Article 303 of the Saudi Commercial Maritime Law
المادة 303 من النظام البحري التجاري · الفصل الأول: الأحكام العامة
The article voids an insurance contract concluded after the things insured were lost or arrived if news of it reached the place of contract or of either party before, and under a good-or-bad-news clause voids it only on proof of personal knowledge.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يقع باطلاً عقد التأمين الذي يبرم بعد هلاك الأشياء المؤمن عليها أو بعد وصولها إذا ثبت أن نبأ الهلاك أو الوصول بلغ قبل إبرام العقد إلى مكان توقيع العقد، أو إلى المكان الذي يوجد فيه المؤمِّن أو المؤمن له.
2- إذا عُقد التأمين على شرط الأنباء السارة أو السيئة, فلا يبطل إلاَّ إذا ثبت أن المؤمن له كان يعلم شخصيًّا قبل إبرام عقد التأمين بهلاك الشيء المؤمن عليه، أو أن المؤمِّن كان يعلم شخصيًّا قبل إبرام العقد بوصول هذا الشيء.
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 303 explained in plain English
This article deals with insuring something whose fate had already been decided before the contract was concluded, by its loss or its safe arrival.
The general rule (Paragraph 1): an insurance contract concluded after the things insured were lost, or after they arrived, is void if it is proved that news of the loss or arrival reached, before the contract was concluded:
- the place where the contract was signed, or
- the place where the insurer or the insured is located.
The "good or bad news" clause (Paragraph 2): if the insurance was concluded on this condition, it is void only if it is proved:
- that the insured personally knew before concluding the contract that the thing insured was lost, or
- that the insurer personally knew before concluding the contract that it had arrived.
The difference is that the general rule is satisfied by news reaching the place, whereas with this clause personal knowledge must be proved. The reason is that insurance is based on a possible risk, so neither party may exploit his knowledge of the outcome. Article 302 deals with the case where the sum insured does not match the value, while Article 304 regulates the liability of several insurers in one contract.
Practical example
A ship sank in the morning and the news reached the city where the owner of the goods is located, and in the evening he concluded an insurance contract on his goods that were aboard. If this is proved, the contract is void. But if the insurance was concluded on a good-or-bad-news clause, it is void only if it is proved that the owner himself knew of the sinking before contracting.
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 303 of the Saudi Commercial Maritime Law
Is insurance valid on goods after the ship has sunk?
It is void if it is proved that news of the loss reached, before the contract was concluded, the place where it was signed or the place where the insurer or the insured is located.
What is the effect of a good-or-bad-news clause?
Insurance concluded on this clause is void only if it is proved that the insured personally knew of the loss before the contract, or that the insurer personally knew of the arrival.
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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
- Article 215
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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.