Article 15 of the Saudi General Warehouses Law
المادة 15 من نظام الإيداع في المخازن العامة
The article allows the holder of the storage receipt, separated from the pledge document, to pay the secured debt before it falls due, and if payment is impossible or refused, to deposit it with a local bank, whereupon the goods are released.
Official text (Arabic)
This article has not been amended since the law was issued.
يجوز لحامل إيصال التخزين ـ منفصلا عن مستند الرهن ـ أن يدفع الدين المضمون بهذا المستند ولو قبل حلول ميعاد استحقاق الدين. وإذا تعذر الوفاء لحامل مستند الرهن أو رفض قبول الوفاء قبل حلول ميعاد الاستحقاق، كان لحامل إيصال التخزين إيداع الدين لدى أحد البنوك المحلية، ويترتب على هذا الإيداع الإفراج عن البضاعة.
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 15 explained in plain English
This article addresses the position of the holder of the storage receipt when the pledge document has been separated from it and is held by a secured creditor, and gives him a way to free the goods from the pledge:
- Early payment: the holder of the storage receipt may pay the debt secured by the pledge document even before its due date.
- If payment is impossible or refused: if payment to the holder of the pledge document is impossible, or he refuses to accept payment before the due date, the holder of the storage receipt may deposit the debt with a local bank.
- Effect of the deposit: this deposit results in the release of the goods.
The importance of this provision is that the holder of the pledge document cannot hold up delivery of the goods by refusing to accept his debt before its due date, and the holder of the receipt is not left in suspense if the creditor's whereabouts are unknown or he cannot be reached.
This article is linked to Article 14, which requires the endorsement of the pledge document separately to state the amount of the secured debt, its due date, and the creditor's name and address, since these details are how the holder of the receipt knows the amount of the debt and whom to pay. Article 16 then sets out the corresponding rule: if the debt is not paid on the due date, the holder of the pledge document may ask the Board of Grievances for permission to sell the pledged goods.
The article does not state the procedures for depositing with the bank or how it is proved. Anyone who needs to apply this provision in a particular case may consult a lawyer specializing in commercial matters or finance.
Practical example
Saad bought stored goods by endorsement of the storage receipt to him, and the pledge document had been endorsed to a creditor for a debt due in six months. Saad wanted to take delivery of the goods now and offered to pay the debt, but the creditor refused to accept it before its due date. Under this article Saad may deposit the amount of the debt with a local bank, and the goods are released as a result.
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 15 of the Saudi General Warehouses Law
Can the debt secured by a pledge document be paid before its due date?
Yes. The holder of the storage receipt, separated from the pledge document, may pay the secured debt even before its due date.
What do I do if the creditor refuses to accept the debt before its due date?
If payment to the holder of the pledge document is impossible or he refuses to accept it before the due date, the holder of the storage receipt may deposit the debt with a local bank, and the goods are released as a result.
More articles on Loans Secured by Pledged Goods
- Article 5
The article allows the general warehouse to provide loans secured by a pledge of the goods kept with it, and to deal in the pledge documents representing them after the pledgor's consent.
يجوز للمخزن العام أن يقدم قروضا مكفولة برهن البضاعة المحفوظة لديه، وأن يتعامل بمستندات الرهن التي تمثلها بعد موافقة الراهن.
- Article 16
The article allows the holder of the pledge document, separated from the storage receipt, to ask the Board of Grievances for permission to sell the pledged goods if the debt is not paid when due; the Board determines the method of sale and notifies the warehouse keeper and the owner of the receipt.
إذا لم يدفع الدين في ميعاد الاستحقاق جاز لحامل مستند الرهن ـ منفصلا عن إيصال التخزين ـ أن يطلب من ديوان المظالم الإذن له في بيع البضاعة المرهونة، ويحدد الديوان
- Article 17
The secured creditor satisfies his right from the price of the goods in priority over all creditors after deducting taxes, fees and the expenses of sale, storage and keeping, and any surplus is deposited in a bank if the receipt holder is absent.
يستوفي الدائن المرتهن حقه من ثمن البضاعة بالامتياز على جميع الدائنين بعد خصم المبالغ التالية : أ- الضرائب والرسوم المستحقة على البضاعة. ب- مصروفات بيع البضاعة و
- Article 18
The holder of the pledge document may have recourse against the debtor or endorsers after the goods are sold and their price proves insufficient, within 10 days of the sale; recourse against endorsers lapses if enforcement is not started within 30 days.
لا يجوز لحامل مستند الرهن الرجوع على المدين الراهن أو المظهرين إلا بعد بيع البضاعة المرهونة وعدم كفاية ثمنها للوفاء بالدين وأن يكون ذلك خلال عشرة أيام من تاريخ
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.