Law No. 23 of 2010 regarding Commercial Activity 

Page 5 of 13

Book Five Financial Bonds

Section One General provisions 

Article 791 

Rights arising out of submission of application 

The bond holder shall have the right to satisfy the right shown in it on its submission. If payment is made by the debtor to the bond holder, he shall be released from his obligation towards the holder even if he is not the holder of the right therein unless the payment is issued in bad faith or a gross error. 

Article 792 

The approved value of the bond 

If the nominal bond value is in letters and the expressed figure are different from the value shown in letter and if it is written several time in letter or figures then the consideration shall be the lowest amount. 

Article 793 

Pleadings vested with the debtor 

The debtor shall have no right to protest against the bond holder except by pleadings related to his personality or those related to the bond as to the former or the content of its expression, as well as the pleadings arising out of the falsification of his signature or detective capacity or representation at bond issuance or non-availability of the necessary elements for exercising the relevant lawsuit. 

The debtor may not protest against the bond holder by pleadings based on personal relation with the previous holders except if the holder intended, when possessing he bond, for causing harm to the debtor himself. 

Article 794 

Possession of the bond in good faith 

Anyone who acquired the possession of the bond in good faith according to the rules organizing its circulation shall not be subject to recovery.

Article 795 

Transfer of rights related to the bond 

Transfer of the bond shall result in transfer of the consequential rights related to it 

Article 796 

Bonds representing the goods 

The bonds representing the goods entitle their holder with the right of claiming for delivery of the goods shown therein, their possession and the validity of disposing thereof through transferring those bonds. 

Article 797 

The necessity of mentioning the restrictions on the bonds 

The mortgage or the attachment or the control or any other restriction on the right showed on the bond on the goods which representing thereof if not recorded on the bond itself. 

Article 798 

Bonds usufructs 

The financial bonds usufruct shall contain the usufruct of regards and other possible benefits and investment of the rewards in a fruitful manner to which the usufructs shall extend. If the both parties did not agree on how to invest them, the same shall be assigned by the competent court of the first instance. In bond mortgage the guarantee shall not extend to the reward and other possible benefits to be resulted from the bond. 

Article 799 

Change of bonds from nominal into bearer bond and vice versa 

The originator of the bearer bond may change them into nominal bonds upon request of the holder and at his cost. The nominal bonds also may be change into the bearer bond upon request of the name holder after verifying his identification and capacity under a formal document, unless the change is expressly prohibited by the originator.

Article 800 

Accumulation and breakdown on bonds 

The bonds issued in a set may be accumulated in one total bond upon request and at the cost of the holder. The total bonds also may be broken down into sub-bonds of small rates. 

Article 801 

Provisions to be applied 

The provision of this book shall be apply in as much as not to conflict with other provisions setout in this law or those provided for in special laws and the special laws shall organize the public debt security, paper money and other similar bonds. 

Article 802 

Documents to which provisions of this book shall not apply 

Provisions of this book shall not apply to documents which intended only for identification of the owner of the right to the legal work or used for allowing transfer of the right without observance of the rights transfer methods. 

Section Two Bearer bond 

Article 803 

Right of the bond holder to the bearer 

The bond shall be transferred to the bearer as soon as received. The legitimacy of the bond holder to bearer shall be established in exercising the right established thereon once presented the bond itself. 

Article 804 

Bonds including obligation to pay an amount 

The bonds which include an obligation to pay an amount shall not be issued the bearer except in the cases allowed by law.

Article 805 

Replacement of the inappropriate bond 

If the bond became inappropriate for circulation, its holder may return it back and obtains another substitute bond from its originator as long as its features are sufficient for recognizing thereof, provided that the holder shall bear the expenses. 

Article 806 

Lost or stolen bonds 

The bearer bond shall not be considered as good as a total loss once it was lost or stolen unless otherwise provided for in special law. 

However, anyone who declares the originator of loss or theft of a bearer bond and presents an evidence thereof shall have the right to persist in the legal rights arising out of the lost bond and its attachment after expiry of the fixed term for considering the bond as a total loss. 

The debtor shall be relieved from his obligation, if he paid the bond holder the right arising out thereof prior to expiry of the said term unless it is proved that he was in knowledge of the defect in possession. 

If the lost or stolen bonds were bearer shares, the court may permit anyone who informed of the loss or theft to exercise the rights related thereto even prior to expiry of the prescription term until the shares appear, with imposition of a guarantee if necessary. In any way the rights of the declarer on the bond holder shall always be observed. 

Article 807 

Total loss of the bond 

The holder of the bearer bond shall have the rights to claim the originator to give him a copy of the bond or a similar bond if he proved the total loss of the original bond and the expenses shall be at the applicantís cost. If a decisive evidence of the total loss of the bond is not provided, the provisions of the previous article shall be applied.

Section Three Bonds to the order 

Article 808 

Legitimacy of possessing a bond to the order 

The legitimacy of possessing a bond to the order shall be established by successive revolving and shall result in exercising the legal right shown in the bond. 

Article 809 

Revolving validity 

The revolving must be written down on the bond and signed by the revolver. The revolving shall be valid even if the name of the revolver is not mentioned on it. 

The bearer revolving shall be considered as a revolving on blank. 

Article 810 

Inadmissibility of revolving restriction 

Any condition limiting the revolving shall be considered null and void, and the partial revolving shall be considered invalid. 

Article 811 

Revolving effects 

The revolving shall transfer all the rights arising out of the bond. If the bond is revolved in blank, its holder may fill in the blank by writing his name or another personís name; he may also revolve it again or transfer it to a third party without filling in the blank or without new revolving. 

