UNITED NATIONS CONVENTION

ON INTERNATIONAL BILLS OF EXCHANGE AND INTERNATIONAL PROMISSORY NarES

UNITED NATIONS

New York, 1988

United Nations Conventioh on International Bills of Exchange and International Promissory Notes

CHAPTER I. SPHERE OF APPLICATION AND FORM OF THE INSTRUMENT

Article 1

1. This Convention applies to an international bill of exchange when it contains the heading "International bill of exchange (ONCITRAL Convention)· and also contains in its text the words "International bill of exchange (ONCITRAL Convention)".

2. This Convention applies to an international promissory note when it contains the heading "International promissory note (UNCITRAL Convention)" and also contai.ns in its text the words "International promissory note (UNCITRAL -Convention) ".

_ 3. This Convention does not apply to cheques.

Article 2

1. An international bill of exchange is a bill of exchange which specifies at least two of the following places and indicates that any two so specified are. situated in different States:

(~) The place where the bill is drawn~
(!?) The place indicated next to the signature of the drawer;
(£) The place indicated next to the name of the drawee;
(~) The place indicated next to the name of the payee,
(~) The p l ace of payment,
provided that either the place where the bill is drawn or the place of payment is
specified on the bill and that such place is situated in a Contracting State. ·2. 1\n international promissory note is a promissory note which specifies at least two ot the following places and indicates that any two so specified are situated in different States:

(_!l Thoe place where the note is made,
(£) The place indicated next to the signature of the mak<er;
{£l The place indicated next to the name of the payee;
(2.) The place of payment, provided that th.e place of payment is specified on the note and that such place is situated in a Contracting State.

3. This Convention does not deal with the question of sanctions that may be imposed under national law in cases where an incorrect or false statement has been made on an instrument in respect of a place refer red to in paragraph 1 or 2 of this art iele. However. any such s-anctions shall not affect the valid i ty of the instrument or the application of this Convention.

Article 3

1. A bill of exchang~ is a written instrument which:

(._!) Contains an unconditional QJ:der whereby the drawer directs the drawee to pay a definite sum of money to the payee or to his order~

(~) Is payable on demand or at a definite time~

(£1 Is dated,

(.21 Is si.gned by the drawer.

2. A PJ:ornissory note is a written instrument which:

(.!) Contains an uncondit.ional promise whereby the maker undertakes to pay a definite sum of money to the payee or to nis order1

(~) Is payable on demand or at a definite time;

(£) Is dated f

I~) Is signed by the makeJ:.

CHA,PTER II. INTERPRETATION

Section 1. General provisions

Article 4

In the interpretation of this Convention, regard is to be had to its international character and to the need to promote uniformity in its application and the observance of good faith in international transactions.

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Article 5

In thisConYention:

(A' "s1U" means an international bill of exchange 90verned. by this Convent.lonl

(,2) ".Note" means an tnternational promissory note governed by this conventionl

(£1 "Instrument" meanS a bill or a note;

(g) "Dra.we'e"mea.ns a per.son on whom a bill 1s drawn and who haa not accepted

(!,) "Payee" means a person 1n wbose favaur the drawer directs payment to be made or to wbom the maker promises to paYI

(!) "Halder" means, sperson in possession of an instrument in accordance with article 1.5,

<.g_l"Proteeted holder" means a holde.r who meete the requiremen.t8 of article 29,

(..h) "Guarantor" means any pe.rson wbo undertakes an abHgation of gUarantee underarti.cle46. whether gaYer ned by paragraph 4 (,2) ("guaranteed"Jor

p.ar 89 r aph " {.£} { "a Villi II lofa r t iele 47,

(1) "P.arty· means a person w.ho h.as .signed an instrument as drawer, maker, acceptor, endor ser or 9 uar antor J

(j)" Ma tur 1. ty" .m.eans the time o,f payme n t rete rr ed to in par ag r aphs 4, 5, 6 and 7 of artlcle9,

(.ls.) "Signature" means a handwritten si.gnature, its fac.simHe or an equivalent authentication effeoted by any other m.eans;"forged .signature" .includes eo signature by' the wrongful use of such means,

(!) "Money" or "currency" includes a monetary 'Unit of account which is established by an intergavernmental institution or by agreement between two or more States, provided that this Conventi.on shall apply without p.rejudice to the rules 0.£ Ue-1ntergovernmental institution or to the stipulati.ona o,f the agreement.

Article 6

For the purposes of this Convention, a pe.rson is considered to have knowledge of a fact if he bas actual knowledgeo! that fact Ot could not have been unaware of i t.se_x istence.

Section 2. Interpretation of formal requirements

Article 7

The sum. payable by an instrument 1.s deemed to be adeUnite sumalthou.gh the instr wnent states that 1 t is t.o be paid:

(~) Witb interest)

(~) By instalments at successive dates;

(.£) By instalments at successive dates with a stipulation in the instrument that upon default in payment of any instalment tb.e unpaid ba).ance becomes duel

(9) According to a rate of exchange. intllcated in the instrument or to be determined as directed by the instrument; or

(.!..l In a currency other than the currency in whi.ch the sum !sexpressed .In the instrument.

Article 8

1. If there is a discrepancy between the sum expressed in words and the sum

expre.ased in figures, the sum payable by the instr;ument is the sum expressed. 1n words.

2. If the sum. isexp.Iessed more than once in words, an(J there is a

disc.repancy, the sum payable is the sma.ller sum. The same rule applies if the Bum is expressed more than once in figures only. and there is a. di.ec.repancy .•

3. If the sum is expre.ased in a curr eney ha.vi.ng the same de.scriptlon as that of at least one other State than the Statewhete payment is to be made, as indicated in the instrument, and the specified currency is not identified as the cu.rtency of any pa.rticular State, the curtency is to be considered as the cuu'enoy of the State where payment is to be made.

4.. If an instrument states that the sum is to be pa ld with. interest, wi thollt specifying the date from which interest is to run, Int.e:.rest runs from t~e dateo·f the instrument.

5.. A stipuLation stating that the sum is t.o be Paid with interest is deemed

not to have been written on the instrument unless it indicates the rate at which interest is to be paid.

6. A rate at which interest is to be paid may be expressed either as a

definit·e rate or as a variable rate. For a variable rate to qualify for this purpose. 1 t must vary in relation to one or mor,e reference rates of interest in accordance Wl~n provisions stipulated in tbe instrument and each such reference rate must be published or otherwise available to the public and not be subject,

direct.ly or indirectly. to unilateral determi.nation by a person who is named in the instrument at the time the bill is drawn or t.he note is made. unless the person .1.8 named 0.n1y In the reference ratep.rovlslons.

7. If t.b.e rate at which Int.e.reSt 1.6 to be paid is expressed. as a variable

rate. it may be .st.ipulated expressly in the .l.nstrument that such rate shall not be less than or exceed a. specified rate of interest, ort-hat the va.riationsare otherwise limited.

8. If a v.a.rlable rate does not qualUy under paragraph 6 of this 8.rt.lcle or

for any reason it is not possible to determine tbe numerical value of the varl.able rate £·o.r any period. interest shall be payable for the relevant per:i..oa at the .rate calculated in accordance with paragrapb 2 ofaxticle 70.

Arti.cle 9

L An instrument is deemed t.o be payable on demand.

(.!_) If it states that it is payable at sight ot on demand. or on presentment or if it contains words of similar impottJ or

(£) If no time of payment is eKP·ressed.

2. An instrument payable at a. deUni.te time which is accepted or eniSot'sed or

guaranteed after maturity laan instrument payable on demand as regards the acceptor, the endorser or the guarantor.

3.. An instrument is deemed to be payable at a definit.e time if 1.t .states

that it is payable.:

(!) On a sta.ted date or at a. fixed pe.riod after a stated date or ata. fix.ed per 100 after the date of the In.strument;

(R)A t a fixed pe dod a f t·e r s.igh t ~

1£) By instalments at successive dates, or

t_21 By instalments at successive dates wit.h the stlpulation in th.e 1nst.rument

that upon default in paymen.t of any instalme.nt the u.np.aid balance becomes due.

4. The timeo·f pay.ment of an instrument payable at 8 fixed per lad after date

is determined by reference to the date of. the instrument.

