The Possibility of Pledging Commercial Documents in Iranian and Egyptian Law

Commercial documents are financial instruments indicating money and cash which can be transmitted to others by countersigning. To pledge financial instruments is also a legal action through which, the merchants usually pawn their commercial instruments at a bank and the like to secure their debts or obligations or to earn credits. This model of pledging is one of the most urgent and serious needs in the local or international economic and commercial relations. In many countries, the legislators have provided, in their laws, pledging commercial documents by “countersigning”. In the Iranian law, with regard to the clearness of articles 772 and 774 of civil law, which are based on the famous Imami jurisprudents’ views, the validity of mortgage contract is dependent on the mortgaged property delivery and its being definite object and therefore, to pledge commercial documents is not acceptable. However, with paying attention to the necessity of correct interpretation of laws based on the daily needs and acceptability of the customary delivery as well as the importance of the commercial and secondary laws, we can consider pledging most commercial documents as acceptable. In Egyptian law, too, pledging commercial documents has been accepted under some conditions.