, and the protest if one was made, must be handed to the person who paid by intervention.
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.