What Are the Procedures For Implementing a Promissory Note in the Saudi System?

The promissory note is one of the commercial papers that have been approved in the commercial papers system of the Kingdom of Saudi Arabia, and this bond is one of the things that many people wonder about, so we will show you in this article some important details related to this topic and what are the procedures for implementing the promissory note, so follow us……..

What is the bond for an order?

According to what was stipulated in the Commercial Papers Law, it is a written document that is distinguished by specific formalities. Its owner is committed to paying an amount of money at a specific time to the account of another person known as the beneficiary.

Who is the party requesting the issuance of a promissory note?

The promissory note is one of the procedures that take place between two people, so banks have no business whatsoever in issuing this bond, but only the creditor has the right to demand its issuance.

Terms of a bond to order

The commercial papers system in Saudi Arabia has made it clear that there are several conditions that must be met in order to be able to issue a promissory note. These conditions are as follows:

• The phrase (prompt promissory note) must be written in a clear manner in the same language as the body of the promissory note.
• Commitment to fulfill the agreed amount without a pending condition.
• The date of fulfillment of the bond for an order.
• The place agreed upon for the fulfillment of this bond.
• The name of the person who must fulfill the bond.
• The date and place where the promissory note was created.
• The signature of the promissory note writer.

Can a promissory note be devoid of a maturity date?

Article 88 of the Commercial Papers Law stipulates that if the promissory note is devoid of a maturity date, the promissory note must be fulfilled from the time of knowledge and viewing of the promissory note, and in this case the promissory note is presented again to the editor and he signs the promissory note and sets the date obligatory.

But if the editor refuses to sign the bond, the beneficiary has the right to submit a request to the Ministry of Commerce to specify a specific maturity date.

The contact number for the commercial system experts at Al Othman office  +966-535-008-888

Procedures for issuing an order bond electronically (via Nafeth)

1. Log in to the Nafeth platform first and register in it.
2. You have to choose to request a bond issuance.
3. You must verify the data of the other party.
4. Documenting the debtor’s consent.
5. Acceptance of the bond for an order and its creation.
6. Archiving the bond in the Nafeth platform.

The conditions and data necessary for requesting the issuance of a promissory note

When you request the issuance of a promissory note electronically through the Najer portal, there are some data that you must provide, including the following:

• A copy of the national identity card, or a copy of the residence permit for a non-citizen.
• A copy of the citizen’s ID and his power of attorney as well.
• The original executive document in addition to a true copy thereof.
• In cases of agency, it must contain a declaration guaranteeing the right to seize and execute.
• If the bond was issued by the court, the executive form of the bond must be present.
• The objection paper if the document does not provide for dropping it.

What is the period allowed for approval of the issuance of a promissory note by the debtor?

The creditor can set a time to approve the bond for an order, and it is automatically canceled, as the debtor cannot, after the expiry of the period, agree to create the bond.

Order form template

We will show you the form of a promissory note form that complies with the legal terms and conditions related to the promissory note:

“Support to the order”

Amount due …… Saudi riyals

The date of issuance of the bond is on…corresponding to….

Place of issuance of bond….

I acknowledge ………. By paying by virtue of this promissory note to the order of …….the amount that has been mentioned, which amounts to….. Saudi riyals, on the date …

The holder of this bond has the right to protest or return without expenses.

Debtor’s signature…

the name …..

residence……..

No. civil registry…….

Types of order

There are many types of promissory notes, including the following:

• A promissory note for personal debts
• Simple promissory note
• Special promissory note and loan
• Promissory note for investments
• A promissory note for commercial transactions
• Promissory note for real estate

Procedures for executing a promissory note

Bonds are filed in the execution courts electronically through the Nages portal, you only need to follow the following steps:

• Open the webpage of the Nages portal.
• Log in through your personal account on the Nages portal, or through the unified national login.
• Choose Execute icon from the main portal menu.
• You then choose to apply.
• Determine the type of request “Financial Execution”.
• Determine the type of the main bond “electronic bond”.
• Determine the lot type of bond “Promissory note”.
• Agree to pledge in addition to filling out the form.
• Make your choice of court.
• Choosing the status of the presenter on behalf of the legal entity.
• Include all the details of the request and also verify the data of the party against whom it is executed.
• Add all required data.
• Click on save.
• Insert the previously uploaded bond number on the platform.
• Keep the bond number.

Thus, you can raise the application to the special court for implementation.

When is a promissory note executed?

The Kingdom of Saudi Arabia has set a period in which the concerned person can file a lawsuit for execution. This period is three years, and in the event that the period expires, the judge does not consider this document.

(For more information about appealing a promissory note in KSA)

The validity period of the bond for an order

The validity period of the promissory note extends to three years from the date of issuance of the promissory note.

Is it possible to amend the bond for an order?

If the bond is created for an order by the debtor, then in this case the bond cannot be amended.

If it is not approved, it can be amended

Is it possible to cancel the bond for an order?

The Ministry of Justice has indicated that the creditor can cancel the promissory note after its approval. As for the debtor, he cannot cancel the promissory note after its approval, nor can he create amendments to it.

Penalty for non-fulfillment of the bond for an order

When filing a lawsuit with the court for non-fulfillment of the bond for an order, the judge shall issue a set of penalties on the following gradation:

• Executive imprisonment of the debtor until he pays the debt or gets out on bail.
• Issuance of a ruling to stop government services for the debtor, especially those related to traffic.
• It is also possible to order the suspension of banking services, such as the seizure of the debtor’s funds.
• Adding the debtor’s name to the travel ban list.

Commercial lawyer and bonds in Saudi Arabia

If you have a business or corporate dispute and want to resort to commercial litigation, please feel free to contact the Trading system experts At Al-Othman Law Firm, because they have legal experts whose experience extends for more than 15 years in commercial systems, and the expertise of their staff of consultants exceeds more than 22 years in Saudi commercial systems, and Al-Othman Company includes The best commercial lawyer in Saudi Arabia and Riyadh.

And the office of Al Othman Lawyers and Consultants is pleased to serve you, so do not hesitate to Contact us and consult us Where Al-Othman law firm is considered one of the best offices in the Kingdom.

The contact number for the commercial system experts at Al Othman office  +966-535-008-888

Frequently Asked Questions

What are the advantages of a promissory note?

• One of the most important features of the promissory note is that it connects the two parties to the promissory note electronically.
• Preserves the rights of individuals.
• The bond guarantees fairness and transparency, as it works to protect individuals and commercial entities.

How does the bond invalidate an order?

If the conditions that must be met are not met, as previously stated.

Who can request the issuance of a promissory note?

The creditor is the party requesting the issuance of a promissory note.

Can lending companies issue promissory notes?

Yes, lending companies can issue a promissory note when they wish to provide financing, and this is in accordance with specific terms and conditions.

What are multiple bonds?

It is a group of bonds linked to a specific basic demand, and it has multiple maturity dates, as each bond has its own maturity date.

Conclusion

To this end, we have completed the article in which we explained what the bond is for an order, and what are the procedures and conditions necessary to raise the request as a penalty for not fulfilling the bond, hoping that this article has received your benefit. In the end, as it was stated, the objection to a promissory note and the related cases contain many details that require a specialized lawyer, so do not hesitate to Communication with experts in bonds and commercial systems At Al Othman’s office to benefit from their advice and experience.

The contact number for the commercial system experts at Al Othman office  +966-535-008-888.