Article 323 of the Saudi Commercial Maritime Law
المادة 323 من النظام البحري التجاري · الفصل الأول: الأحكام العامة
The article allows a ruling that the insured loses his right to the insurance in whole or in part if, in bad faith, he gave a declaration about the accident that does not conform to the truth and the insurer suffered damage as a result.
Official text (Arabic)
This article has not been amended since the law was issued.
إذا قدم المؤمن له -بسوء نية- تصريحاً غير مطابق للحقيقة فيما يتعلق بالحادث, وترتب عليه ضرر للمؤمِّن، جاز الحكم بسقوط حقه في التأمين كله أو بعضه.
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 323 explained in plain English
This article sets a penalty for false declarations about the accident. A ruling may be made that the insured loses his right to the insurance in whole or in part if four conditions are met together:
- The insured gives a declaration that does not conform to the truth.
- The declaration is about the accident.
- It is made in bad faith.
- It causes damage to the insurer.
An unintentional mistake is not enough, and bad faith alone is not enough if it caused no damage to the insurer.
Note that the article says a ruling may be made, so the loss is not automatic, and it may be total or partial according to what is assessed in each case.
Article 322 requires the insured, when notifying his wish to abandon, to declare all insurance contracts he made or knows to exist, and Article 324 provides that the insurer is subrogated to the insured in all his rights arising from the damage covered by the insurance, within the limit of the compensation he paid. A person facing an allegation of an untrue declaration should consult a lawyer who specializes in insurance.
Practical example
Insured goods are damaged, and their owner deliberately claims that the damage was caused by a storm in order to benefit from the coverage, whereas it was caused by something else, so the insurer pays compensation he would not otherwise have paid. A ruling may be made that he loses his right to the insurance in whole or in part.
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 323 of the Saudi Commercial Maritime Law
What happens if I give the insurance company false information about the accident?
If this was done in bad faith and caused damage to the insurer, a ruling may be made that the insured loses his right to the insurance in whole or in part.
Do I lose my right if I made a good-faith mistake?
The article requires bad faith and damage to the insurer for a ruling of loss to be possible.
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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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Any agreement made before the incident that exempts the carrier from liability for loss of or damage to the goods, alters the burden of proof placed on him, or assigns to him the rights arising from cargo insurance is void.
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
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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.