Modern economic and commercial developments have led to an increase in the complexity of financial and commercial operations, making the need for more advanced and secure means of organizing these financial relationships a vital matter. In this context, the bill of exchange stands out as one of the basic financial documents that is used in financial and commercial transactions to achieve trust and facilitate financial exchange operations between… Individuals and companies. Dealing with this paper is governed and regulated by the Commercial Papers System in the Kingdom.
The bill of exchange in the Saudi system
The bill of exchange is an extremely important document, as it is considered the basis on which individuals rely in their financial transactions so that all parties are reassured and each individual is guaranteed his full right without delay or procrastination in payment. For this reason, the Saudi system has adopted it and the bill of exchange has become one of the official papers that is relied upon. The creditor must recover his financial dues mentioned in the bill of exchange.
Types of bills of exchange in Saudi Arabia
There are two types of bill of exchanges : endorsable and non-endorsable.
Endorsable is a bill of exchange in which “to order” is not explicitly mentioned, or if it is explicitly mentioned
The non-endorsable is the bill of exchange on which it is written I would love it “Not to order” or a similar phrase.
The conditions of the bill of exchange and its main data
There are some conditions that must be met in the bill of exchange as stipulated by the Saudi regime, and these conditions are as follows:
- The bill of exchange must contain the word “Bill of exchange” in the title of the bond .
- Write an order that is not pending on the condition of the fulfillment of a certain amount of money .
- The name of the person who needs to fulfill the bill of exchange (drawn on it ).
- Maturity date .
- Place of fulfillment .
- Name of the beneficiary .
- Date and place of creation of the bill of exchange .
- The signature of the drawer .
- The bill of exchange must be written in writing .
Conditions for endorsing a bill of exchange
The endorsement is written on the bill of exchange itself or on another piece of paper related to the bill of exchange and must be signed by the endorser. It is also not required that the name of the endorsee be written in the endorsement. It is permissible to suffice with the signature of the endorser only.
However, if the endorsement is made in blank, the bearer may begin recording the information by writing his name or the name of another person, or he may present the bill of exchange again in blank, or he may deliver it to another person, to another person, without filling in the blank.
As for the conditions, the endorsement must be free of every condition, and every condition on which the endorsement is attached is considered as if it did not exist.
When does a bill of exchange expire in the Saudi system?
Many merchants may be forced to take on financial debts to continue their business, so most merchants register these debts in the form of securities known as bill of exchanges. In order for the Saudi system to accept these bill of exchanges, it has set specific conditions for them, and as such, some bill of exchange may be forfeited and condemned. Invalidation in some cases, namely:
- If the subject of the bill of exchange violates the public order of the Kingdom, it shall cancel it.
- If it is confirmed that there is one of the reasons for invalidating consent, such as error, coercion, deception, and fraud, then in this case the bill of exchange shall be void.
- If the person carrying out the antiquities is a minor who is permitted to trade, or is prohibited from doing so for any reason.
- If Al-Sahel is incapacitated or has not reached the legal age in the Kingdom, which is 18 years, as Saudi law does not allow those under the legal name to undertake commercial work.
Forging a bill of exchange
Article 9 stipulates that if the bill of exchange contains more than one signature, whether it is forged or issued by a minor or incompetent person, then the obligation resulting from her signature on the bill is considered valid.
Penalty for non-payment of the bill of exchange in the Saudi system
If the bill of exchange is not accepted, its owner must go to the Chamber of Commerce to object to its non-acceptance. By doing so, he is forced to make his name public, thus causing damage to his commercial position.
However, if you put this sentence: “The holder of the paper has the right to return it without expenses or protest,” then he goes directly to the enforcement court and does not have to go to the Chamber of Commerce.
In this case, the Execution Court takes the necessary legal measures regarding the bill of exchange, but after 3 years have passed from the maturity date, the bill of exchange note cannot be submitted to the Execution Court, but rather it is submitted to the subject court.To demand The owner of the bill of exchange for its value.
This is based on what was mentioned in Article 84 of the Securities Law, which stipulates that the lawsuit regarding the bill of exchange shall not be heard if 3 years have passed since the maturity date.
He also does not listen to the lawsuit that is against the endorsers or the coast. If one year has passed from the date of the protest, which was drawn up within the statutory period, in addition to that the lawsuit that is between the endorsers against the drawer and against each other will not be heard if 6 months have passed from the date of payment of the bill of exchange.
File a complaint related to bills of exchange in Saudi Arabia
The bill of exchange is considered an important commercial paper that is used in many commercial transactions in the Saudi system, and its use has many advantages Like speed And protecting the parties therein from certain matters and other things.
Therefore, when the debtor is late in paying the money he owes to the creditor, the creditor has the right to file a complaint against him with the Ministry of Commerce, which specializes in these matters.
He also has the right to file a complaint with the Public Prosecution, and the Public Prosecution resolves the matter by giving the debtor another opportunity to pay the debt he owes. If he does not pay the debt, then the Public Prosecution takes the legal measures stipulated in the law. It is preferable to seek the assistance of a specialized lawyer to assist you and provide the necessary legal advice..
Hire a Commercial lawyer in Saudi Arabia
If you have a dispute related to financial claims or corporate debt collection and want to resort to commercial litigation, do not hesitate to contact us Financial claims and debt collection experts At Al Othman Law Firm, because they have legal experts whose experience extends to more than 15 years in commercial systems, and the experience of their staff of consultants exceeds more than 22 years in Commercial systems and debt collection In Saudi Arabia, Al Othman Company includes the best commercial lawyers in Saudi Arabia and Riyadh.
Al Othman Lawyers and Consultants are happy to serve you, so do not hesitate to Communicate with them and consult them The Al Othman law office is considered one of the best offices in the Kingdom.
Call Al Othman office on +966-535-008-888
Frequently Asked Questions
What if the bill of exchange amount required in letters differs from the amount written in numbers?
If the amount is written in numbers and letters, what matters is the difference in the amount written in letters, and if the amount is written several times in letters and numbers, what matters is the difference in the small amount.
Is it permissible to sign a bill of exchange on behalf of a person?
However, it is permissible to sign without authorization. If someone signs a bill of exchange on behalf of a person without authorization, he is bound by the bill of exchange.
Who can withdraw a bill of exchange in the Saudi system?
The creditor withdraws the bill of exchange due for payment after a period of sight or after a period of time from the date of creating the bill of exchange.
What is the validity period of the bill?
The bill of exchange is valid for 4 years, i.e. one year from the time the bill of exchange was created, in addition to another 3 years.
The bill of exchange and bill of exchange may also have a validity period of up to 3 years from the maturity date, depending on the system.
Conclusion
In conclusion, the bill of exchange remains an essential financial document in the world of business and trade. It is not just a financial instrument, but rather a path of commitment and trust in financial and commercial relations.
The bill of exchange is also a bridge between individuals and companies, as it facilitates payment operations and protects the parties concerned, thanks to the commercial paper system that governs its use.
Call Al Othman office on +966-535-008-888
