Article 163 of the Saudi Commercial Maritime Law
المادة 163 من النظام البحري التجاري · الفصل الثالث: إيجار السفينة المجهزة
If the lessor does not collect the rent within three days of warning the lessee, he regains the right to dispose of the ship, while still bound to carry the lessee's goods to the port of arrival at the usual rate, and keeps his right to compensation.
Official text (Arabic)
This article has not been amended since the law was issued.
يسترد المؤجر حقه في التصرف في السفينة إذا لم يستوفِ الأجرة المستحقة له خلال ثلاثة أيام من تاريخ إنذار المستأجر. وفي هذه الحالة يلتزم المؤجر بنقل بضائع المستأجر المشحونة في السفينة إلى ميناء الوصول مقابل أجرة المثل, مع عدم الإخلال بحقه في طلب التعويض.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 163 explained in plain English
This article gives the lessor of a fully equipped ship a quick means of dealing with non-payment of the rent.
First: regaining the right of disposal. If the lessor has not collected the rent due within three days of the date of warning the lessee, he regains his right to dispose of the ship. The warning is a condition, and the period is only three days.
Second: protecting the lessee's goods. Even so, the lessor may not abandon the lessee's goods loaded on the ship; he must carry them to the port of arrival at the usual rate, that is, the customary rate for carrying such goods.
Third: the right to compensation. All this is without prejudice to the lessor's right to claim compensation for the harm he has suffered.
The balance is clear: the lessor is not forced to continue a contract whose rent is not paid, and the lessee's goods are not left midway.
It follows Article 162, which specifies the cases in which the rent is not due, such as loss and force majeure. It is followed by Article 164, which obliges the lessee to return the ship on the end of the charter at the port where it was placed at his disposal. A lessor whose lessee is late in paying is advised to consult a lawyer specializing in maritime and commercial law before giving the warning.
Practical example
A company chartering a fully equipped ship was late in paying the rent, and the lessor formally warned it. Three days passed without payment, so the lessor regained his right to dispose of the ship, but he must carry the company's goods on it to the port of arrival at the usual rate, and he may claim compensation.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 163 of the Saudi Commercial Maritime Law
What can a ship's lessor do if the lessee does not pay the rent?
He warns him, and if he does not collect the rent within three days of the warning, he regains his right to dispose of the ship.
What happens to the lessee's goods on the ship?
The lessor must carry them to the port of arrival at the usual rate.
Does the lessor lose his right to compensation?
No, his right to claim compensation remains.
More articles on Ship Charter
- Article 20
The article permits registering a chartered foreign bareboat ship at the Kingdom's registration offices if the charterer meets the registration conditions, and creates a special temporary register for such ships.
1- تسجل السفينة الأجنبية غير المجهزة -لسفرة أو لرحلة واحدة أو لعدد من الرحلات والسفرات أو لمدة محددة- التي يستأجرها من تتوافر لديه شروط التسجيل بأي مكتب من مكات
- Article 21
The article subjects a chartered foreign bareboat ship registered in the Kingdom to the Kingdom's laws, with the charterer taking the owner's place in the law's obligations and penalties for the whole charter period.
تطبق على السفينة الأجنبية المستأجرة غير المجهزة المسجلة في المملكة، الأنظمة المعمول بها في المملكة، ويحل المستأجر طوال مدة الإيجار محل المالك فيما يتعلق بالالتز
- Article 22
The article requires the charterer of a ship that is not fitted out to apply to cancel its register and return the temporary registration certificate within fifteen days of the end of the charter contract.
يلتزم المستأجر بتقديم طلب شطب سجل السفينة المستأجرة غير المجهزة، وإعادة شهادة التسجيل المؤقتة الخاصة بها خلال خمسة عشر يوماً من تاريخ انتهاء عقد الإيجار.
- Article 23
The article requires the owner of a Saudi ship not fitted out, chartered to a foreigner, to notify the registration office fifteen days before the contract takes effect; registration is suspended or cancelled temporarily and the Kingdom's flag may not be flown during the charter.
في حالة تأجير سفينة سعودية غير مجهزة لأجنبي، فعلى مالكها إبلاغ مكتب التسجيل المسجلة فيه السفينة قبل سريان عقد الإيجار بخمسة عشر يوماً على الأقل، وعلى مكتب التسج
- Article 77
If the charterer manages the ship's navigation and alone is liable for the maritime debt, the ship or the charterer's other ships may be attached, but not the other ships of the lessor-owner.
1- إذا كان مستأجر السفينة يتولى إدارتها الملاحية، وكان وحده مسؤولاً عن أي دين بحري متعلق بها، جاز للدائن توقيع الحجز على هذه السفينة أو على أي سفينة أخرى مملوكة
- Article 142
A ship charter contract can be proven only in writing and must state the ship, the parties, loading and unloading, the rent and compensation and the type of charter, and a sale of the ship does not end the charter.
1- لا يثبت عقد إيجار السفينة إلا بالكتابة, ويجب أن يكون متضمناً اسم السفينة, ومقدار حمولتها, ودرجتها, والدولة التابعة لها، واسم المؤجر والمستأجر، والمكان والزما
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.