Annulment of a Promissory Note: How to Protect the Creditor’s…

Business entities register promissory notes through banks, and records of these notes are maintained in the registry of the National Bank of Serbia. In cases where the creditor loses the promissory note, the debtor is unable to request its deletion from the registry, which further complicates the legal position of both parties. It is precisely in such situations that business entities, i.e., debtors, initiate proceedings for the annulment of the promissory note, since the notes, used as instruments securing claims, have been lost. In order to protect their rights and prevent potential misuse, debtors file a motion for the annulment of promissory notes, requesting that the court declare the note invalid. Such cases are not uncommon in business practice and highlight the importance of this legal mechanism, which makes it possible to preserve legal certainty and prevent potential financial damage even without the original document.

The annulment of a promissory note represents a form of invalidation of a lost or destroyed note, producing specific legal effects. Any promissory note that has been lost, destroyed, severely damaged, or stolen may be subject to annulment. In addition to the original promissory note, a copy of the note may also be the subject of annulment.

The annulment procedure represents a special type of non-contentious proceeding for the invalidation of a document. A motion for the annulment of a promissory note may be filed by an authorized person who is the lawful holder of the note, as well as by any other person who has a legal interest in having the note declared invalid.

The motion must state the essential content of the missing promissory note and make it plausible that the applicant possessed the note or that a certain right belongs to them on the basis of that note.

In particular, the motion for the annulment of a document includes:

• the essential elements of the document;
• the type of document;
• the business name (company name) and registered seat, or the name and residence of the issuer;
• the amount of the obligation;
• the place and date of issuance of the document;
• the place of performance of the obligation;
• whether it is made out to specific person, to order, to bearer;
• the fact indicating that the applicant is authorozied to submit the motion and that there is a likelihood that the document has been lost or destroyed.

If the submitted information is sufficient, the court issues a public notice setting out the essential content of the promissory note and inviting the person in possession of the note to present it to the court within 60 days. If the note is not presented within this period, the court will declare it invalid upon the expiry of the 60-day deadline. The notice is published once in the Official Gazette. If the same court has territorial jurisdiction, a single motion may request the annulment of multiple promissory notes.

When it comes to calculating time limits, if the payment due date has already passed, the period for presenting the note runs from the date of publication of the notice. If the due date is yet to occur, the period runs from the expiry of that date. In the case of a promissory note payable at sight or at a certain time after sight, and the time limit for presentation has not yet expired, the period for presenting the lost note runs from the last day of the period prescribed for presentation at sight. If the note is not presented within the prescribed period, the court will annul it, after which no rights can be exercised on the basis of that note.

If, during the prescribed period, a person in possession of the promissory note for which annulment has been requested appears, the court will, after hearing the interested parties and presenting the note to the applicant, discontinue the proceedings.

The annulment of a promissory note has significant practical importance, as it ensures the protection of the creditor when the original note is not available. At the same time, it contributes to legal certainty in commercial transactions. Initiating the procedure in a timely manner can play a crucial role in protecting property interests and preventing potential damage.