Article 62 of the Saudi Commercial Maritime Law
المادة 62 من النظام البحري التجاري · الفصل الثالث: الرهن البحري
The article permits the mortgage of a ship under construction, provided the registration of the mortgage is preceded by a declaration at the registration office stating the place of construction, the length and dimensions of the ship and its approximate tonnage.
Official text (Arabic)
This article has not been amended since the law was issued.
يجوز رهن السفينة في طور البناء، ويجب أن يسبق قيد الرهن إقرار في مكتب التسجيل يبين فيه محل بناء السفينة وطولها وأبعادها الأخرى وحمولتها على وجه التقريب.
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 62 explained in plain English
This article permits mortgaging a ship before its construction is complete, which helps finance shipbuilding projects, since the financier can obtain security over the ship while it is still being built.
But the article sets a procedural condition: the registration of the mortgage must be preceded by a declaration submitted to the registration office, stating:
- The place where the ship is being built.
- Its length and other dimensions.
- Its approximate tonnage.
The purpose of this declaration is to identify the mortgaged ship sufficiently, because it is not yet complete and has not been registered as an existing ship.
Article 63 complements this rule by providing that a mortgage on a ship under construction must be registered at the registration office and that the regulations specify the registration and proof procedures. Article 61 explains that a mortgage on a ship remains over its wreck and does not include sums such as insurance compensation unless expressly agreed. A person entering into financing for the building of a ship would do well to consult a lawyer specializing in maritime and commercial law.
Practical example
A Saudi company is building a supply vessel at a shipyard and asks a bank for financing in return for a mortgage on it. Before the mortgage is registered, the company submits a declaration to the registration office stating the place of construction and the ship's length, dimensions and approximate tonnage, and then the mortgage is registered.
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 62 of the Saudi Commercial Maritime Law
Can a ship that has not been completed be mortgaged?
Yes. The article permits the mortgage of a ship under construction.
What must be submitted before registering the mortgage of a ship under construction?
A declaration at the registration office stating the place where the ship is being built, its length and other dimensions, and its approximate tonnage.
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.