Article 812 

The revolver is not bound by fulfillment 

The revolver shall not be accountable for non-fulfilling of the legal right shown on the originator, unless there is a provision in the law or a condition in the bond stipulates to the contrary.

Article 813 

Revolving the bond for receiving it 

If the revolving is restricted on proxy for payment, then the revolvee shall have the right to exercise all the rights related to the bond except revolving it again except on basis of a proxy. 

The originator shall have no right to protest against the revolvee by proxy except through the pleading with which he shall protest towards the revolver. The effectiveness of the revolving by proxy shall not expiry by the death of the revolver or his disqualification afterwards. 

Article 814 

Revolving on the basis of the guarantee 

If the revolving contains an expression to the effect of the mortgage or the guarantee, the revolvee may exercise all the rights related to the bond. 

If he revolved it the revolving shall be considered as issued as a proxy. 

The originator may not protest against the revolvee on the basis of the guarantee by the pleadings based on his personal relations with the revolver unless the revolvee has intended, on receiving the bond, to course harm to the originator. 

Article 815 

Acquiring a bond for the order without revolving 

Possession of a bond to the order without revolving method shall result in a draft effects. 

Article 816 

Procedure for considering the bond as good as lost 

In case of loss, misappropriation or total loss of the bond, the holder thereof may inform the debtor of the fact and shall claim for consideration of the bond as good as lost by resorting to the chief of the court of the first instance at the area of payment. 

The essential data of the bond must be laid down in the application, if the bond is in blank the sufficient data shall be mentioned in order to recognize it.

Having taken the actions necessary for becoming aware of the validity of the facts and the holderís right the chief of the court shall issue a resolution considering the bond as good as lost, and shall permit payment thereof after thirty days from the date of circulation of the resolution as per the legally established methods, unless the bond bearer protests there against during such term. 

If the bond term is not matured, then the payment term shall be from the date of the maturity time. 

Anyone who requested consideration of the bond as good as lost should informthe debtor formally of the resolution; he should circulate it also as per legally established methods. 

Article 817 

Mode of objection 

The bearer should bring his objection to the court which has issued the resolution, with authorization of the claimant and the debtor to be present and no objection shall be accepted unless the bond is lodged at the process- server office. 

If the objection is rejected, the bond should be delivered to the claimant to whom the resolution of consideration of the bond as good as lost was issued in his favor. 

Article 818 

Precautionary measures 

The claimant may, during to the established term for considering the lost or stolen or totally lost bond as goods as lost, take all the arrangements leading to maintenance of his rights. 

If the bond is of mature term or of due payment of sight, he shall have the right to claim for its payment with submission of a guarantee or deposit the amount judicially. 

Article 819 

Expiry of the term without making objection 

If the established term for considering the bond as good as lost, its force shall be dropped down with exception of the right of its bearer towards the party who obtained the resolution.

The latter may claim for payment of the bond value if he presented the court order and a certificate of the process servers office confirming non-existing of objection. 

If the bond is in blank or not matured, he may obtain a copy of the lost bond. 

Section Four Nominal bonds 

Article 820 

Rights of the bond nominee 

The legitimate possession of the nominal bond shall be confirmed by setting out the name of the holder on the body of the bond and in originator register and thus resulting in exercise of the legal right shown in the bond. 

Article 821 

Transfer of the nominal bonds 

The nominal bond shall be transferred through entering the name of the party who acquired it on the bond itself and in the originator register or through giving new bond in the name of the party to who it passed. The giving of the new bond must be confirmed by entering it in the register. 

The party who claimed for nomination of the bond in the favor of another person or by giving him new bond in the name of that person, he should confirm his identification and legal capacity for disposal by a certificate issued by a notary public or by a party authorized by the law. 

If the party who acquired the bond itself claiming for nomination or giving of a new bond and confirms his right by a formal paper. 

The originator shall revolve in the register and on the bond under his responsibility and shall be relieved from responsibility if he completed transfer of the bond through the methods shown in this article unless committed an error therein,

Article 822 

Transfer of nominal bond through revolving 

Without prejudice to provisions of the law a nominal bond may be transferred also through revolving approved by a notary public or any person authorized by the law. 

The date of the revolving must be written down and signed by the revolver and shall contain data about the revolver. If the value of the nominal bond is nominal bond is not paid in full the revolver must signed thereof. 

The transfer through revolving shall not be valid towards the originator unless after recording in the register. 

The revolvee shall have the right to obtain entry of the bond transfer in the originator register if he confirmed his possession of the bond upon a connected series of revolving. 

Article 823 

Bond restriction procedure 

Any restriction on the right shown in the bond shall have no effect towards the originator and the third party, unless this restriction is recorded on the bond and on the register under a certificate issued by the notary public according to the previous provisions. 

Article 824 

Nominal bond usufructs right 

Any one who have the right of usufructs of the right shown on the nominal bond, he may obtain a bond separated from the original bond. 

Article 825 

Establishment of the mortgage on nominal bond 

A mortgage may be established on a nominal bond through delivery and revolving thereof coupling with a condition (for guarantee) or a like. 

The revolvee (for guarantee) may not transfer the bond to a third party except through revolving thereof by proxy.

Article 826 

Consideration of the nominal bond as good as lost 

In case of loss or theft or irredemption of the bond, the party whose the bond is in his name or the revolvee shall notary the originator thereof and shall claim for considering the bond as good as lost according to provisions regarding the bearer bonds. In case of loss, or theft or irredemption of nominal shares, the party who claimed thereof shall exercise the rights related to the shares during the established term with submission of a guarantee when necessary. 

The final guarantee issued for considering the bond as good as lost shall terminate the bond without prejudice to the right of the bearer thereof.