5. The time of payment of a bill payableata fixed per lod. after Sight is

determined by the date of ·accept·ance or. if the bill is dishonoured by non-acceptance. by the date of p.rotest or, if protest is dispen·sed with. by the da.te of dishonour.

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6. The time of payment of an instrument payable on demand is the date on

..... hich the instrument is presented for payment •.

7. The time of payment of a note payable at a f.ixed per lod after s.ight is

dete.rmined by the da.te of the visa signed by the maker on the note or, if his visa is refused, by the date of presentment.

8. If an. instrument is drawn. or made, payable one or more months after a

stated dat.e or after the date of the instrument or after sight, the instrument is payable on the correspondlng date of the month when payment must be made. If there is no corresponding date, the instrument is payable. on the last day of that month.

Article 10

1. A bill may be drawn:

(.!) By two or more drawers;

(_Q) Payable to two or more payee.s .•

2 • A note may be made:

(.!) By two or more makersJ

(_Q) Payable to two or more payees.

3. 1£ an instrument is payable to two or more payees 1n the a.lt.ernative, it

is payable to anyone of th.em and any one of them in posseSSion of the instrument may exercise the rights of a holder. In any other case the instrument is payable to all of them and the rights of a holder may be exercised only by all of them.

Article 11

A bill may be drawn by the drawen

{.!I On himself,

(..Qi Payable to his order.

Section 3. Completion otan incomplete instrument

Article 12

1. An incomplet.e instrument which sa.tisf ies the requirements setout in paragraph 1 of articl.e 1 and bears the signature of the drawer or t.be Bcceptance of the drawee, or whichs·atisfies tbe requirements set out in paragrapb 2 of article 1 a.nd paragrapb 2 I.E.) of article 3 .• but which lacks other elements pertaining to one

0.[ more of the requirements set out. 1n articles 2 and 3, may be comPleted, and the instrument so completed iseffect.lve as a bill or a note.

2. If such an instrum.ent is compLeted wi thoutallthor tty or otherwise than In accordance with the au.t.hority given:

(A) A party who signed the instrument before thecompleti.on may .1nvoke such lack of authority as a defence ag,a.inst a holder who had know led.g e of Buch lack of authodt.y when he became a holder I

(B.) A party who .$:igned the instrument ·after thecomp.LeU.o.n is Hable according t.o the terms of the instrument so completed .•

CHAPTER Ill. TRANSJi'ER

ArtIcle 13

An Instrumen.t is transf'eneda

(!.) 8y endorsement and d.elivery of the·-instrument by t.heen.ooreer to the endorsee, or

<J2) By mere delivery of the instrument 1f the last endorse.ent i.8 in blank.

Art.icle 14

1. An endorsem.ent must be written on the instrument or on a sUp affixed the.re to (. allonge",. I t mu s t be s 19oed •.

2. An endorsement may be:

(.!_) 10 blank, tha tis. by a s Ig na tur e a.10o.e or by a. s 19na tar e. accompan.ied by a statement to th.eeffec·t tha.t the instrument is payable to a petso.n in possession ot it.

(,2,)Spec1al, that is, by a signature accompanied by an indication of the pe.rson t.o whom the inst.cument is payable.

3. A. signature alone .• other than that of ~he -cftawee, 1s an endorsement onl.?

if placed on the back of the instrum.ent.

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Article 15

1. A person is a holder if he is:

(!_) The payee in possession of the instrument .• or

(.2.) In posses.sion of an instrument which has been e.ndo.rsed to hi.m, or on whic.h the last endorsement is in blank, and on whi.ch there appears an uninterrupted series of endorsements, even if any endorsement was forged or was signed by an agent without authority.

2. If an endorsement in blank is followed by another endorsement, the per.Bon who .signed this last endorsement is deemed to be an endorsee by the endorsement in blank.

3. A person is not prevented from being a holder by the fact that the

instrument was obt.ained by bim at any previous holder under cil:cumstances, including incapacity or fraud, duress or mistake of any kind, that would give rise to a clai.m t.o, or a defence against liability on, the instrument.

Article 16

The holder of an instrument on which the last endorsement is in blank may:

(_~) Further endorse it either by an endorsement in blank or by a speCial endor semen t ,

(.2) Convert the blank endorsement into a spec.ia.l endorsement by indicating in the endorsement that the instrument is payable to himself or to some other specified person; or

(.£1 Transfer the instrument in accordance with SUbparagraph (.2) of article 13.

A.rticle 17

1. If the drawer; or the maker has inse.rted in the instrument. such words as "not negoti.able", "not t.ransferable", "not to order", "pay (X) only" , or words of similar impor t., the instr umen tmay not be transferred except for purposes of collection, and any endorseme~t. even if it does not contain wOIds authorizing the endo[see to collect the instrument, is deemed to be an endorsement for collection.

2.. If an endorsement contains the words "not negotiable" ,"not

transferable", "not co order", "pay (X) only", or words of similar import, the inst[ument may not be transferred further except for purposes of collection, and any subsequent endorsement, even if it does not contain words .authorizing the endorsee to collect the instrument, is deemed to be an endorsement forcollect.ion-.

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Article 18

1. An endorsement must be unconditional.

2. A condiUonalen.dorsement transfers the instrument wbether or not the condition 1s fulfilled. Theconditi.on is ineffective as to those partie.s and transferees who are subsequent to the endorsee.

Article 19

An endorsement in respect of a part of the sum due under the instrument is ineffective as an endorsement.

Article 20

lfthere are two or more endorsements, it is p.re.sumed, unless the contrary 1s proved, that each endorsement was made in the' order in which it. appears on the instrumen.t.

Artic1e21

1. If an endorsement contains th.e word,s "for collection", "for depo.sit", ·value tn collection", "by procuration" ,"pay any ba.nk", or words of similar import author izing the endorsee to collect the instrument, the endorSee 1s a bolder who.;

(!o) May exercise all rights ar 1s.1ng out of the instrumentJ

<E_) M.ay endorse the instrument only for purposes of collectionl

I.E) Is subject only to the claims and defences which ma.y be set up against

the endorser.

2. The endorser for collecti.on is not liable on the instrument to any subsequent holder.

Article 22

1. If an endorsement contains the words "value io security", "value in pledge". or any other words indicat.ing a pledge, t.he endorsee is a holder wbol

(!!) May exercise all rights ariSing out of the instrumentJ

1,2:) May endorse tne instrument only for purposes of collectioni

(.£) Is subject. only to the claims a.nd defences specified in article 28 or article 30.

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2. If such an endorsee endorses for collection, he is not liable on the instrument to any subsequent holder.

Article 2 .. 3

The holder of an instrument may transfer it to a prior patty or to the drawee in accordance with arUcle 13; however, 1£ the transfe.ree has previously been a holder ·of the instrument, no endorsement is required, and any endo[sem.ent which would prevent him fr·om qualifying as a holder may be struck out.

Article 24

An instrument may be tlansferred in accordance wilharticle 13 aft·er maturity, exc.pt. by the drawee, th.e accepto.ro.r the maker.

Article .25

1. If a.n endorsement is forged. the per son whose endorsement is forged, or a party who signed the instrument befo.re the forgery. has the right. to recover compensation fat any damage that he may have .suffered because of the forgery "g"tnstl

(!.) 1'he £0(ge"

(_E:) 1'.be person to whom the instrument was directly transferred by the f.orger,

(.s:) A party or tbe drawee who paid the in.strument to the forger dlrectly or through one or moreen.dorsees for collection.

2. However, an endorsee for collection is not liable under paragraph 1 of

this article .if he is withou.t knowledge of the forgery;

(.!) At the time he pays the principal or advises him of the receiPt of paymentl or

(~) At the time he receives payment, if this is later,

unless hts lack of knowledge is due to his failute to act in good faith or to exercise reasonable care.

3. Fu.rthermore, a party or the drawee who pays an instrument is· not liable

under para9raph I of this art.icle if, at the time he pays the instrument, he Is without knowledge of the forgery, unless his la.ck of knowledge is due to his failure to act in good faith or to exercise reasonable care.

4. Ex.cept as against the forger, the damages re.coverable under paragraph I

of this article may not exceedt.he amount referred to in article 70 or article 71.

