Article 189 of the Saudi Commercial Maritime Law
المادة 189 من النظام البحري التجاري · الفصل الرابع: عقد النقل البحري : أولاً: أحكام عامة
A letter of guarantee in which the shipper undertakes to indemnify the carrier for issuing a clean bill of lading cannot be invoked against a good-faith third party; the consignee counts as a third party unless he is the shipper.
Official text (Arabic)
This article has not been amended since the law was issued.
1- كل خطاب ضمان أو اتفاق يضمن بمقتضاه الشاحن تعويض الناقل عن الأضرار التي تنتج عن إصدار سند شحن خال من أي تحفظ على البيانات الواردة فيه لا يحتج به قِبَل الغير الذي لا يعلم وقت حصوله على السند بعدم صحة تلك البيانات.
2- يعد المرسل إليه الذي صدر سند الشحن باسمه أو لأمره من الغير إلا إذا كان هو الشاحن نفسه.
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 189 explained in plain English
This article deals with the practice of letters of guarantee in exchange for a clean bill of lading. The carrier may have a reason to enter reservations about the goods' particulars, but the shipper asks for a bill free of reservations and gives in return a letter of guarantee or an agreement undertaking to indemnify the carrier for any harm resulting from this.
The rule: this letter or agreement cannot be invoked against a third party who did not know, when obtaining the bill, that the particulars were inaccurate. A buyer or a bank that relied in good faith on a clean bill is not affected by this side agreement.
Who is a third party? The second paragraph provides that the consignee in whose name or to whose order the bill was issued counts as a third party, unless he is the shipper himself.
The purpose is to protect confidence in the bill of lading; a person dealing in it relies on the particulars it contains, and should not be harmed by a secret agreement between the shipper and the carrier.
The article does not address the effect of the letter between the shipper and the carrier themselves. It is preceded by Article 188, which specifies the lawful holder of the bill. It is followed by Article 190, which allows the master to remove goods not mentioned in the bill or whose particulars are inaccurate. Anyone dealing with letters of guarantee is advised to consult a lawyer specialized in maritime and commercial law.
Practical example
A carrier noticed visible damage to the packaging of a shipment, but the shipper asked for a clean bill and gave a letter of guarantee to indemnify it. A merchant in Jeddah bought the bill without knowing of the damage, so the letter of guarantee cannot be invoked against him.
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 189 of the Saudi Commercial Maritime Law
Can a letter of guarantee be invoked against a buyer of the bill of lading?
It cannot be invoked against a third party who did not know, when obtaining the bill, that the particulars were inaccurate.
Is the consignee a third party?
Yes. The consignee in whose name or to whose order the bill was issued counts as a third party, unless he is the shipper himself.
More articles on Carriage of Goods by Sea and the Bill of Lading
- Article 115
If the master must repair the ship during the voyage, the shipper may wait or take out the goods while paying full freight, with no increase in freight; if repair is not possible, the master hires a substitute ship at his own expense.
1- إذا اضطر الربان إلى إصلاح السفينة أثناء السفر، كان للمستأجر أو الشاحن الخيار بين الانتظار حتى إتمام إصلاح السفينة أو إخراج بضائعه منها، وفي هذه الحالة الأخير
- Article 121
The shipping agent is liable to shippers or consignees for loss of or damage to goods when loaded or unloaded only for the agent's own fault or the fault of those working for the agent.
لا يسأل الوكيل الملاحي من قبل الشاحنين أو المرسل إليهم عن هلاك أو تلف البضائع التي يتسلمها لشحنها في السفينة أو التي يتولى تفريغها منها لتسليمها لأصحابها إلا عن
- Article 122
The cargo agent must preserve the rights of the goods' owners against the carrier; otherwise the agent is presumed to have received the goods in the condition and quantity stated in the bill of lading, unless the contrary is proved by an official record.
يجب على وكيل الشحنة اتخاذ الإجراءات والتدابير اللازمة للمحافظة على حقوق أصحاب الشأن في البضاعة قِبَل الناقل أو متعهد النقل، وإلا افترض أنّ الوكيل تسلم البضاعة ف
- Article 124
The provisions limiting the carrier's liability set out in the Law apply to the transport contractor.
تسري على متعهد النقل أحكام تحديد المسؤولية المتعلقة بالناقل المنصوص عليها في النظام.
- Article 155
The lessor of a fully equipped ship is liable for damage to the goods the lessee places on the ship, unless he proves he fully performed his obligations and the damage did not arise from his fault or that of his subordinates.
يسأل مؤجر السفينة المجهزة عن الضرر الذي يصيب البضائع التي يضعها المستأجر في السفينة, إلا إذا أثبت أنه قام بتنفيذ التزاماته كاملة, وأن الضرر لم ينشأ عن تقصيره أو
- Article 179
A contract of carriage by sea can be proved only in writing.
لا يثبت عقد النقل البحري إلا بالكتابة.
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.