Article 338 of the Saudi Commercial Maritime Law
المادة 338 من النظام البحري التجاري · الفصل الثاني: التأمين على السفينة
The article continues ship insurance for the benefit of the new owner or charterer on condition the insurer is notified within fifteen days, and regulates the insurer's right to terminate and suspension of the insurance if no notice is given.
Official text (Arabic)
This article has not been amended since the law was issued.
1- إذا انتقلت ملكية السفينة, أو أُجِّرت غير مجهزة, استمر التأمين لمصلحة المالك الجديد أو المستأجر, بشرط أن يبلغ المؤمن بذلك خلال خمسة عشر يوماً من تاريخ انتقال الملكية أو من تاريخ الإيجار، ولا يحسب في هذا الميعاد أيام العطل الرسمية. وعلى المالك الجديد، أو المستأجر, أن يقوم بجميع الالتزامات التي كانت على عاتق المؤمن له قِبَل المؤمِّن بمقتضى عقد التأمين.
2- يجوز للمؤمِّن أن يطلب فسخ العقد خلال شهر من تاريخ إبلاغه بانتقال الملكية أو الإيجار، وفي هذه الحالة يستمر العقد قائماً مدة خمسة عشر يوماً من تاريخ طلب الفسخ.
3- يبقى المؤمن له الأصلي ملزماً قِبَل المؤمِّن بدفع أقساط التأمين المستحقة حتى تاريخ انتقال الملكية أو تاريخ الإيجار.
4- إذا لم يقع الإبلاغ بانتقال الملكية أو الإيجار في الميعاد المنصوص عليه في الفقرة (1) من هذه المادة, يعد التأمين موقوفاً من تاريخ انتهاء هذا الميعاد، ويعود عقد التأمين إلى إنتاج آثاره بعد انقضاء أربع وعشرين ساعة من حصول الإبلاغ، ويلتزم المؤمن برد قسط التأمين عن مدة توقف العقد.
5- لا تسري أحكام هذه المادة في حالة ملكية السفينة على الشيوع إلاَّ إذا شمل انتقال الملكية أغلب الحصص.
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 338 explained in plain English
This article regulates what becomes of the insurance if ownership of the ship is transferred or it is let without being equipped:
- Continuation of the insurance: it continues for the benefit of the new owner or the charterer, on condition that the insurer is notified within fifteen days of the transfer of ownership or the letting, not counting official holidays. The new owner or charterer is bound by all the obligations of the insured toward the insurer.
- The insurer's right to terminate: he may ask to terminate the contract within a month of being notified, and the contract remains in force for fifteen days from the date of the request to terminate.
- Earlier premiums: the original insured remains bound to pay the premiums due up to the date of the transfer of ownership or the letting.
- Failure to notify in time: the insurance is considered suspended from the date the time limit ends, and resumes producing its effects twenty-four hours after notification; the insurer must refund the premium for the period of suspension.
- Co-ownership: these provisions apply only if the transfer of ownership covers most of the shares.
Notifying on time is what ensures cover is not interrupted. Article 337 treats the ships of one operator as if they belonged to different operators, and Article 339 applies the provisions of the chapter on ship insurance to insurance limited to the period the ship is in a port, anchorage or dry dock. Anyone selling or buying a ship can consult a lawyer who specializes in maritime cases.
Practical example
A company in Dammam buys an insured ship from its previous owner. For the insurance to continue for its benefit, the insurer must be notified within fifteen days, in which official holidays are not counted. If notification is late, the insurance is suspended from the end of the time limit, then resumes twenty-four hours after notification, with refund of the premium for the period of suspension.
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 338 of the Saudi Commercial Maritime Law
Does the ship's insurance pass to the buyer?
Yes. The insurance continues for the benefit of the new owner on condition that the insurer is notified within fifteen days of the transfer of ownership, and official holidays are not counted.
What happens if I do not notify the insurance company in time?
The insurance is considered suspended from the date the time limit ends and resumes producing its effects twenty-four hours after notification, and the insurer refunds the premium for the period of suspension.
Can the insurance company terminate the contract after the sale?
It may ask for termination within a month of being notified, and the contract remains in force for fifteen days from the date of the request to terminate.
More articles on Marine Insurance
- Article 139
Ships carrying the Kingdom's nationality are not permitted to sail to areas dominated by the dangers of war, piracy or armed robbery until proof of insurance of their crew against these dangers is provided.
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.