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Article 26

1. If an endorsement 1s made by an agent without autho.rity or power to bind his pr.inc.ipal in th.e m.atter, the principal, or a party who .signed the instrum.ent before such endorsement;.,has the right to recover c.ompensatl0.n for any damage tha.t he may have suffered because of su.cb endorsement against:

(!) The agent,

(B.) The person to whom the 1.nstrument was directly transferred by the agent,

(g) A party or the drawee who paid the instrument to the agent dit:ect.ly or through one or mot:e endorsees for collection.

2. However. an endorsee for collection is not liable under paugcaph lot t.hls a.rticle 1£ he is without knowledge that the endorsement does not bind the principal:

(.!) At the time he pays. the principal or advise,s him ·of the receipt of payment; or

(B.' At the time he recei.ves payment:;: ir titi'S:- is- ~later-;

unless his lack of knowledge is due to his failure to act in good. faith or to exe.rcise reasonable care.

3. Furthe.rmoce. a party or the drawee who pays an instrument is not liable

under paragraph 1 of this article if, at the time h.e pays the instrument, he is without knowledge that the endorsement does not bind the principal, unless his lack of knowledge tsdue to h,l·sfaUure to act Ingood.£aith or to exercise reason.able care.

4. Except as against the agent, the damages recoverable under para.graph 1 of

this article may not exceed the amQunt referred to inartic!e 70 or article 71.

CHAPTER IV. RIGHTS AND LlABILITIES

Section L The rights o·f a holder and of a protected holder

Article 27

L The holder of an inst.cument has aU the rights confer.redon him by this

Convention against tbe pa.rties to the instrument.

2. The holder may transfer the instrument in accordance with article 13.

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Article 28

1. A part.y may set up against. 'a holder who is not a protected holder:

(~) Any defence that. may be set. up against a protect.ed holder in accordance with paragraph 1 of arti.cle 30;

(e) Any defence based on the underlying transaction between himself and the dra.wer or between himself and his t.ransferee, but only if the holder took the instrument with knowledge of such defence or if he obtained the instrument by fraud or theft or participated at a.ny time in a fraud or theft concerning it;

(£) a party, or if he fraud or

Any defence arising from the circumstan.ces as a resQlt of which he became but. only if the holde.[ took the instrument wi.th knowledge of such defence obtained the instrument by fra.ud or theft orpart.icipated at any t111e In _ theft concerning itJ

(g) Any defence which may be raised against an action 1n contu.ct betwee.n h1mself and the holden

(!.) Any other defence avallabl&- undel' -'t·h4:. €onvention.

2. The rights to an instrument of a holder who is not a protected holder Ire subject to any valid claimt.o the instrument on the part of any person, but only If ~e took the instrument with knowledge of such claim or .if he obtained the f.nstrument by .fraud or theft or participated at any time in a fr·aud or theft concerning it.

3. "A holder who tak.es an instrument after the expir.ation of the time-limit

for presentment for payment is subject to any claim to, or defence against liability on, the instrument to which h.istrans.feror is subje.ct.

4. A party may not raise as a defence against a holder who is not ill protected holder the fact tha.t a third person has ill claim "to the instrument unless:

co!) The third person a.sserted a vaUd claim to the instrument, or

<e) The holder acquired the instrument by theft or forged the .s.ignatu.re of the payee or an endorsee, or participated in the theft or the forge.ry.

Article 29

'"Protected holder n means the holder of an instrument whicbwas complete when he took .it or which was incomplet.ewithin the meaning of paragraph 1 of article 12 and wBscompleted 'in accordance with authority given, provided that when. he became ill holder:

<_!) He was without k.nowledge of a defe.nce aga.inst liabiUty on the instrument referred to in parag.raphs 1 (_!), <e), (£) and (!.) of article 28~

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c'B) He was wi.thout knowledge of a valid claim to the instrument of any per sem

(c) He was without knowledge of the .fact that i.t had been dishonoured by

n.on-acceptance or by non-payment,

(d) The time-limitprov.tded by a.[ticle 55 for presentment of that instrument for paYment ha.d not expired,

(!:) He did not obtain the instrument by .fra.ud or theft or participate in a fraud or theft concerning it.

Article 30

1. A party may not set up a.gainst a protected holder any defence except:

(a) Defences under paragraph 1 of article 33,artic1e 34, paragraph 1 ·of ertie1e 35, paragraph 3 of article 36,paragra.p.h lof article 53,parag[.aph 1 of article 57 ,paragraph 1 of article 63 and article 84 of thl.s COnvention,

(B,) Defences based on the -underlying" trans'acti&rt----be'tween himself-anil sncb holder or orls1.ng f:rom any fraudulent act on the part of such holder in obtaining the s.i.gnature on the in.strumentof that party;

(e) Delenc·es based on his incapacity to incur liability on the instrument or on the f·e,.ct that he signed without knowledge that h.issig.nature .made him a party to the instrument, provided that his lack of k.nowledge was not du.e to his negligence and provided that he was f.raudulently induced so to sign .•

2. The rights to an instrument of a protected holder are not subject to any claim to the instrument on the part of any person, eX.cept a valid claim arising .ft·om the underlying transaction between himself and the person by whom the claim I s raised.

Article .31

1. The transfer of an .instrument by a protected holder vests in any subsequent holder the right.s to and on the instrumentwt.ich the protected holder had.

2. Those rights are not vested in a subsequent. holder if:

(!_) He participa.ted in a transaction which gives rise to a claim to, or a defence ag~inst liability on, the instrument:

(B,) He has p.reviously beena. holder, but nota protected holder.

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.Artlcle 32

EVery hoLder iepresumed to be a protected holder unless the contrary is proved .•

section 2. Liabilities of the parties

A. General provisions

Article 33

1. Subject t.o the provisioneof articles 34 and 36, a person is not liable

on a.ni.nstrument unless he signe it.

2. 1\.. person who aignsan instrument In a name which is not: his own is liable as if he had signed it In his own name.

Artiele 34

A forged slgnat.ure on an inlStrum.ent does not impose any l.iabllity on the person whose sig.nature was forged. Howe.ver, if he consents to be bound by the fo.rged signature or repl:'esents that it is his own, he is liable as, if he had signed the instrument hi.mself.

Article 35

1. If an instr I,lment is rna ter ially a.l tered:

(.!l A party who si.gns it a.£ter the material alteration is Uableaccording to the t.erms of the altered text,

(b) A party who .5i9ns it before the material arteratlon is liable accordi.n.q to the-terms of the origi.naltext. However, i.f a pa.rt,y makes, authorizes or assents to a materia.l alteration, he is liable according to the terms of the altered text.

2. A signature is presumed to have been placed on the instrument ·after the

mater:ial alteration unless the contrary is·proved.

3. Any alteration is mater ial which modifies the wd.tte.n und.ertaking on the

i.nst.rument of any pa.rty in any respect •.

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ArticLe 36

1. An instrument may be Big"ned by an agent.

2. The signature of an agent placed by him on an instrument with the authority of his principal and showing on the instrument that he is sIgnIng in a representative capacity for that named principal, or the signature of a principal placed on tbe instrument by an agent with his authority. imposes liability on the principal and not on the agent.

3. A signature placed on an instrument by a person as agent but who lacks authority to sign or exceeds his authority, or by an agent who has authority to sign but who does notsbow on the Instrum.ent that he is eign.ing in a representative capacity for a named person, or who shows on the instrument that he Is 8igning In a representative capacity but does not name the person whom he represents, imposes liability on the person signing and not on tbe person wboa he purport8 to represent.

4. The question whether a signature was placed on the instrument in a representative capacity may be determined only by reference to what appears on the instrument.

5. A person who is Uable pursuant to paragraph 3 of this article and who pays the instrument has tbe same rights as the perse.n for whom be pu.rported to act would have bad if that person had paid the instrument.

Article 37

The order to pay contained in a bill does not of itself operate as an assignment to the payee of funds made available for payment by the drawer with the drawee.

B. The drawer

Article 38

1. Tbe drawee engages that upon dishonour of the bill by non-acceptance or by non-payment, and upon any necessary protest, he will pay the bill to the holder, or to any endorser or any endorsec's guarantor who takes up and pays the bill.

2. Tht; drawer may exclude or limit his own liability for acceptance or fox payment by an express stipulation in the bill. Such a stipulation is effective only with respect tq the deawer. A stipulation exclUding or limiting liability for payment is effective only if another party is or becomes liable on the bill.

