Article 299 of the Saudi Commercial Maritime Law
المادة 299 من النظام البحري التجاري · الفصل الأول: الأحكام العامة
The article provides that the insurance contract is based on good faith, and if either party does not observe it the other has the right to annul the contract.
Official text (Arabic)
This article has not been amended since the law was issued.
يقوم عقد التأمين على مبدأ حسن النية, وإذا لم يراعِ ذلك أي من الطرفين يكون للطرف الآخر حق إبطال العقد.
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 299 explained in plain English
This article sets out the governing principle of the maritime insurance contract: the insurance contract is based on the principle of good faith.
The effect the text attaches to breaching this principle is clear: if either party does not observe good faith, the other party has the right to annul the contract.
Two points should be noted:
- The principle binds both parties: the insurer and the insured. The insured is not the only one required to act in good faith.
- Annulment is a right of the other party, that is, the party that did not breach the principle, and it is for him to decide whether to use it.
The article does not detail the forms of breach of good faith. But Article 300 regulates an important form of it: the insured giving incorrect particulars or remaining silent on material particulars, even without bad faith, where this has led the insurer to assess the risk as less than it truly is, and it allows the insurer in that case to ask for the contract to be annulled.
Article 298 sets a ninety-day period for the insured risk to begin to run. Anyone facing a dispute over good faith in an insurance contract may consult a lawyer specialized in insurance and maritime cases.
Practical example
During negotiations an insurance company concealed from a shipowner in Jeddah a material exclusion in the cover, and he later found out. The shipowner has the right to annul the contract because the insurer did not observe the principle of good faith.
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 299 of the Saudi Commercial Maritime Law
What principle is maritime insurance based on?
The insurance contract is based on the principle of good faith.
What happens if one party breaches good faith?
The other party has the right to annul the contract.
Is the insurer also bound by good faith?
Yes. The text provides that if either party does not observe it, the other party has the right to annul.
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لا يصرح للسفن التي تحمل جنسية المملكة بالسفر إلى المناطق التي تغلب عليها أخطار الحرب, أو أعمال القرصنة أو السطو المسلح, إلا بعد تقديم مالكها أو مجهزها أو مستأجر
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يقع باطلاً كل اتفاق يتم قبل وقوع الحادث الذي نشأ عنه الضرر, ويكون موضوعه أحد الأمور الآتية: 1- إعفاء الناقل من المسؤولية عن هلاك البضائع أو تلفها. 2- تعديل عبء
- Article 236
The carrier must hold insurance or a guarantee from a recognized body covering its liability for death and bodily injury, and the injured party may claim directly against the insurer or guarantor.
يجب أن يكون لدى الناقل تأمين أو ضمان من جهة معترف بها، لتغطية مسؤوليته عن الوفاة والإصابات البدنية. وفي هذه الحالة يجوز للمتضرر الرجوع المباشر على المؤمن أو الض
- Article 293
The article provides that the maritime insurance provisions apply to an insurance contract covering maritime risks, without prejudice to the Law on Supervision of Cooperative Insurance Companies.
دون إخلال بالأحكام الواردة في نظام مراقبة شركات التأمين التعاوني, تسري أحكام هذا الباب على عقد التأمين الذي يكون موضوعه تغطية الأخطار البحرية.
- Article 294
The article requires a maritime insurance contract and any change to it to be proved in writing, sets the particulars of the insurance policy, and makes a provisional policy binding on both parties until the final policy is issued.
1- لا يثبت عقد التأمين وكل ما يطرأ عليه إلاَّ بالكتابة. 2- يصدر بموجب عقد التأمين وثيقة تأمين تتضمن البيانات الآتية: أ- تاريخ عقد التأمين ومكانه. ب- اسم المؤمِّ
- Article 295
The article allows a maritime insurance policy to be issued in the name of the insured, to his order or to bearer, and gives its lawful holder the right to claim compensation, subject to the insurer's defenses against the insured.
1- تكون وثيقة التأمين باسم المؤمن له أو لأمره، أو لحاملها. 2- يكون لحامل الوثيقة الشرعي الحق في المطالبة بالتعويض, وللمؤمِّن أن يحتج في مواجهته بالدفوع التي يجو
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.