Article 11 of the Saudi General Warehouses Law
المادة 11 من نظام الإيداع في المخازن العامة
The article allows fungible goods to be replaced with goods of the same nature, type and quality if the storage receipt and pledge document so provide, with the rights passing to the new goods, and the documents to be issued for part of a bulk quantity.
Official text (Arabic)
This article has not been amended since the law was issued.
إذا كانت البضاعة المسلم عنها إيصال التخزين ومستند الرهن مثلية جاز أن تستبدل بها بضاعة من طبيعتها ونوعها وصفتها، متى كان منصوصا على ذلك في إيصال التخزين ومستند الرهن . وفي هذه الحالة تنتقل جميع حقوق حامل الإيصال و المستند وامتيازاتهما إلى البضاعة الجديدة. ويجوز أن يصدر إيصال التخزين ومستند الرهن عن كمية البضاعة المثلية السائبة في كمية أكبر.
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 11 explained in plain English
This article concerns fungible goods, meaning goods whose units are interchangeable, such as grain, sugar and fuel of a single type. It contains two rulings:
First ruling: replacement is permitted
If the goods for which the storage receipt and pledge document were issued are fungible, they may be replaced with goods of the same nature, type and quality, but on condition that this is provided for in the storage receipt and pledge document. If it is not provided for, replacement is not permitted under this ruling.
On replacement, all the rights and privileges of the holder of the receipt and document pass to the new goods, so their holder is not harmed by the replacement.
Second ruling: bulk goods
The storage receipt and pledge document may be issued for a quantity of fungible goods in bulk within a larger quantity, that is, for a specified portion of a mixed stock that is not separated out.
The two documents referred to are those the depositor receives under Article 10, which provides that the depositor receives the storage receipt with a pledge document containing all its details, and that the warehouse keeps a true copy of both. Article 12 then allows the two documents to be issued in the depositor's name or to his order, and regulates their endorsement to others.
How the replacement condition is worded in the two documents matters to the depositor and the warehouse keeper alike, and anyone who needs to review it may consult a lawyer specializing in commercial matters.
Practical example
A merchant in Jeddah deposited 500 tons of wheat in a general warehouse that keeps wheat of the same type for several merchants in a single silo. Under this article a storage receipt and a pledge document may be issued to him for his quantity within the larger quantity. If the two documents provide that replacement is permitted, wheat of the same nature, type and quality may be delivered to him, and his rights pass to this new stock.
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 11 of the Saudi General Warehouses Law
May the warehouse replace my goods with similar ones?
It may if the goods are fungible, the replacement is with goods of the same nature, type and quality, and it is provided for in the storage receipt and pledge document.
What happens to the receipt holder's rights when the goods are replaced?
All the rights and privileges of the holder of the receipt and document pass to the new goods.
Can a storage receipt be issued for part of a mixed quantity?
Yes. The storage receipt and pledge document may be issued for a quantity of fungible bulk goods within a larger quantity.
More articles on Storage Receipt and Pledge Document
- Article 2
The article defines the Law's key terms: the general warehouse, deposit in warehouses, the storage receipt and the pledge document.
يقصد بالألفاظ والعبارات الآتية ـ أينما وردت في هذا النظام ـ المعاني المبينة أمامها ما لم يقتض السياق خلاف ذلك : المخزن العام : هو المكان الذي يخصصه الخازن لإيدا
- Article 10
The article provides that the depositor receives from the general warehouse the storage receipt with a pledge document containing all its details, and the warehouse keeps a true copy of both.
يتسلم المودع من المخزن العام إيصال التخزين الذي يرافقه مستند رهن يشتمل على جميع البيانات المدونة في إيصال التخزين ، ويحتفظ المخزن العام بصورة مطابقة للأصل من إي
- Article 12
The article allows the storage receipt and pledge document to be issued in the depositor's name or to his order, allows the endorsement of either or both to others, and requires the endorsement to be recorded with the warehouse keeper immediately.
يجوز أن يصدر إيصال التخزين ومستند الرهن باسم المودع أو لأمره. وإذا كان إيصال التخزين ومستند الرهن لأمر المودع جاز له أن يظهرهما للغير أحدهما أو كليهما. وعلى الم
- Article 19
The article provides that if the goods suffer a defect or damage covered by an insurance policy, the holder of the storage receipt or pledge document has over the insurance amount the rights and privilege he had over the goods.
إذا وقع للبضاعة عيب أو تلف تغطيه وثيقة التأمين، يكون لحامل إيصال التخزين أو مستند الرهن على مبلغ التأمين ما له من حقوق وامتياز على البضاعة.
- Article 20
A person who loses the storage receipt may ask the Board of Grievances for an order to deliver a copy of it, and a person who loses the pledge document may ask for an order to pay the debt that has fallen due, with proof of ownership and a guarantor or sufficient security.
يجوز لحامل إيصال التخزين عند ضياعه أو تلفه أن يطلب من ديوان المظالم إصدار أمر إلى المخزن العام بتسليمه صورة من إيصال التخزين ، على أن يثبت ملكيته لإيصال التخزين
- Article 21
The guarantee provided when a storage receipt or endorsed pledge document is lost expires one year after the Board of Grievances issues the order to deliver a copy of the receipt or to pay the debt that has fallen due.
ينقضي الضمان الذي يقدم في حالة ضياع إيصال التخزين أو مستند الرهن المظهر بانقضاء سنة من تاريخ إصدار ديوان المظالم أمر تسليم صورة إيصال التخزين أو استصدار أمر وفا
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.