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C. The ma.ker

Article 39

1. The maker engages. that he will pay the note in accordance with its terms to the holder, or to any party who take,s up and pays the note.

2. The m.aker may not exclude or Umit his own liabiHt:y by is st.1.pula.t!on in the note. Any such stipulation is ineffective.

D. The drawee and the acceptor

Article 40

1. The drawee is not liable on a biU until he accepts it.

2. The accept.orengages that;. he will pay the bill In accordance with the terms of his acceptance to the holder, or to any party who takes up and pays the btl I.

Article 41

1. An acceptance must be written on the bill and may be effected:

(_!) By the signature of the drawee accompanied by the word -accepted" or by wordso! similar import, or

(E-I By the slgnature alone of the drawee.

2. An acceptance may be written on the front or on the back of the bilL

Article 42

L An incomplete bill which satisfies the requireme.nt.s set out in

p.ara.graph 1 of article I may be accepted by the drawee before it has been signed by the drawer, or while otherwise incomplete.

2. A bill may be accepted before, at or after maturity, or after it has Deen dishonoured by non-acceptance or by non-payment.

3. If a bill drawn payable ata fixed period after sight, or a bill which must be pres.ented for acceptance before a specified date, is accept.ed,the acceptor mu s t i nd icat~ the da te of h is a ccep tance ; fa 1 1i ng sue hind Lea t ion by the acceptor, the drawer or the holder may insert the date of acceptance.

4 • I f a b i 11 drawn payable a t a fixed pe.riod a iter s 19h t 1 s dishonoured by non.-acceptance and the drawee subsequently a.ccept.s t.t, the holder is enti tIed to have the accepta.nce dated as of the date on which the bill was dishonoured.

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Article 43

1. An acceptance must be unqua.lified. An acceptance i.s qualified if it 1.8 conditional or varies the terms of the bill.

2. If the drawee stipulat.es in the bill that his acceptance is .subject to qualification:

(~) He is nevertheless bound according to the terms of his qualified aceepta nce.~

(.£) The bill is dishonoured by non-acceptance.

3. An acceptance relating to only a pa.rt of the sum payable is a quaU.fied acce pt ance, If the holder takes such an acceptance, the bill is dishonoured by non-acceptance only as to the remalning part.

4. An acceptance indicating t.hat payment will be made at a particular address or by a particular agent is not a qualified acceptance, provided that:

(~) 'l'he place in which payment--is to be.made .is._not__c.bang,edl

(.£1 The bUl is not drawn payable by another a.gent .•

E. The endorser

Art1cle44

loThe endorser engages that upon disbonour of the instrument by non-a.cceptance or by n.on-payment,. and upon any necessary protest, he will pay t.he instrument to the holder, or to any subsequent endorser or any endorser'sguarantor who takes up and pays the instrument.

2. An endorser may exclude or limit his own liability by an express stipulation in the instrument. Such a stipulation iseffect.ive only with respect to that endorser.

F. The transferor by endorsement or by mere delivery

A.rticle 45

1. Unless otherwise agreed, a person who transfers an instrument, by endorsement and delivery or by mere delivery, represents to the holder to whom he transfers the instrument that:

c_!) The instrument does not bear any forged or unauthorized signature;:

C.£) The i nst.rumen t has. not been rna terially a1 tered;

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(£) At the time of transfer, he has no knowledge of any fact which would impair the right of the transferee to payment of the instrument against the acceptor of a bill or, in the case of an unaccepted bill, the drawer, or .against the maker of a not.e.

2. Liability of the transferor under paragraph 1 of this article is incurred only if the transferee took the i.nstrument without knowledge of the matter giving rise to such liabHity.

3. If the transferor is liable under paragraph 1 of this article, the transferee may recover, even be.fore mat.urity, the amount paid by him to the transfero.r, with int.erest calculated in accordance with article 70 r against return of the instrument.

G. The guarantor

Article 46

1. paym.ent of an instrument, whether or not it has been accepted, may be guaranteed, as to the whole or part of its amount, for the aq;OL,Ult of a party~ ,Q(. the drawee. A guarantee may be -ijiven by any person, -who may-or may not already be a party.

2. A. guarantee must be written on the instrument or on a slip affixed thereto '"allongen}.

3. A gua.rant.ee is expressed by the words nguaranteed", naval",. "good as ava I It or words of s imUar import, accompan ted by the s.ignatureof the guarant.or. Fo'tthe purposes of this Convention, the words "prior endorsements guaranteed" or words of si.milar import do not constitute a guarantee.

4. A guarantee may be effected bya signatu.re alone on the front of the instrument. A signature alone on the front of the inst.rument. other than that of the maker, the drawer or the drawee, is a guarantee.

5. A guarantor may specify the person for whom he has become guarantor. In the absence of such specification, the person for whom he haS become guarantor is the acceptor or the drawee in the case of a bill, and the maker in the case of a note.

6. A guarantor may not raise as a defence to his liability the fact that he signed the instrument before it was signed by the person for whom he is a guarantor, or while the instrument was incomplete.

Article 47

1. The liability of a. guarantor on the instrument is of the same nature as that of the party for whom he has become guarantor.

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2. If the person for whom he has become guarantor is the drawee, the guarantor engages:

(!.) To pay the bill a t rna t ur i. ty to the holde r, or to any par ty who takes up and pays the hill;

(2) If the bill is payablest a definit·e t.ime, upon dishonour by non-acceptance and upon any necessary protest, to pay it to the holder, or,t08ny party who takes up and pays the bill.

3. In respect of defences that are personal to himself,. aguarant:or may set

up;

(~.l Against a holder who is not a protected holder only those defences which he may set up under paragraphs 1, 3 and 4 ·of article 26,

(E_) Against a protect.ed holder only those defences which he may .set up under paragra.ph 10£ article 30.

4. In respect of defences that may be rai.sed by the person for whom he has become a guarantor:

(_!) A guara.nto.c may set up against a holder who is not a protected holder only those defences which the person fo·r whom he has become a guarantor may set up a.gainst such holder under paragraphs 1, 3 and 4 of article 28;

(!!.) A gua.ra.nt.or who expre.s.ses his guarantee by the words "gu.aranteed·, "payment guaranteed" or "collection guaranteed", or words of Similar import, may set up against a prot.ected bolder only those defences· wbich the person fo.r whom he has become a guarantor may set up against a protected holder under paragraph 10f a.rtlcle 30;

(g) A guarantor who expresses his guarantee by the words "'aval" or "gooda.s ava l;" may set up against a. protected holder only:

(1) The defence, under paragraph 1 (b) of article 30, tha.t the protected holde r obta i ned the signa t u r e on - t.he ins t rumen t of the person for whom he has become a guaranto.r by a fraudulent act;

(ii I The defe.nce, under article 53 or article 57, tha.t. the instrument was not presented for acceptance or for payment;

(11 i) The defence, under article 63, that the instrument was not duly prote.sted for non-accept.ance or for non-payment;

(tv) The defence, under article 84, that a right of action may no longer be exercised a.gainst the person for whom he has become guaranto.q

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(.9.) A guarantor who is not a bank or other ·financial institution and who expresses his guarantee by a signature alone may set up against. a protect.ed holder only the defences .referred to in 5ubpa.ragraph (.E.) ·of this paragraphJ

(.!) A guar.antor which is a bank or other ffnancial insUt.uUon and which expresses its guaran.tee by a s.ignature alone may set up against a protected holder only the defence·s .referred to in subpara.grap.h (.£) of this paragraph.

Article 48

1. payment of an instrument by t.he guarantor in accordance wit:hart.icle 72 diBcha~9'es the party for whom he became guarantor of hls HabUity on the instrument to the extent of the amount paid.

2. The guarantor who pays the instrument may recover .fro.m the party for w.hom

he has become guarantor and from the parties who are liable on it to that party the amount paid and any interest.

CHAPTER V. PRESENTMENT, DISSQNO.IJlL.BX :NON-ACCEPTAlCgOR NON-PAYMENT, AND RECOURSE

Sectlon 1. Pre.sentment foraccept.nce and dishonour by. non-acceptance

Article 49.

