Promissory Notes in Saudi Law: Mandatory Elements, Enforcement Requests and Debtor Defenses

When do note and cheque claims lapse?

A claim on a promissory note against its maker is not heard three years after maturity, and a cheque holder’s recourse six months after the presentment period. Calculate yours with the limitation period calculator.

What is a promissory note under Saudi law?

The Commercial Papers Law, issued by Royal Decree No. (37) dated 11/10/1383H, governs the promissory note in its Part Two (Articles 87 to 90). A promissory note is an instrument in which a person called the “maker” undertakes to pay a specified sum of money on a set due date or on sight, to a named person or to their order. Article 90 provides that the maker of a promissory note is bound in the same way as the acceptor of a bill of exchange, so the maker is the principal debtor for the note's amount.

Article 89 applies a number of bill-of-exchange rules to promissory notes to the extent they are consistent with its nature, including the rules on endorsement, aval (guarantee), maturity and payment, protest and recourse for non-payment, and the time bar on hearing claims.

Mandatory elements of a promissory note

Article 87 sets out the elements a promissory note must contain:

• The order clause or the words “promissory note” written in the body of the instrument, in the language in which it is written.
• An unconditional promise to pay a specified sum of money.
• The due date.
• The place of payment.
• The name of the person to whom, or to whose order, payment is to be made.
• The date and place the note was issued.
• The signature of the person who issued the note (the maker).

A note that lacks any of these elements is not treated as a promissory note except in the cases set out in Article 88: if it has no due date, it is payable on sight; if it states no place of payment or maker's domicile, the place of issue is treated as both; and if it states no place of issue, it is deemed issued at the place shown next to the maker's name. Any other missing element, such as the signature, the amount or the order clause, may cost the paper its status as a promissory note.

When is a promissory note an enforcement instrument, and what has changed?

The Enforcement Law issued by Royal Decree No. (M/53) dated 13/8/1433H lists “commercial papers” among the enforcement instruments in Article 9. This is why the holder of a promissory note that meets the legal requirements can file an enforcement request directly with the enforcement court, without first obtaining a court judgment.

A new Enforcement Law was issued by Royal Decree No. (M/237) dated 3/11/1447H and published in the Official Gazette on 14/11/1447H. It enters into force 180 days after its publication and replaces the previous law. Under Article 7 of the new law, bills of exchange and promissory notes are enforcement instruments “when registered on the national electronic platforms,” with the implementing regulations to set out the registration conditions, controls and procedures.

The royal decree issuing the law contains a transitional rule: bills of exchange and promissory notes issued before the new law takes effect, and that meet the legal requirements other than registration on the national electronic platforms, remain enforcement instruments for one year after it takes effect. In practice, holders of paper notes should not delay collection, and new notes should rely on the approved electronic platforms, based on the text available at the time of writing.

How does the holder file an enforcement request on Najiz?

The Ministry of Justice offers a “Submit an Enforcement Request” service on the Najiz platform for filing enforcement instruments across all types of enforcement requests. The requirements listed on the official service page include:

• Completing the Najiz personal profile on first use.
• An active bank account (IBAN) linked to the applicant's name and ID number.
• Attaching a copy of the instrument and the required documents for its type, with a translation of anything not in Arabic.
• The respondent's details: full name, nationality, ID type and number, and address if available.
• A valid power of attorney that includes authority to file enforcement requests, if the request is filed by an agent.

Once the request is registered, the court verifies that the instrument meets its legal requirements, then issues an enforcement order and notifies the respondent. The current law gives the debtor five days from notification to pay or to disclose assets sufficient to settle the debt; the new law provides for five business days. For help at this stage, see our Financial Claims & Enforcement service.

The debtor's defenses on a promissory note

As a rule, the enforcement court only verifies that the instrument meets its legal requirements, without examining the underlying right, as Article 4 of the new law expressly states. Even so, the debtor still has legal avenues, including:

• An enforcement dispute before the enforcement court concerning the validity of the instrument, the conditions for enforcing it or the court's jurisdiction, for example where the note lacks a mandatory element or the debtor denies the signature.
• Pleading the time bar: the bill-of-exchange rules on this point apply to promissory notes, including that claims against the acceptor are not heard after three years from the due date (Article 84), and the maker is bound as an acceptor.
• Disputing the underlying debt before the competent court, for example by claiming payment or that the consideration was never received.

Note that Article 17 of the Commercial Papers Law, part of the endorsement rules that apply to promissory notes, prevents the debtor from raising against the holder defenses based on the debtor's personal relationship with prior holders, unless the holder intended to harm the debtor when acquiring the paper. Article 47 of the new law also provides that a dispute does not prevent enforcement from continuing unless the competent authority decides otherwise. The right defense depends on the facts and documents of each file, and where the underlying right is disputed you can turn to our Commercial Disputes service.

Practical checklist

For the creditor holding the note:

• Confirm all seven elements are complete before accepting the note, especially the amount, the due date and the signature.
• Keep the original in a safe place, and document why the note was issued in the related contract or invoice.
• For new notes, use the national electronic platforms, since registration on them is a condition for enforceability under the new law.
• Do not delay collection, and check the time-bar periods and the one-year transitional period for paper notes.
• Have your IBAN and the debtor's details ready before filing.

For the debtor: review the note, the signature and the due date as soon as you are notified, keep proof of payment, and do not ignore the statutory deadlines.