Article 324 of the Saudi Commercial Maritime Law
المادة 324 من النظام البحري التجاري · الفصل الأول: الأحكام العامة
The article 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.
Official text (Arabic)
This article has not been amended since the law was issued.
يحل المؤمِّن محل المؤمن له في جميع حقوقه التي نشأت بمناسبة الأضرار التي يشملها التأمين, وذلك في حدود التعويض الذي دفعه.
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 324 explained in plain English
This article sets the rule of subrogation: the insurer is subrogated to the insured in all his rights that arose from the damage covered by the insurance.
In practice this means that if the insurer pays compensation to the insured, and the insured has a right against another person because of the same damage (such as a carrier who damaged the goods, or a ship that caused a collision), the insurer takes his place in that right and may claim against that person.
The limit of subrogation: it is within the limit of the compensation the insurer paid, so he cannot claim from the third party more than he paid.
The condition of subrogation is that the rights arose from the damage covered by the insurance.
Article 323 allows a ruling that the insured loses his right to the insurance if he gave, in bad faith, a declaration about the accident that does not conform to the truth and harmed the insurer, while Article 325 sets the period after which claims arising from the insurance contract are not heard at two years, including the claim against the insurer because of recourse by a third party.
Practical example
An insured shipment belonging to a company in Jeddah is damaged because of the carrier's fault, and the insurer pays it compensation of SAR 200,000. The insurer is subrogated to the shipment-owning company in its rights against the carrier, within the limit 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 324 of the Saudi Commercial Maritime Law
Can the insurance company claim from the party who caused the damage after paying me?
Yes. The insurer is subrogated to the insured in all his rights that arose from the damage covered by the insurance.
Can the insurer claim more than he paid from a third party?
No. Subrogation is within the limit of the compensation he paid.
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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
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
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.