1. A bill may be presented for .acceptance.

2. A bill must be presented for acceptance:

(.!) If the drawer has st1pulated in the bill that it must. be presented .fo.t' . acceptance;

(.E.) If the bill is payable at a fixed period after sight; or

(c) If the bIll is payable else~here than at the tesidence or place of busoiness of the drawee, unless it is payable on demand.

Article 50

L The drawer may stipulate in the bill that it must not be presented for

acceptance before a specified date or before the occurrence of a specified event. Ex.cept where a bill must be presented for acceptance under pa.ragraph 2 (12) or (.£) of article 49, the~rawer may stipulate that it must not be presented for acceptance.

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2. If a.. biU is presented for acceptance notwi.thstandlnga stipulation permitted under paragraph 1 of th.1s arti.cle and acoeptance 1s refused, the bill is not thereby disho.noured.

3. If the dr·awee accepts a bill notwithstanding a .stipulation that it must

not be presented for a.cceptance, the acceptanc.e is effectlv·e.

Article 51

A bill is duly presented for acceptance if it is presented in accordance with the following rules:

(!) The holder must p.resen.t the btll to the drawee on a bus.iness d.ay at a reasonable hour,

(.!!.) Presentment for acceptance may be m.adeto a .personor authorityotber than tbe drawee if that per.son. or a.uthority is entitled under the applicable law to accepttbe bill,

(,2)1£8 bill is pa,yable on a-·.fixea-d"at~, p.~eseritmehtfo·r acc_ep.U,nce mus.t.. be. made before or on that date,

(g) A bUI payahl.eon demand or at a fix,ed period after sight must be presented for acceptance within One year of its date)

(_!.) A bUl in whicb the drawer has stated a date or time-limit for presentmen.t for acceptance lIu.st be presented on the sta.ted date or within the stated tille-11m!t.

Article 52

1. A necessary or optional presentmen.t for accept·ance is dispensed. with if:

(A) The drawee Is dead, or no longer has the power freely to deal with his assets b~ reason of his insolvency, or is a fictitious person, or is a person not havi.ng capacity to incur l.iabi.lityon the instrument as an accept.orJor

(b) 'T'hedt'awf"e is a corporation, partnership, association or other legal ent1ty~whlch bas ceased to exist.

2. A necessary presentment for acoeptanc.e is dispensed with if:

(:.!) A bl.ll is payable on a fixed date" and presentment for acceptance cannot be effectec before or on that date due to circumstances which are beyond the control of the holder and which be could neither avoid noroveroome;or

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(.2.) A b ill is payable at a fixed per iod after s i9ht, and present.men t. for a.cceptance cannot be effected within one year ·of its date due to circumstances which are beyond the control of the holder and which he could .neither avoid nor ove.rcome.

3. Subject. to paragraphs land 20f this-article, delay in a neces.sary

presentment fo.r accepta.nce Is excused, but presentment for acceptance is not di.spensed with, if the bill is drawn with a stipUlation that it must be presented for accept.ance within a stated time-Umit, and the delay in presentment for acceptance is caused by circumsta.nces which are beyond the control of the holder and which he could neither avoid nor overcome. When the cause of the dela.y ceases to operate, presentment must be made with rea.sonable diligence.

Article 53

1. If a bill which must be presented for acceptance is not so present.eQ, the

dra.wer, the endorsers and their guarantors are not liable on the bill.

2. Failure to present a bill for acceptance does not ~discha~~e the guara.ntor

of the drawee of liability orr me b-n-t - .~-

Article 54

1. A bill is considered to be d.ishonoured by non-acceptance:

(a) If t.he drawee, upon due presentment, expressly refuses to accept the bUI or acceptance cannot be obtained with reasonable diligence or: if the holder cannot obtain the acceptance to which he is entitled under this Convent.ion,

(bl If presentment fora.cceptance is di.spensed with pursuant to article 52. unless-the bill is in fact accepted.

2. (_!) If a bill is dishonoured by non-acceptance in accordance with

paragraph 1 (_!) of this a.tticle, the holder may exercise an immediate right of recourse against the drawer, the endorsers and their guarantors, subject to the provisions of article 59.

(hI If a bill is dishonoured by non-acceptance in accordan.ce with paragraph 1 <hI of t his art icle , the holder may exe-rc i-ae:--an-----immed-f.-e te ri-qh tof recourse against the drawer, the endorsers and their guarantors.

(clIf a bill is dishonoured by non-acceptance in accordance with paragraph 1 of this article, the holder may claim payment from the guar.antor of the drawee upon any necessary protest.

3. If a bill paYflple on demand is presented for accE!:Ptance, but acceptance

is refused, it is not considered t.o be dishonoured by non-acceptance.

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Sectio.n 2. Presentment for payment and dishonour by non-payment

Article 5S

An instrument is duiy presented for payment if it is present.ed in aceordance with the followin9 rules:

I.!) The holder must present the instrument to the drawee or totheaccepto.[ or to the maker On a business day at a reasonable hour,

Ib) A note signed by two or more makers may be presented to any one of them, unless-the note clearly indicates otherwis·eJ

(£) If the drawee or the aeceptor or t.he maker is dead,p.resentment must be made to t.he persons who under the applicable lawa.re his heirs or the persons entitled to administer his estate;

(B.) Presentment for payment. may be made to a person or authority other than the drawee. the acceptor or the maker if that person orauthodty is entitl.ed under the a.pplicable law to pay-the instrulbent;,-

(e) An instrumentw.hich is not payable on dema.nd must be presen.ted for pllyment on the date of maturity or on one of the two business days which followJ

(f) An inst.rument which Ls payable on demand must be presented for payalent w.ithin-one year of its date;

Is.) An instrument must be presented for paymentl

(1) At the pla.ce of payment specified on the instrument~

(U) If no place of payment .is specified, at the address of the drawee or the acceptor or the maker indicated in the instrument; or

(iii) If no place of payment is specifi.ed and the address of the drawee or the acceptor or the maker is not indicated, at the principal place of

business or habitual residence of the drawee or the acceptor or the maker;

Ih) An instrument which is presented at a clearing-house is duly presented for payment if the law of the place where the clearing-house is located or the rules or customs 0 f thatc lear ing-hou.se so provide.

Article S6

1. Delay in making presentment for paym.ent is excused if the delay is caused by circumstances which are beyond the control of the holder and whic.b he could neither avoid nor overcome. When the cause of the delay ceases to operate, p.resentment must be made with reasonable dili'gence.

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2. Presentment for payment is dispensed with:

(~) If the drawer, an endorser or a guarantor has expressly waived pr eeen tme nt ; such wa i ve r :

(1) If made on the instrument by the drawer, binds any subsequent pa.rty and benefits any holder;

(ii) If made on tbe instrument by a pa.rty other than the drawer, binds only that party but benefits any holder;

(iii) If made outside the instrument, bi.nds only the party making it and benefits only a holder in whose favour it wa.s made;

(,E) If an instrument is not payable on demand, and the cause of de.lay in makIng presentment referred to in paragraph 1 of this article contInues to operate beyond t.hirty days after maturity,

(B.) If an instrument is payable on demand, and the cause of d.elay In making presentment referred to inpar:agrap!:l. 1 of this artIcle continues to operate beyond thirty days after theexpfration of the time-liml~ presentment. for .pavmentl

(:2.) If the drawee, the maker or the acceptor has no longer the power freely to deal with his assets by reason of his insolvency, or is a fictitiousper.son or a person not having capacity to ma.ke payment, or if the drawee, the maker or the acceptor is a. corporation, partnership, associat1.ono.r other legal entity which has ceased to exist;

Cel If there is no place at which the instrument must be presented 1n accordance with subparagraph (.9) of article 55.

3. Presentment for payment is also dispensed with as regards a bill, if the bill has been protested for dishonour by non-acceptance.

Article 57

L I i: an instrument is not duly presented for payment, the d.rawer, the endorsers and their guarantors are not liable on it.

2. Fai lure to present. an i.nstrument for payment does not discharge the acceptor, the maker and their guarantors or the guarantor of the drawee of liability on it.

Article 58

L An instrument is considered to be dishonoured by non-payment:

(i!.) If payment is refused upon due presentment or if the holder cannot obtain the payment to which he is entitled under this Conventi.on;

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(b) If presentment fot payment is dispensed with pursuant to para.graph 2 of article 56 and the instrument is unpaid at maturity.

