Limitation and Exemption of Carrier Liability under Saudi Maritime Law and Judicial Practice
Transport & Insurance Focus
Ahmed HashemPartner, Head of Shipping, KSA
Jamal NattoAssociate,Transport & Insurance
Shipping goods by sea is the backbone of global trade, and Saudi Arabia is no exception. With its strategic location and growing maritime infrastructure under Vision 2030, the Kingdom plays a key role in international shipping. Because of the many parties involved in the shipping process, especially carriers, shippers, and consignees, it is important to clearly define each party’s responsibilities. Among them, the carrier plays a central role, being responsible for safely transporting cargo across long distances and through various risks such as bad weather, handling issues, loading mistakes, and other perils.
In many cases, the shipper or cargo owner may not have the ability to negotiate the detailed terms of the contract, particularly those written into the bill of lading. This often includes clauses about liability, applicable law, and the place where disputes should be resolved. This power imbalance highlights the need for legal protections that safeguard the interests of all parties involved. In Saudi Arabia, these protections are provided by the Saudi Commercial Maritime Law, which was issued by Royal Decree M 33 in 2018. This law outlines the obligations of carriers and specifies the circumstances under which they may be released from responsibility.
According to Saudi Maritime Law, the basic legal rule is that the carrier is liable for any cargo loss, damage, or delay that occurs from the time they receive the goods at the port of loading until they deliver them to the consignee at the port of discharge. However, the law also acknowledges specific circumstances in which a carrier may be exempt from liability, provided they can demonstrate that all necessary precautions were taken, that the incident resulted from the actions of a third party, and that it occurred beyond the carrier’s control. This approach reflects a balanced and equitable legal framework.
The carrier has the burden of proof in these cases. If a carrier wishes to claim exemption under the law, they must provide convincing evidence that shows the damage, or loss was not caused by their actions or negligence. If this evidence is accepted, Saudi courts may uphold the carrier’s exemption and reject the claim brought by the cargo owner. At the same time, the law includes safeguards to ensure that carriers cannot avoid core responsibilities through contractual wording. Specifically, they cannot be released from liability when the damage results from their own fault, and they cannot shift the burden of proof to the other party through the contract. This ensures that essential legal protections cannot be waived.
Saudi courts have generally followed these principles in practice, while still allowing enforcement of valid contract terms that do not go against the Saudi Maritime Law. In our legal practice, we have assisted several international carriers in disputes before Saudi courts, including cases where cargo owners sought compensation for damaged goods. In one case, we represented a well-known international carrier in a dispute filed by a consignee in Saudi Arabia. The claimant relied on the jurisdictional provisions under the Saudi Maritime Law, which permit any claim arising from a contract for the carriage of goods by sea to be filed at the claimant’s discretion in several potential venues, including the defendant’s head office, the place where the contract was formed, the port of loading, the port of discharge, or any other location expressly agreed upon in the contract. The court accepted jurisdiction based on one of these permissible grounds.
We successfully defended the carrier by proving that the cargo damage occurred due to improper stowage by the shipper before the container was sealed. The bill of lading clearly stated that stowage was the responsibility of the shipper. An independent survey report also confirmed that the damage took place prior to shipment. The court accepted this evidence and ruled in favor of the carrier, following the Saudi Maritime Law provisions that support exemption when the cargo interests are at fault.
In a separate matter, we represented another major international carrier in a case involving temperature sensitive cargo. The consignee claimed the goods were damaged due to failure to maintain the required temperature and sought compensation for both the cargo and additional costs. It was established that the carrier had not properly maintained the agreed temperature, and the court found the carrier liable for the cargo damage. However, we presented the bill of lading terms, which stated that the carrier would not be liable for any additional costs beyond the value of the cargo itself. The court upheld this limitation, implying that while a carrier cannot escape its core duties, reasonable contractual limits can be enforced when they are clearly agreed upon.
According to Saudi Maritime Law, the basic legal rule is that the carrier is liable for any cargo loss, damage, or delay that occurs from the time they receive the goods at the port of loading until they deliver them to the consignee at the port of discharge.
These examples illustrate how Saudi courts interpret and apply the Saudi Maritime Law with a practical and balanced approach. While each case is assessed individually based on its specific facts and merits, the determination of carrier liability may differ accordingly. The Saudi courts uphold statutory protections while also allowing for the enforcement of contractual arrangements, so long as they do not contravene mandatory legal provisions. These cases also highlight the importance of maintaining clear documentation, carefully drafting transport contracts, and explicitly allocating responsibilities among the parties involved.
In summary, the Saudi Maritime Law offers a reliable legal structure for determining when a carrier is liable and when they may be exempt. Carriers must act with diligence and care, if they can prove that damage occurred through no fault of their own, and that all precautions were taken, the law supports their exemption. At the same time, cargo interests benefit from legal safeguards that prevent unfair contract terms and ensure accountability when mistakes are made. For both sides, the best approach is to maintain clear and detailed contracts, follow best practices in cargo handling, and keep complete records in case a dispute arises.
If you would like further assistance or need help navigating a maritime claim in Saudi Arabia, we would be pleased to support you. Please feel free to get in touch with us.
For further information,please contact Ahmed Hashem and Jamal Natto.
Published in April 2025
