Article 61 of the Saudi Commercial Maritime Law
المادة 61 من النظام البحري التجاري · الفصل الثالث: الرهن البحري
A ship mortgage remains in force over its wreck, and it does not extend to freight, subsidies, compensation or insurance sums unless there is an express agreement, accepted in writing by the insurers, on the insurance sum.
Official text (Arabic)
This article has not been amended since the law was issued.
1- الرهن المقرر على السفينة أو على حصة منها يبقى سارياً على حطامها.
2- لا يسري الرهن المقرر على السفينة على أجرة النقل، أو الإعانات، أو المكافآت، أو المساعدات التي تمنحها الدولة، أو مبالغ التعويضات المستحقة للمالك عن الأضرار التي تلحق بالسفينة، أو تعويضات التأمين، ومع ذلك يجوز الاتفاق في عقد الرهن صراحة على أن يستوفي الدائن حقه من مبلغ التأمين بشرط قبول المؤمَّنين لذلك كتابة.
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 61 explained in plain English
This article specifies what the maritime mortgage covers and what it does not. If a ship or a share in it is mortgaged and then sinks or is wrecked, the mortgage does not lapse; it remains in force over the wreck, and the mortgagee creditor may collect his right from it.
On the other hand, the mortgage does not extend to other sums connected with the ship, namely:
- Freight.
- Subsidies, rewards and assistance granted by the State.
- Compensation due to the owner for damage to the ship.
- Insurance compensation.
However, the article permits one exception: that it is expressly agreed in the mortgage contract that the creditor may collect his right from the insurance sum, provided that the insurers accept this in writing. An agreement between the mortgagor and the creditor alone is not enough.
This rule is linked to Article 60, which regulates the mortgage of a co-owned ship, and to Article 62, which permits mortgaging a ship under construction. A person who finances the purchase of a ship or mortgages one would do well to consult a lawyer specializing in maritime and commercial law when drafting the mortgage contract.
Practical example
A financier in Jeddah financed the purchase of a cargo ship and took a mortgage on it to secure the loan, and then the ship sank. The financier keeps the mortgage over the wreck, but may not collect its right from the insurance compensation unless the mortgage contract expressly so provides and the insurance company agreed in writing.
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 61 of the Saudi Commercial Maritime Law
Does a ship mortgage lapse if the ship sinks?
No. A mortgage on a ship or a share in it remains in force over its wreck.
Can the mortgagee creditor take his right from the insurance compensation?
The mortgage does not extend to insurance compensation at all, unless the mortgage contract expressly so agrees and the insurers accept this agreement in writing.
Does a ship mortgage include freight?
No. The article provides that the mortgage does not extend to freight or to State subsidies, rewards and assistance.
More articles on Maritime Liens and Mortgages
- Article 46
The article lists the debts that carry a maritime lien on the ship, from court costs and crew employment debts to fees, salvage rewards, compensation and the master's contract debts.
تشمل حقوق الامتياز على السفينة ما يأتي: 1- المصروفات القضائية التي أنفقت لحفظ السفينة وبيعها وتوزيع ثمنها. 2- الديون الناشئة عن عقد عمل الربان والبحارة وغيرهم م
- Article 47
The article provides that maritime liens on a ship are not subject to any formality or any special requirement of proof.
لا تخضع حقوق الامتياز لأي إجراء شكلي، أو لأي شرط خاص بالإثبات.
- Article 48
The article specifies the property that the Article 46 liens attach to: the ship, the freight of the voyage that gave rise to the debt, and their accessories, with a special rule for the paragraph 3 lien.
1- تترتب حقوق الامتياز المنصوص عليها في المادة (السادسة والأربعين) على السفينة، وأجرة النقل الخاصة بالرحلة التي نشأ عنها الدين، وعلى ملحقات كل من السفينة، وأجرة
- Article 49
The article defines what counts as accessories of the ship and the freight subject to the lien, such as compensation for unrepaired damage and salvage rewards; passenger fares count as freight; insurance compensation and State subsidies are excluded.
1- يعد من ملحقات السفينة وأجرة النقل المنصوص عليها في الفقرة (1) من المادة (الثامنة والأربعين) ما يأتي: أ- التعويضات المستحقة للمالك عن الأضرار المادية التي لحق
- Article 50
The article provides that the lien on freight remains as long as the freight is payable or is held by the master or the owner's representative, and likewise the lien on the accessories of the ship and the freight.
يبقى حق الامتياز على أجرة النقل قائماً ما دامت الأجرة مستحقة الدفع، أو كانت تحت يد الربان أو ممثل المالك، وكذلك الحال بالنسبة إلى الامتياز على ملحقات السفينة وم
- Article 51
The article sets the ranking of liens for a single voyage in the order of Article 46, with proportional sharing within one paragraph, reverse chronological order for paragraphs (4) and (6), and one date for rights arising from one incident.
1- تُرتب حقوق الامتياز المتعلقة برحلة واحدة وفقاً للترتيب الوارد في المادة (السادسة والأربعين) من النظام. 2- تكون للحقوق المذكورة في كل فقرة من المادة (السادسة
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.