2. If a bill is dishonoured by non-payment, the holder may, subject to the provisions of article 59, exercise a right of recourSe against the drawer, the endorsers and their guarantors.

3. If a note is dishonoured by non-payment, the holder may, subject t.o the

provisions of article 5 9, exercise a r igh t of recourse aga ins·t the endorsers and their guarantbrs.

Section 3. Recourse

Article 5·9

If an instrument is dishonoured by non-acceptance or by non-payment, the holder may e.xercise a right of recourse only after the instrument has been duly protested for dishonour in accordance with the provisions of articles 60 to 62.

A. Prot.est

Article 60

1. A protest is a st.ateroent of dishonour drawn up a.t the place where the instrument has been dishonoured and .signed and dated bya. person authorized in that respect by the law of that place. The statement must speci.fy:

(.2,) The person at whose request the .instrument is protested;

<.9.1 The place of protest;

(£) The demand made and the answer given, if any, or the fact that the drawee or the acceptor or the maker could not be found.

2. A protest may be made:

(~) On the instrument or on a slip affixed thereto ("allonge"l~ or

(,£) As a ~epara.te documen.t, 1n which case it must clearly identify the instrument that has been dishonoured.

3. Unless the instrument stipulates that protest must be made, a protest may be replac~d by a declaration written on the instrument and signed and dated by the drawee or the acceptor or the make r , or, in the case of an instrument domiciled with a named person for payment, by that named person, the declara.tio.n. must be t.o the effect that ac~eptance or payment is refused.

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4. A declaration made in accordance with paragraph 3 of this article is a protest for the purpose of this Convention.

Article 61

Protest for dishonour of an instrument by non-acceptance or by non-payment must be made on the day on whlcb the instrument is dishonoured or on one of the four business days which follow.

Article 62

1. Delay in protesting an instrument for dishonour is excused if the delay is caused by circumstances which are beyond the control of the holder and which he could neither avoid nor overcome. When the cause of the delay ceases to operate, protest must be made with reasonable diligence.

2. protest for d i.shonour by non-acceptance or by non-p.ayment is dispensed

witb:

(~) If the drawer, an endorser or a guarantor has expressly waived protest; such wa.i vel: I

(i) If made on the instrument by the dra.wer, binds any subsequent party and benefits any bolder;

(ii) If made on the instrument by a party other tban the drawer, binds only that party but benefits any holder;

(iii) If made outside the instrument, binds only tbe party making it and benefits only a holder in whose favour it was made!

(~) If the catise of the delay in making protest referred to in paragraph I ot this article continues to operate beyond thirty days after the date of dishonour,

{£l As regards the drawer of a bill, if the drawer and the drawee or the acceptor are the same person~

(~) If presentment for acceptance or for payment is dispensed with in accordance with article 52 or paragraph 2 of article 56.

Article 63

1. If an lostr ument which must be protested tor non+acc.ept.anca or for non-payment is not duly protest.ed, the drawer, the endorsers and their guarantor s are not liable on it.

2. Failure to protest an instrument does not discharge the acceptor, the maker and their quaranto.es or theg.u.a .. r ant.oz of the drawee of liab.il it.]' on it.

B. Notice of dishonour

Article 64

L The holder, upon dishonour of an instrument by non-acceptance at by non-paym.ent, must give notice of such dishonour:

(~) To the drawer and the last endorser 1

(.2) To a.ll othe.r endorsees and guarantors whose addresses the holder can a~certain on the basis of information contained in the instrUment.

2. An endorser or a 9uara~tor who receives notice must give notice of dishonour to the last party preceding him and liable on the instrument.

3. Notice of dishonour oper at.es fat toe benefit of any party who h.as a right of recourse on the instrument against the party notified.

Article 65

10 Notice of dishonour may be given in any form whatever and in any terms which identify the instrument and state that it has been dishonoured. The return of the dishonoured instrument is suf f i.e ient notice. pr ov ided it 1s accompa.n i.ed by a statement indicating that it has been dishonoured.

2. Notice of diShonour is duly given if it is communicated or sent to the party to be n.otified by means appropriate in the circumsta.nces, whether or not it is received by that party.

3. The burden of proving that notice has been duly given rests upon the person who is required to give such notice.

Article 66

Notice of dishonour must be given wi.thin the two busi-nes.s -days -which follow:

(~) The day of protest 0', it protest is dispensed with, the day of dishonour; or

(~) The day of receipt of notice of dishonour.

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Article 67

1. Delay in 91'11ng notice of dishonour is excused if the delay is caused by circumstances which ar e beyond the control of the person requ1'red to 9ive notice, and which be could neither avoid nor overcome. When the cause of the delay ceases to operate, notice must be given with reasonable diligence.

2. Notice of dishonour is dispensed with;

(~) If, after the exercise of reasonable diligence, notice cannot be givenJ

IE) If the drawer, anendorse.r or a guarantor has expre.ssly waived-notice of dishonour. such waiver:

(i) If. made on the instrument by the drawer, binds any subsequent party and benefits any holder»

(ii) lfmadeon the instrument by a party other than the drawer, binds only that party but benefits any holden

( i ii) 1 f made ou tside the lnstr umen e , bind s on 1 y the pa rt.y -lIIaiting - it - and benefits only a holder in whose favour it was made)

(£) As regards the drawer of the bill, if the drawer and the drawee or tbe acceptor are the same person.

Article 66

If a person who is required to give notice of dishonour fails t.o91ve ittoa party who is entitled to receiv~ it, he is liable for any damages wbich that party may suffer from such f.ailure, provided thatsucb damages do not exceed the amount referred to in article 70 or article 71.

Section 4. Amount pay.able

Article 69

1. The holder may eKercise his rights on the instrument ag.aln .. st anyone

pa r t y , or several or all parties, liable on it and is not obli.ged toobse.rve the order in which the parties have become bound. Any party who takes up and pays the instrument may eXercise his rights in the same manner a.gainSt parties liable to him.

2. Proceed~nqs against a party do not preclude proceedings against any other par ty, whe the r or not subsequent to the par ty or ig. ina11y p.roc.eeded aqa Inst.

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Article 70

1. The holder may recover from any party liable:

(.!I At matue ity: the amount ·o·f the instrument with int.e.rest, if interest has been stipulated tori

(~) After maturity:

(i) T.he amcunt; of the insttument wi til .interest., if interest has been stipula ted for. t.o the date of matul i ty;

(ii) If inter est has been sti pulated t.o be pa ld after matur ity t interest at the rate stipulated, or, in the absence of such stipulation, interest at the ra te spec if i ad in pa r 039 r aph .2 of th is ae Ucle, calculated f rom the da te of. p r eseutment on the sum spec if ied in subpar a9 rap.1l (El ( i) of th is p.ar ag r aph ;

(iii) Any expenses of protest and of the notices g,iven by him.

<£> Before maturity:

(i) Thea.moun t ofth e tnat rumen t with interest, if interest bas .been stipulated for, to the date of payment; or, if no interest bas been stipulated fo.r, subject to a discount from the date of payment to the date of maturity, calculated in accordance witb paragr.ph 4 of tnis artiole;

(il) Any expenses of protest and of the notioes given by him.

2. The ra.te of interest shall be the rate tha.t would be recoverable in legal

proceedings taken in ehe jur isdletion whete the instrument is payable .•

3. ~Otbing in paragraph 2 of this article prevents a court from aw~rdlng

damage.s or compensation for aaditional loss caused to the holder by reason of delay in payment .•

4. The discount shall be at the official rate (discount rate) or other

51 mila.! appropz iate rate ·effect1ve on the date when recourse is exe r e ised at the pla.cewbere the holder has his PI incipal place of bus Iness, or, 1£ he does not have a place of business, his habitual residence, or, it there is no such rate, then at such rate as is reasonable in the circumstances.

Article 71

A party who pays an instrument and is thereby diSCharged in whole or in part of his liability on the instrument may recover from to.e parUes liable to him:

(~) The entire sum which he has paid;

3D -

(~) Interest on that sum at the rate specified in paragraph 2 of article 70, from the date on which he made payment,

(E.) hny expenses of the notices given by him.

