Compiled from: Shouguang City People's Court

Case Review

On November 23, 2021, Company C, as the drawer and acceptor, issued an electronic commercial acceptance draft to payee Company D, with a face amount of 1.01 million yuan and a maturity date of November 23, 2022. The draft was subsequently endorsed and transferred to Companies E, B, and A in order. On November 15, 2022, Company A presented the draft for payment to Company C through the bill transaction management platform, but Company C failed to fulfill its payment obligation to Company A. The platform processing result showed "Transaction Processing," the transaction business status displayed "Pending Response," and the bill status showed "Payment Presentment Pending Acceptance."

On April 24, 2023, Company A sued Companies B, C, D, and E in Shouguang Court, requesting a judgment ordering the four companies to pay Company A the bill amount of 1.01 million yuan plus interest.

After trial, Shouguang Court held that Company A obtained the electronic commercial acceptance draft in question based on a sales contract with Company B, making it the lawful holder of the draft and entitled to bill rights.

Ultimately, the Shouguang Court ruled that Companies B, C, D, and E shall jointly pay Company A the face value of the electronic commercial acceptance bill of 1.01 million yuan and interest (calculated at 1.01 million yuan as the base, from November 23, 2022, to the date of repayment, based on the one-year loan market prime rate published by the National Interbank Funding Center in November 2022) within ten days from the effective date of the judgment.

Negotiable Instruments Law of the People's Republic of China

Article 19

A bill of exchange is a negotiable instrument issued by the drawer, entrusting the payer to pay unconditionally a determined amount to the payee or holder at sight or on a specified date. Bills of exchange are divided into bank bills and commercial bills.

Article 53

A holder shall present the bill for payment within the following time limits:

(1) For a bill of exchange payable at sight, the holder shall present it for payment to the drawee within one month from the date of issue;

(2) For a bill of exchange payable on a fixed date, at a fixed period after issue, or at a fixed period after sight, the holder shall present it for payment to the acceptor within ten days from the date of maturity.

If the holder fails to present the bill for payment within the time limit prescribed in the preceding paragraph, the acceptor or drawee shall still be liable to pay the holder after the holder provides an explanation.

Presentment for payment to the drawee through a collecting bank or through the bill exchange system shall be deemed as presentment for payment by the holder.

Article 68

The drawer, endorser, acceptor, and guarantor of a bill of exchange shall be jointly and severally liable to the holder. The holder may exercise the right of recourse against any one, several, or all of the persons liable on the bill, without regard to the order of their liability.

Article 70

When exercising the right of recourse, the holder may demand the person against whom recourse is sought to pay the following amounts and expenses:

(1) The amount of the draft that has been dishonored;

(2) Interest on the draft amount calculated at the interest rate prescribed by the People's Bank of China from the maturity date or the date of presentment for payment to the date of settlement;

(3) Expenses incurred in obtaining the relevant certificate of dishonor and in issuing notices.

When the person against whom recourse is sought settles the debt, the holder shall deliver the draft and the relevant certificate of dishonor, and issue a receipt for the interest and expenses received.

"Measures for the Administration of Electronic Commercial Draft Business"

Article 59

If the holder presents the draft for payment before its maturity date, the acceptor may pay or refuse to pay, or pay on the maturity date. If the acceptor refuses to pay or fails to respond, the holder may present the draft for payment again after the maturity date.

[4] Author's Opinion

With the widespread use of electronic commercial drafts, drafts with consecutive endorsements are common, and it is not uncommon for holders of electronic commercial drafts to present them for payment before the maturity date. So, does the act of a holder presenting a draft for payment before the maturity date truly have legal effect?

In this case, the holder presented the electronic commercial acceptance draft for payment through the electronic commercial acceptance draft system before the maturity date, and the system displayed "Payment presentation pending acceptance." This payment presentation status persisted until after the maturity date (existing throughout the entire payment presentation period). The acceptor remained inactive in responding or handling the matter throughout the entire payment presentation period, which should be deemed as the acceptor's refusal to pay upon maturity. Thus, the holder's expression of intent to present the draft for payment "before the maturity date" has the same legal effect as presenting it "within the payment presentation period," and the holder may exercise the right of recourse against the drawer, endorser, and acceptor of the electronic commercial acceptance draft. To promote an honest and trustworthy business environment, maintain stable transaction order, and reduce social transaction costs, the court supports the holder's claim in accordance with the law.

The legislative purpose of the "Negotiable Instruments Law of the People's Republic of China" is to regulate negotiable instrument activities and protect the legitimate rights and interests of parties involved in such activities. The provision requiring payment presentation "within ten days from the maturity date" is intended to urge holders to exercise their rights under the draft in a timely manner and cannot be used to deprive holders of their right of recourse against prior parties. The act of a holder presenting a draft for payment before the maturity date produces the same legal effect as presenting it within the payment presentation period, which aligns with the legislative intent of the "Negotiable Instruments Law of the People's Republic of China" and meets the requirements of the fairness principle under the "Civil Code of the People's Republic of China." This is of great significance for maintaining the order of the negotiable instrument market and promoting the high-quality development of the socialist market economy.