Article 278 of the Saudi Commercial Maritime Law
المادة 278 من النظام البحري التجاري · الفصل الثالث: الخسارة البحرية
The Article provides that goods declared at less than their real value contribute to joint loss at their real value, and are accepted in it, if lost, damaged, or missing, only at the declared value.
Official text (Arabic)
This article has not been amended since the law was issued.
البضائع التي قُدم عنها بيان بأقل من قيمتها الحقيقية تسهم في الخسارة المشتركة على أساس قيمتها الحقيقة، ولا يقبل في هذه الخسارة إذا هلكت أو تلفت أو فقدت إلاَّ على أساس القيمة التي ذكرت في البيان.
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 278 explained in plain English
This Article deals with the case of declaring a value lower than the real value of the goods, and sets a rule that prevents their owner from benefiting from that declaration in either direction:
- When contributing to the loss: the goods contribute to the joint loss on the basis of their real value, not the lower declared value. Their owner cannot reduce his share of the loss by this declaration.
- When they are lost, damaged, or missing: they are accepted in the joint loss only on the basis of the value stated in the declaration. He cannot claim more than he declared.
The result is that whoever declares less than the real value bears the worse of both: he pays on the basis of the full value, and is compensated on the basis of the lowered value. The practical lesson is to declare the real value of the goods.
Article 277 excludes from joint loss the loss of goods for which no bill of lading or receipt was issued, and Article 279 provides that unrecorded seamen's and passengers' baggage and mail do not contribute to the joint loss if saved and are accepted in it at their estimated value.
Practical example
A merchant declared an electronics shipment whose real value is SAR 500,000 as SAR 200,000. If it is saved, it contributes to the joint loss on the basis of SAR 500,000. If it is lost, it is accepted in the joint loss only on the basis of SAR 200,000.
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 278 of the Saudi Commercial Maritime Law
What happens if I declare a lower value for my goods?
The goods contribute to the joint loss on the basis of their real value, and are accepted in it, if lost, damaged, or missing, only on the basis of the value stated in the declaration.
On what basis is the goods' contribution to the joint loss calculated?
Goods declared at less than their value contribute on the basis of their real value.
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تستحق أجرة النقل عن البضائع التي يقرر الربان إلقاءها في البحر أو التضحية بها بأي صورة أخرى لإنقاذ السفينة أو الشحنة، مع مراعاة أحكام الخسائر البحرية المشتركة ال
- Article 271
The Article provides that marine loss is governed first by the parties' agreement, then by this chapter's provisions, then by maritime custom where there is neither agreement nor provision.
تسري على الخسارة البحرية التي لم يرد في شأنها اتفاق خاص بين ذوي الشأن؛ الأحكام المنصوص عليها في هذا الفصل, فإن لم يكن هناك اتفاق أو نص في هذا الفصل فتطبق القواع
- Article 272
The Article divides marine loss into joint and particular, presumes a loss is particular unless the person claiming it is joint proves otherwise, and places particular loss on the owner of the damaged thing or whoever bore the expenses, with a right of recourse.
1- تكون الخسارة البحرية إما مشتركة وإما خاصة. 2- يفترض أن الخسارة خاصة, وعلى من يدعي أن الخسارة مشتركة إثبات ذلك. 3- يتحمل الخسارة البحرية الخاصة مالك الشيء الذ
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لا تقبل في الخسارة المشتركة إلاَّ الأضرار المادية التي تصيب السفينة أو البضائع الموجودة عليها, والمبالغ التي تنفق من أجلها، بشرط أن تكون الأضرار أو المبالغ ناشئ
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تعد الخسارة مشتركة حتى لو وقع الحادث الذي نتجت عنه بخطأ أحد ذوي الشأن في الرحلة، وذلك دون إخلال بحق ذوي الشأن الآخرين في الرجوع على من صدر منه الخطأ.
- Article 275
The Article treats as joint loss expenses incurred in place of other expenses that would have been accepted in the loss had they been incurred, provided they do not exceed the expenses not incurred.
تعد خسارة مشتركة المصروفات التي أنفقت بدلاً من مصروفات أخرى كانت تقبل في الخسارة لو أنها أنفقت, بشرط ألاَّ تجاوز المصروفات التي لم تنفق.
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.