CHAPTER VI. DISCHARGE

Section 1. Discharge by payment

Article 72

1. A party is discharged of liability on the instrument when he pays the holder, or a party subsequent t.o himself who has paid ttl.e instrument and is in possess ion of It, the amount due pur.5uanttO article 70, or article 11:

(~) At or after maturity; or

IE) Before maturity, upon dishonour by non-acceptance.

2. Payment before maturity other-than under paragrapK 1 (~) of this article does not discharge the party making the payment of his Uabi.Uty on the instrument except in respect .of. the pe I: son to whom ,paymen t was made.

3. A party is not dlscha . .rged of liability if he pays a holder who is not a

p r'ot.ec ted holder, or a. par t y who has taken up and pa I d the in st r omen t.. and knows a t the time of payment that the holder or that party acquired the instxument by ·theft or forged the signat.ure of the payee or an endorsee. or participated in the theft or the fo.rgery.

4. (~) A person receiv.in.g payment of an i.nstrument must. unless ag.reed

otherwise. deliver:

ti ) To the drawee mak.ing such payment., the instrument.!

(ii) To any other person. making such payment, the instrument, a receipted account, and any protest.

(E:) In the case of an instrument payable by instalments at successive dates. the drawee or a party making a payment, other than payment of the last instalment, may require that mention of such payment be made on the instrument or on a slip aft i xed thereto (n allonge") and that .8rece ipt therefor be given to him.

{.£} If an instrument payable by insta.lmentsat successive dates is dishonoured by non-acceptance or by non-payment as to any of its Instalments and a party, upon dishonour. pays the instalment, the holder wh.o receives such payment must give the party a certified copy of the instrument and any necessary authentica.ted protest in order to enable such par ty to exercise a r Ighton t.he instrument.

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I.e.) The person f~om wh.om payment is demanded. may withhold payment if the person demanding payment does not deliver the instrument to him. Withholding payment in these circumstances does not constitute dishonour by non-payment under a.rticle 58.

(~) If payment is made but. the person paying, other than the drawee, fails to obtain the instrument. such person is discharged but the discharge cannot be set up as a.def.ence against a protected holder to whom the instrument has been subsequently transferred.

Article 73

1. The holder is not obliged to taKe partial payment.

2. If the holder w.ho is o·tf·ered pa.rtial payme.nt does not take it, th.e

instrument is dishonouredbyrion-payment.

3. If the holder takes partia.l payment from the drawee, the guarantor of the

drawee, or the acceptor or the maker:

(.!) The guarantor of t.he drawee, or the accept.or or t.he ma.ker is discharged of his liability on the instrument to the extent of the amount paid~

(.E.l The insttument is to be considered as dishonoured by non-payment as to the amount unpaid.

4 • I f the holder tak.es par t ia.1 payment from a par ty to the ins tr umentother

tha.n the accepeor , the maker or th.eguarantor of the drawee:

(.!) The par ty mak ing payment is di scharg ed of his liabil i ty on the instrument to the extent of the amount paid;

(!!.) The holder must give such party a certified copy of the instrument and any necessary authenticated protest in order to enable such party to exercise a right on the instrument.

5. The drawee ora party making partial payment, may require that mention of SUCh payment be made on the inst.rument and that a receipt therefot be given to him.

6. If the balance is paid, the person who r1!ceivee it and w.ho is in

possession of tbe instrument must deliver to t.he payor the receipted instrument and any authenticated protest.

Article 74

1. The hOlde! may refus·e to take payment at a place other than the place ~here the instrument was presented for payment in accordance with article 55.

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2. In such case it payment is not made at the place where tbe instrument was

presented for payment in accordance with ar ticle S5, the instrument is cons,id,ered to be dishonoured by non-payment.

Article 7S

1. An instrument must be paid in the currency in which the sum payable is ex pressed ..

2. If the sum payable is expressed in a monetary unit of account within the meaning of subparagraph (1) of article 5 and the monetary unit of account is

t r a nsfe.r able be tween the person mak lng paymen t and t.he peraon r ece i v ing it, then, unless the instrument specifies a currency of payment, payment shall be made by transfer of monetary units of account. If the monetary unit of account is not transferable between those persons, payment shall be made in the currency specified in the instrument or, if no such currency is specified, in the cunency of the place of payment.

3. The drawer or the mak.er may indicate in the instrument tha.t it must be

paid in a specified currency other than the currency in which the sum payable is expressed. In that case:

(~l The instrument must be paid in the currency so specifiedJ

(B.) The amount, payable is to be calculated accord.ing to the [·ate of exchanqe indicated in the instrument. Failing such indi.cation, the amount paya.ble is to be calcul~ted according to the rate of exchange for Sight drafts (0[, if there is no such rate, according to the appropriate established rate of exchange) on the date of maturity:

(i) Ruling at the place where th~ instrument must be presented for payment in acco.rdance with subparaqr apn (9) of article 55, if the .speci.f.ied cur.rency is that of that place (local currency)~ or

{iiI If the specified currency is not that of that place, according to the usages of the place where the instrument must be presented for payment in accordance with subparagraph (~) of article 55;

(Sl If such an instrument is diahonoured by non-acceptance, the amount payable is to be calculated:

(i) If the rate of exchange is indicated in the inStrument, according to that rate;

(ii) If no rate of exchange is indicated in fhe instrument, at the option of the holdet, according to the rate of exchange ruling on the date of dishonour or on the date of actual payment;

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(~) If such an instrument is dishonoured by non-payment, the amount payable is to be calculated:

(i 1 If the rate of exchange is indicated in the lnst.rument, according to tha.t rate;

(ii) If no rate of exchange is indicated in the instrument, at the option of the holder, according to the rate of exchange ruling on the date of maturity or on the date of actual payment.

4. Nothing in thisartlcle prevents a court from awarding damages for loss caused to tbe holder by reason of fluctuations in rate.s of excha.n.ge 1£ such loss is caused by dishonour for non-acceptance or by non-payment.

5 • The r a teof exchange r u Ii og a tacer ta i n date is the r a te of excba.nge

ruling, at the option of tbe holder. at the p.lace where the instrum.ent must be p£esented for payment in accordance with subparagraph (3) of article 55 or at the place of actual payment.

Article. 76

L Nothing in this Convention prevents a Contracting State· from enfo.rcing exchan.ge control regulations applicable in its territory and its provisions relat.ing to t.he protection o·f its cur rency, including regulations w.hich it is bound to apply by virtue of international agreement.s to which it is a party.

2 • (_!) If, by vir t ue of the appli.ca Uon of pa rag caph 1 of th is at" tic Ie. an

instrument drawn in a currency which is not that of the place of payment must be paid in local cur r ency , the amount payable is to be calculated .according to the rate of exchange for Sight drafts (or, if there is no such rate, according to the appropr iate established rate of exchange) on the date of p.resentment ruling at. the pla.ce where the instrument must be. p.resented for payment 1n accordance with subparagraph (~) of article 55.

(.2) ( i) I f such an instrument is dishonou.red by non-accept.ance, the amount

payable is to be calculated, at the option of the holder, at the rate of exchange ruling on the date of dishonour or on the date of "actual payment.

(ii) If such an instrument is dishonoured by non-payment. the a.mount is to be caloulated. at the option of the holder, according to the rate of exchanqe ruling on the date of presentment or on the date of actual payment.

(iii) Paragraphs 4 and 5 of article 75 are applicable where appropriate.

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Section 2. Discharge of other parties

Article n

1. If a party is discharged in whole or in part of his liability on the

instrument., any party who has aright on the instrument against him is d isch.arged to the same extent.

2. Payrtl.ent by the dra ..... ee at the whole or a part of the amount of a bill to

the holder, or to any party who takes up and pays the bill. discbarges all parties of their liabHity to the same extent. e.xcept where the dra ..... ee pays a holder who is not a protected holder, or a party w.ho has taken up and paid the bill, and knows at the time of payment that the holder or t.hatparty acqu ired the bill by theft or forged the signature of the payee or an endorsee, or participated in the theft or the forgery.

CHAPTER Vll. LOST INSTRUMENTS

Article 78

I. If an instrument is lost, whether by destruction, theft or otherwise. the

person who lost the instrument has., subject to the provision.s of paragraph 2 of this artlcle, the same right to payment which he would have had if he had been in possession of th.e instrument. The p~rty from whom payment is claimed ca.nnotset up as a defence against liability on th.e instrument the fact that the person claiming payment is not in possession of the instrument.

