LAW OF OBLIGATION ACT, PART 9, CHAPTER 47, DIVISION 7

Division 7

Claims Arising from Non-acceptance or Non-payment 

  • 970. Claims of holder of bill of exchange in case of non-payment

(1) In the case of non-payment of a bill of exchange, the holder may require the following from the endorser, drawer or other parties to the bill after maturity:

1) the amount of the unaccepted or unpaid bill of exchange with interest;

2) a penalty for late payment in the amount provided for in § 94 of this Act, as of the date of maturity;

3) compensation for expenses relating to drawing up a protest and to notices given, and other similar expenses;

4) compensation to the extent of 0.33 per cent of the amount specified in clause 1) of this subsection.

(2) The prerequisite for the right of claim specified in subsection (1) of this section to be created is protesting the bill of exchange unless otherwise provided by law.

(3) If a claim specified in subsection (1) of this section is filed on the basis of § 963 of this Act before maturity, the amount of the bill of exchange shall be reduced by the interest payable for the period from the filing of the claim to the date of maturity in the amount provided for in § 94 of this Act, calculated according to the interest rate applicable on the date on which the claim is filed.

  • 971. Filing of claims before maturity

(1) The holder of a bill of exchange may make the claim specified in § 970 of this Act even before maturity in the event of:

1) total or partial non-acceptance of the bill of exchange;

2) the bankruptcy of the drawee or stoppage of payment on the part of the drawee or an execution proceeding conducted against the drawee without result;

3) the bankruptcy of the drawer of a non-acceptable bill of exchange.

(2) If the drawee of a bill of exchange has stopped performance of monetary obligations other than those arising from the bill of exchange or if an execution proceeding has been conducted against the drawee without achieving satisfaction of any of the claims against the drawee, the holder of the bill may still make a claim specified in § 970 of this Act if the bill of exchange has been presented to the drawee for payment and the non-payment has been protested.

  • 972. Giving notice of non-acceptance or non-payment

(1) The holder of a bill of exchange shall give notice of non-acceptance or non-payment of the bill to the immediate endorser of the holder and to the drawer of the bill within four working days after the date of protest or, in the case provided for in subsection 963 (1) of this Act, within four working days after non-acceptance or non-payment. An endorser who receives such notice shall notify the immediate endorser thereof within the two working days following the date of receipt of the notice, indicating the names and addresses of those who gave the previous notices, and so on through the series until the drawer of the bill of exchange is reached.

(2) The notice specified in subsection (1) of this section shall, in addition to the drawer and the endorser, be given within the same term to the avaliseur of the person.

(3) If an endorser has not specified the address thereof or if the address is not legible, the notice specified in subsection (1) of this section shall be given to the immediate endorser of the endorser.

(4) The notice specified in subsection (1) of this section is deemed to have been given even by simply returning the bill of exchange.

(5) A person who fails to give notice within the specified term does not lose the right of claim specified in § 970 of this Act but shall be liable for the damage caused at the fault of the person to the extent of the amount of the bill.

  • 973. Solidary liability of parties to bill of exchange

(1) The parties to a bill of exchange shall be jointly and severally liable to the holder of the bill for satisfaction of a claim specified in § 970 of this Act.

(2) Previous endorsers and the acceptor shall be jointly and severally liable to a party to a bill of exchange who pays the bill for satisfaction of a claim specified in § 970 of this Act.

  • 974. Right of claim of party to bill of exchange who pays bill

The party to a bill of exchange who pays the bill may recover the following from previous endorsers:

1) the entire amount of the bill of exchange paid by the party;

2) interest on the paid amount of the bill of exchange at the rate provided for in § 94 of this Act, as of the date of payment of the amount of the bill;

3) compensation for expenses incurred;

4) compensation to the extent of 0.33 per cent of the amount specified in clause 1) of this section.

  • 975. Transfer of Bill of Exchange

(1) A party to a bill against whom a claim specified in § 970 of this Act has been filed or may be filed may, upon satisfaction of the claim, require that the protested bill of exchange be given up to the party with a receipt certifying acceptance of the amount paid on the basis of the claim.

(2) An endorser who has paid a bill of exchange may cancel the endorsement thereof and endorsements of subsequent endorsers on the bill.

  • 976. Claims arising from partial acceptance of draft

(1) A person against whom a claim specified in § 970 of this Act has been filed pursuant to a draft which has been partially accepted and who pays the sum in respect of which the draft has not been accepted may require the person who filed the claim to indicate such payment on the draft and issue of a corresponding receipt.

(2) A person who pays the amount in respect of which a draft has not been accepted may require an authenticated copy of the protested draft from the holder of the draft.

  • 977. Consequences of failure to adhere to terms

(1) The holder of a bill of exchange loses the rights thereof against all parties to the bill, except the acceptor, in the case of failure to adhere to the terms set for:

1) presentment of a bill of exchange at sight or a bill of exchange payable at a fixed period after sight for acceptance or payment;

2) drawing up a protest for non-acceptance or non-payment;

3) presentment of a bill of exchange for payment if the holder of the bill is released from the obligation to protest the bill pursuant to § 963 of this Act.

(2) If the holder of a bill of exchange fails to present the bill for acceptance within the term set by the drawer, the holder loses the right of claim specified in § 970 of this Act unless it appears from the stipulation for the term that by setting the term the drawer only meant to preclude the liability thereof in the case of non-acceptance of the bill after the expiry of the term.

(3) A term contained in an endorsement may be relied upon only by the endorser.

  • 978. Failure to adhere to terms due to force majeure

(1) If a bill of exchange cannot be presented for acceptance or payment or protested within the specified term due to force majeure, the term is deemed to be extended until the force majeure ends. Facts which are purely personal to the holder or to the person authorised by the holder to present or protest the bill of exchange are not deemed to be force majeure.

(2) The holder of a bill of exchange shall immediately give notice of force majeure to the endorser of the holder and indicate the notice on the bill or on an allonge. The notice shall be dated and signed by the holder. In such case, the holder of the bill and the parties to the bill shall give their notices pursuant to the provisions of § 972 of this Act.

(3) When force majeure has ended, the holder of the bill of exchange shall immediately present the bill for acceptance or payment and, if necessary, protest the bill.

(4) If force majeure continues for more than 30 days after the maturity of a bill of exchange, a claim specified in § 970 of this Act may be filed without presenting the bill of exchange for acceptance or payment and without protesting the bill.

(5) In the case of a bill of exchange payable at sight or at a fixed period after sight, the term of 30 days provided for in subsection (4) of this section shall be calculated as of the date on which the holder of the bill notifies the endorser thereof of the force majeure, even if notification is given before expiry of the term for presentment of the bill for acceptance or payment. In the case of a bill of exchange payable at a fixed period after sight, the term of 30 days shall be extended by the period after sight specified on the bill.

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