Article 39 of the Saudi Commercial Pledge Law
المادة 39 من نظام الرهن التجاري · الفصل التاسع: أحكام خاصة برهن بعض الأموال
The article subjects the pledge of ships, aircraft, commercial and financial papers, shares, deposited goods and trademarks to their own special laws, with the Commercial Pledge Law applying where they are silent.
Official text after amendments (Arabic)
Compiled from the original text and every officially published amendment; the amendments are shown in full below for comparison.
1- يخضع رهن السفن، والطائرات، والأوراق التجارية، والأوراق المالية المتداولة في السوق المالية، وأسهم الشركات غير المتداولة في السوق المالية، والبضائع المودعة في المخازن العامة، والعلامات التجارية، وغيرها من الأموال التي يخضع رهنها لأحكام أنظمة خاصة بها؛ للأحكام المقررة لها في تلك الأنظمة، وتسري أحكام هذا النظام فيما لم يرد به نص فيها.
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 39 explained in plain English
This article defines the relationship between the Commercial Pledge Law and the special laws that regulate the pledge of certain kinds of assets. The rule is that the special law takes precedence, and the Commercial Pledge Law supplements it on what it is silent about.
The assets subject to their special laws, according to the text:
- Ships and aircraft.
- Commercial papers.
- Financial securities traded in the capital market.
- Shares of companies not traded in the capital market.
- Goods deposited in public warehouses.
- Trademarks.
- Other assets whose pledge is subject to provisions of laws specific to them.
What does this mean? When pledging any of these assets, one must first refer to the special law governing them and apply what it provides. If that law has no provision on a particular issue, the provisions of the Commercial Pledge Law apply to it. The article does not name these special laws or state their provisions.
The article appears in Chapter 9 on the provisions for pledging certain assets, after Article 38, which permits pledging all movable assets or a class of them. Paragraph (2) of this article was deleted by Royal Decree No. M/94 dated 15/8/1441 AH, leaving it with one paragraph. To know which law applies to the pledge of a particular asset, it is advisable to consult a lawyer specialized in commercial matters or in banking and securities.
Practical example
A company in Jeddah wants to pledge its trademark to a bank in exchange for financing. The provisions of the special trademark law apply to this pledge first, and any pledge issues it does not address are governed by the provisions of the Commercial Pledge Law.
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 39 of the Saudi Commercial Pledge Law
Does the Commercial Pledge Law apply to a pledge of shares?
The pledge of securities traded in the capital market and of shares of companies not traded in it is subject to their own special laws, and the Commercial Pledge Law applies where they are silent.
Which law governs the pledge of ships and aircraft?
They are subject to the provisions set for them in their own special laws, with the Commercial Pledge Law applying where those laws are silent.
Has this article been amended?
Yes. Paragraph (2) was deleted by Royal Decree No. M/94 dated 15/8/1441 AH.
Amendment history
Royal Decree No. M/94 — 15/8/1441 AH
Official amendment text (Arabic)
- حُذفت الفقرة (2) من هذه المادة وذلك بموجب المرسوم الملكي رقم (م/94) وتاريخ 1441/8/15هـ.
Original text before the amendments (Arabic)
1- يخضع رهن السفن، والطائرات، والأوراق التجارية، والأوراق المالية المتداولة في السوق المالية، وأسهم الشركات غير المتداولة في السوق المالية، والبضائع المودعة في المخازن العامة، والعلامات التجارية، وغيرها من الأموال التي يخضع رهنها لأحكام أنظمة خاصة بها؛ للأحكام المقررة لها في تلك الأنظمة، وتسري أحكام هذا النظام فيما لم يرد به نص فيها.
2- تزود الجهات -التي تتولى تسجيل الرهون على الأموال المذكورة في الفقرة (1) من هذه المادة- السجلَّ ببيانات تسجيل تلك الرهون، وتنسق الوزارة مع الجهات المعنية لتحديد آلية تضمن ذلك.
More articles on Pledge of Accounts and Securities
- Article 36Amended by M/94
The article lets the financial institution deduct from the account its obligations that fell due and predate the pledge, and bars the pledgor from withdrawing or transferring from the pledged account unless otherwise agreed.
2- يجوز للمنشأة المالية خصم الالتزامات المالية المدينة الناشئة قبل انعقاد الرهن على الحساب، وذلك عند حلول أجلها. 3- لا يحق للراهن السحب من الحساب المرهون والتحو
- Article 38Amended (1411 AH)
The article permits pledging all of the pledgor's movable assets, a part or class of them, or an adequately described asset, and states when enforcement may take place and the pledgor's right to dispose of the assets before default.
1- يجوز رهن جميع الأموال المنقولة المملوكة للراهن أو جزء منها أو فئة منها، ويجوز كذلك رهن أي مال منقول موصوف وصفً عاماً وكافياً لتعيينه 2- يكون التنفيذ على الره
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.