2. (,!_) The person claiming payment of a lost instrument must state in

writing to the party from whom he claims payment.:

(1) The elements of the lost .inst.rument. pertaining to the requirements set forth in paragraph 1 or paragra.ph 2 of articles I, .2 and 3.1 for this purpose the person claiming payment of the lost instrument. may present to that party a copy of tha.t instrument;

(ii) The facts showing that, if he had been in possession of the instrument, he would have had a. righ.t. to payment tram the party from whom payment is claimed,

(i11) The f·acts wh ich prevent production of the instrument.

(E) The party from whom payment of a lost instrument is claimed may requi£e the person claiming payment to give security in order to indemnify him tor any loss which he may suffer by reason of the subsequent payment of the lost instrument.

(Sl The nature of tne security and its terms are to be determined by ag.reement between the person claiming payment and the party from whom payment is claimed. Failing such an agreement, the court may determine whether securlty is ca lied for and, if so. the na ture of the secur i ty and its terms.

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(~) If the security cannot be given, the court may order the party trom whom payment is claimed to deposi.t the sum ot the lost i.nstrument, and any interest and expenses which may be claimed under article 70 or article 71. with the court. or any other competent authori.ty or institution, and may determine th.e duration at such depostt.. Such depos.lt is to be considered as payment to tbe per son clQim.lng payment.

Arhcl. 79

1. A. party who has paid a lost instrument and to whom the .instrument is subsequently pLesented for payment by another person must give notice of Such presentment to the pe.rson whom he paid.

2. Such notice must be given on the day the instrument is presented or on

one ot the two business days whic.h. tollowaod must state the na.me of the person pres.enting the instrument and the date and place of p.resentment.

3. FaUu.re to give notice renders the party who has paid the lost instrument

liable for any damages which the person whom he paid may suff.e-r frem suen failure, provided that the damages dO not- exceed- the amount- re'ferr-ed···to -In e-rtlc:le q{j-or article 71.

4.. Delay in giving notice is excused when the delay is caused by

circumstances which are beyond the contrel of the pe.r.son who ha.s paid the lost instrument and whic.b he ceuld neither avoid nor ovezeome, When the cause of t.he delay ceases to operate. notice ~ust be given with reasonable diligence.

5. Notice is dispensed with when the cause of delay io giving notice continues to operate beyond thirty days aftex the last day on which it sheuld have been given.

Article 80

1. A. party who has paid a IDst instrument in accordance with the prOV1SiDns of ar t i c Le 78 and who is subsequently required t.o, and does .• pay the instrument, or who. by rea.sonof the loss ot the instrument, then loses his right toncover from any party liable to him, has the right:

(!.) If security was given, to realize the securi.ty~ or

(~) I t an amoun twa s deposited with the cou r t or other cempe ten t au thor it y or institutien. to reclaim the amount so deposited.

2. The person who has gillen security in accordance with the provisions of paragraph 2 (£) of article 78 is entitled to obtain release of the .security wh.en the part.y tor wh.o.se benetit the se.curlty waS given is no longer at clsl< to suffer loss because of the fact t.hat the instrument rs lost.

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ArticleSl

For the purpose of making prot~st for dishonour by non-payment, a person claiming payment of a lost instrument. may use a writt.en statementth.at 6·atisfies the requirements of paragraph 2 (~) of article 7B.

Article 82

.A person receiving pa.yment of a lost instrument in accordance wit.h article 78 must deliver to the party paying the w.[itten statement requi.[ed under

paragraph 2 (~) of art.icle 78, recei.pt:ed by him, and any protest and a. receipted account.

Article 83

1. A party who pays a lost instrument in accordance with article 78 has the same rights which he would have had if he had .been in possession o.f the instrument.

2. Such party may exercise Ms t:ights pnly. If he.1s inpo.ssession. of· ·the

receipted written statement referred to in article 82.

CHAPTER VII I. LIMITATION (PRESCRIPTION)

Article 84

1. A right of action arising on an instrument may no longer be exercised after four years have elapsed:

(_~) Against the maker, or his guarantor, ofa note payable on demand. from the date of the note;

(!2) Aga inst the acceptor or t.he maker or their guarant.or of an instrument

payable at a definite time, from the date of maturity,

(.£) Aqainst the guarantor at the drawee of a bUl payable at a definite time, from the (late of malur ity or, .it the bill is dishonoured by non-acceptance, from tn'e date of prole.st for dishonour or, where protest is dispensed with, from the date of dishonour~

(.9.) Aga inst the acceptor of a. bill payable on demand or his guarantor, from the date on which it was accepted or, if no such date is shown, from the date of the bill,

(_g) Ag.ainst. the gu.aran.tor of the d.rawee of a bill payable on demand, from t.h.e da le on wh ieh he s ig ned the bill or, if no such date. is shown r from the date of t.b.e bill;

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(1) Aga inst the d.rawer or an endorser or their guarantor, f.rom the date of protest for dishonour by non-acceptance or by non-payment or, whete p.rotest 1a dispensed with, from the date at dishonour.

2. II; pa.rty whO pays the instrwn.ent in accord.ance with arti.cle 70 or

at'ticle 71 may exercise his r 19.ht ofacti.on a.gainsta party liable to him w.lthin one year £tom the date on which he paid the instrument.

CRAPTER IX. FINN. PROVJSIONS

Article 8S

The Secretary-General of the United Na.tions is hereby designated as the Depositary for this Convention.

1. This Convention 1s open for Signature by all States at the B.eadquartera of the United Nations, New York, until 30 June. 1990.

2. ThiS Convention is subject to raUfi.c8.tion, 8ccepts.nce or approval by the

signatorY States.

3. This Conventio.n is open for accession by all States which are not

s i9 na t.o.ti' S ta tea as from the date it i sopen .for s 1.9na t u r e •

4. Instruments of ratification, acceptance, appcoval and accession are to be

deposited with the$ecretary-Genel.al of the United Nations.

Article 87

1. If a Contract.ing State has two olmore territorial unitsinwn.icb, accolding to its constitution. different systems of law are applicable in relation to the matters dealt with in this Convent.ion, it may,a.t the time of signature, latific.ation, acceptance, appr ova L or accession, declare that this Convention 1& to extend to all its territorial units or only to one. or more of them, and may amend its declat'ation by submitting another declaration at any time.

2.. Tnese declalations are to be notif.ied t.o the Depositary and are to state.

expressly the territorial units to which the Convention extends.

3. If a Cont.racting State makes no declaration under paragraph 1 .of this article, the Conventi.on is t.o extend to all territ.orial units of that State.

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Article SS

1. Any State may declare at the time of signature, ratification, acceptance, appr ovaI or accession that its courts will apply the Convention only if both the place indicated in the instrument where the bill is drawn, or the note is made. and the place of payment indicated in the instrument are situated in Contracting States.

2. No other reservations are permitted.

Article S9

1. This Convention enters int.ofo,rce on the first day of the month following the expiration of twelve months after the da.te of deposit of the tenth instrument of r at.Lf lcation, acceptance, approval or accesston,

2. When a State ratifies, accepts, approves or accedes to this Convention after the deposit of the tenth instrument of ratification, acceptance, approval or accession, this Convention enters into force in respect of that State on the first day of the month follOwing theexpira.tion of twelVe months after the date of deposit of its instrument of ratification, acceptance, approval or accession.

Article 90

1. 1'J. Contract.ing St.ate may denounce this Convention by a formal notification in writing addressed to the Depositary.

2. The denunciation takes effect on the first day of the month following the expiration of six months after the no·tific.ation is received by the Depositary. Where a longer period for the denunciation to take effect is specified in the

not if Lea t ion, the denunc La t ion taKes ·ef feet upon the expi ra t ion of such longer period after the notification is received by the Depositary. The Convention remains applicable to instruments drawn or made before the date at which the denunciation takes effect.

DONE at N~w York, tnis ninth day of December. one thousand nine hundred and eighty-eight in a ~ingle original, of which the Arabic, Chinese. English, French, Russian and Spanish texts are equally authentic.

IN WITNESS WHEREOF the undersigned plenipotentiaries. being duly authorized by their respective Governments, have signed tnis Convention.

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