The commercial papers (bills, promissory notes & cheques) are significantly used in our daily life. They are one of the important tools for dealing between the individuals and the companies or among the companies in their relations with each other. They are commonly used in financing and loans to keep the rights and to document the transactions between the parties.
The commercial papers are protected by Execution Law and its Executive Regulations and amendments thereof issued by the Royal Decree No. M/53 dated 13.05.1433H and its contents of procedures related to the execution of judgments, commercial papers, collection methods, attachment, and issuance of necessary orders and decisions as of the electronic notification, application of Decision No. 34, issuance of decision of Article 46 till the execution is done on the executee.
The commercial papers are formal instruments where the Saudi Law of Commercial Papers issued by the Royal Decree No 37 dated 11.10.1383H necessitates the provision of certain particulars in each of them so that the commercial paper can be legally binding. In addition, availability of the substantive conditions is considered necessary for the validity of the administrative commitment therewith in general.
The Saudi legislator has set statutory periods of limitations for the commercial papers so that they could not lose their value as payable instruments for seven months from the issue date of cheque. As to the bill and promissory note, if due date is specified by a date, the validity term of the bill and the promissory note is three years from the due date under the Law of Commercial Papers. If the commercial paper loses any of its statements and formal statutory requirements, it becomes incomplete and converts from a commercial paper into an ordinary paper which can be used as an evidence of transactions between the parties.
The commercial and financial development in the Kingdom which makes it one of G20 upon the classification of the International Monetary Fund for the economies has contributed to the increase of financial transactions in the Kingdom of Saudi Arabia and obligated a lot of dealers to use the commercial papers significantly inside the Kingdom. This matter has led to the expiry of a big part of commercial papers as to the form due to delay in collecting their amounts and disregarding the formal statutory requirements related to the validity of the instrument.
The Saudi legislator has not disregarded rights to the expired commercial papers as to the form, and he has transferred this matter to another competent authority other than the execution courts. The commercial papers are used as an evidence of transactions.
We depend on our extensive expertise for more than 23 years in debt collection and litigation of recovery of financial rights where we guide the clients and provide the right solution for every case through the following steps:
- To determine the suitable way for debt recovery.
- To initiate and follow up the litigation procedures.
- To apply the procedures of debt collection.
Claim of right with the competent authorities at courts requires meeting the following conditions:
1 – Original of instrument, cheque or bill.
2 – Official proxy for claim of right.
3 – ID Card of the defendant.
4 – Amount of claim.
5 – Original amount of claim.
6 – Receiving date
7 – Account statement or bank transfers and payments between the parties.