Article 14 of the Saudi General Warehouses Law
المادة 14 من نظام الإيداع في المخازن العامة
The article requires the endorsement of the storage receipt and pledge document to be dated, and the separate endorsement of the pledge document to include the debt details, creditor and endorser's signature, and to be recorded in the warehouse's books.
Official text (Arabic)
This article has not been amended since the law was issued.
يجب أن يكون تظهير إيصال التخزين ومستند الرهن مؤرخا، وإذا ظهر مستند الرهن منفصلا عن إيصال التخزين وجب أن يشمل التظهير فضلا عن تاريخه بيان مبلغ الدين المضمون وتاريخ استحقاقه واسم الدائن وعنوانه وتوقيع المظهر. وعلى المظهر إليه ـ دون إبطاء ـ أن يطلب قيد تظهير مستند الرهن والبيانات المتعلقة بالتظهير في دفاتر المخزن ويؤشر بذلك على مستند الرهن .
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 14 explained in plain English
This article sets out the required form of endorsement, whose effects Article 13 describes:
First: a general condition for every endorsement
The endorsement of the storage receipt and pledge document must be dated.
Second: additional details when the pledge document is endorsed separately
If the pledge document is endorsed separately from the storage receipt, the endorsement must include, in addition to its date:
- a statement of the amount of the secured debt,
- and its due date,
- and the creditor's name and address,
- and the endorser's signature.
Third: recording in the warehouse's books
The endorsee must, without delay, ask for the endorsement of the pledge document and the details relating to the endorsement to be recorded in the warehouse's books, and for a note of this to be made on the pledge document.
The purpose of these details is that everyone dealing in the goods knows the size of the debt secured by them, when it falls due, and who the creditor is. Their importance is clear from Article 13, which provides that ownership of the goods passes to the person to whom the storage receipt was endorsed subject to the pledge if the pledge document was endorsed to another person, and that he must pay the secured debt or enable the secured creditor to satisfy his right on the due date.
It is followed by Article 15, which allows the holder of the storage receipt to pay the debt secured by the pledge document even before its due date. Whoever receives a pledge document by endorsement is best advised to check that these details are complete and recorded, and may consult a lawyer specializing in commercial matters or finance.
Practical example
A bank lent a merchant in Dammam money secured by his stored goods, and the merchant endorsed the pledge document to it separately from the storage receipt. Under this article the endorsement must be dated and include the amount of the debt, its due date, the bank's name and address and the merchant's signature, and the bank must, without delay, ask for the endorsement and its details to be recorded in the warehouse's books and for a note of this to be made on the pledge document.
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 14 of the Saudi General Warehouses Law
What details are required when endorsing a pledge document?
If it is endorsed separately from the storage receipt, the endorsement must include its date, the amount of the secured debt, its due date, the creditor's name and address, and the endorser's signature.
Must the endorsement of a storage receipt be dated?
Yes. The endorsement of the storage receipt and pledge document must be dated.
Who asks for the endorsement of a pledge document to be recorded in the warehouse's books?
The endorsee must, without delay, ask for the endorsement and its details to be recorded in the warehouse's books and for a note of this to be made on the pledge document.
More articles on Endorsing the Storage Receipt and Pledge Document
- 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 13
The article states that endorsing the pledge document separately creates a pledge over the goods, endorsing the storage receipt transfers their ownership, and where the pledge document was endorsed to someone else, ownership passes subject to the pledge.
يترتب على تظهير مستند الرهن ـ منفصلا عن إيصال التخزين ـ تقرير رهن على البضاعة لمصلحة المظهر إليه. ويترتب على تظهير إيصال التخزين انتقال ملكية البضاعة إلى المظهر
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.