Article 300 of the Saudi Commercial Maritime Law
المادة 300 من النظام البحري التجاري · الفصل الأول: الأحكام العامة
The article allows the insurer to ask for the insurance to be annulled for incorrect or withheld particulars that led it to assess the risk as less than it truly is, and the court may award it the premium or up to half of it.
Official text (Arabic)
This article has not been amended since the law was issued.
1- للمؤمِّن أن يطلب إبطال عقد التأمين إذا قدم المؤمن له -ولو بغير سوء نية- بيانات غير صحيحة, أو سكت عن تقديم بيانات جوهرية تتعلق بالتأمين, وكان من شأن ذلك في الحالتين أن قدر المؤمِّن الخطر بأقل من حقيقته.
2- للجهة القضائية المختصة أن تحكم للمؤمِّن في الأحوال المبينة في الفقرة (1) من هذه المادة بمبلغ مساوٍ لقسط التأمين إذا أثبت سوء نية المؤمن له, أو بمبلغ لا يتجاوز نصف هذا القسط إذا انتفى سوء النية.
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 300 explained in plain English
This article regulates the case of incorrect or withheld particulars from the insured at the time of contracting.
The right to annul (Paragraph 1): the insurer may ask for the insurance contract to be annulled if:
- the insured gave incorrect particulars, or
- he remained silent on material particulars relating to the insurance,
and in both cases this was such that the insurer assessed the risk as less than it truly is. This right arises even if the insured acted without bad faith.
The sum awarded to the insurer (Paragraph 2): the competent judicial authority may award the insurer in these cases:
- a sum equal to the insurance premium if the insurer proves the insured's bad faith.
- a sum not exceeding half of the premium if bad faith is absent.
So the difference between good faith and bad faith does not affect the right to annul, but it does affect the sum awarded. This article is a specific application of the principle of good faith set by Article 299. Article 301 requires the insured to notify the insurer within three working days of circumstances that arise and increase the risk. To assess your position in a particular case, it is advisable to consult a lawyer specialized in insurance and maritime cases.
Practical example
A shipowner in Dammam insured his ship without mentioning that it had suffered major damage to its engine months earlier, so the insurance company assessed the risk as less than it truly is. The company may ask for the contract to be annulled, and the competent judicial authority may award it a sum equal to the premium if it proves his bad faith, or not exceeding half of it if bad faith is absent.
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 300 of the Saudi Commercial Maritime Law
Can the insurance company annul the contract if the particulars were wrong in good faith?
Yes. The insurer may ask for annulment if the insured, even without bad faith, gave incorrect particulars or remained silent on material particulars, and this led the insurer to assess the risk as less than it truly is.
How much is awarded to the insurance company on annulment?
The competent judicial authority may award it a sum equal to the insurance premium if it proves the insured's bad faith, or a sum not exceeding half of the premium if bad faith is absent.
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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
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- Article 295
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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.