Section 259 Investments and Securities Act

Section 259 of the Investments and Securities Act 2025 is about Rights derived from negotiation. It is under Part XV (Commodities Exchange and Warehouse Receipts) of the Act. It provides as follows:

(1) A warehouse receipt holder shall acquire after negotiation as provided under this Act —
(a) title to the warehouse receipt;

(b) title to the commodities, including, to the extent that such activities are authorised by the depositor and noted on the warehouse receipt, the packed,
processed, substituted or otherwise transformed commodities of the depositor;

(c) all rights accruing under the law, including rights to commodities delivered to the warehouse operator after the warehouse receipt was issued;
(d) the obligation of the warehouse operator to hold or deliver the commodities according to the terms of the warehouse receipt and any related storage agreement fee; and
(e) liability to pay outstanding storage charges, advances and other fees endorsed on the warehouse receipt.

(2) Title and rights acquired under subsection (1) are not invalidated by the surrender of the commodities by the warehouse operator.

(3) Where a warehouse receipt is negotiable, no person shall have a lien by virtue of any judicial process to commodities in the possession of a warehouse operator except where —

(a) a warehouse receipt is originally issued upon delivery of the commodities by a person who had no power to deposit the commodities; or
(b) the receipt is first surrendered to the warehouse operator or its negotiation is ordered by the Tribunal or a court, and the warehouse operator shall not be compelled to deliver the commodities in accordance with any judicial process until the receipt is surrendered to the warehouse operator or made a subject of litigation before the Tribunal or a court.

(4) A person who purchases a warehouse receipt for value without notice of the judicial or arbitral process takes the commodities free of the lien imposed by the judicial or arbitral process without removing the liability of the transferor to any claim against him in that respect.