SAUDI ARABIA Law and Practice Contributed by: Faisal Daudpota, Daudpota International (in alliance with Khalil Aljehani Law Firm)
ance sheets. These are often structured to be Sharia- compliant, frequently using Ijara structures where the owner sells the vessel to a financier and leases it back, with an option to repurchase at the end of the term. 3. Marine Casualties and Owners’ Liability 3.1 International Conventions: Pollution and Wreck Removal In Saudi Arabia, the liability of ship-owners and inter - ested parties for pollution and wreck removal is gov - erned by a combination of international conventions ratified by the Kingdom and domestic laws, most notably the Commercial Maritime Law of 2019 (Royal Decree No M/33). The legal framework emphasises strict liability for pollution and wreck removal, with requirements for compulsory insurance. Applicable international conventions Saudi Arabia has ratified several key IMO Conven - tions: • Nairobi International Convention on the Removal of Wrecks (2007) – ratified by Saudi Arabia, this Convention holds registered owners strictly liable for the costs of locating, marking and removing ships that pose a hazard in their territorial waters or exclusive economic zone (EEZ); • MARPOL 73/78: Saudi Arabia has acceded to Annexes I–V and the Protocol relating to Annex VI, covering pollution from oil, noxious liquids, sewage and garbage; • International Convention on Civil Liability for Oil Pollution Damage (CLC), 1969 and 1992 Protocols – governs the liability of tanker owners for oil pol - lution damage, establishing a strict liability regime and requiring insurance; • International Convention on Civil Liability for Bunker Oil Pollution Damage (Bunkers Conven - tion) – ensures compensation for pollution dam - age caused by spills of oil carried as fuel in ships’ bunkers; and • 1996 Protocol amending the1976 Convention on Limitation of Liability for Maritime Claims (LLMC) – acceded to on 6 April 2018, this framework allows
ship-owners to limit their liability for certain claims, including pollution and wreck removal.
Relevant Domestic Laws These include the following.
• The Commercial Maritime Law (Royal Decree No M/33, 2019): This is the primary legislation apply - ing to Saudi-flagged vessels and foreign vessels in Saudi waters. It covers vessel registration, owner - ship, liability and marine insurance. • Maritime Zones Law (Royal Decree No M/6): Defines Saudi sovereignty and rights over its ter - ritorial sea, EEZ and continental shelf, providing the jurisdictional basis for enforcement. • General environmental regulations: Prohibit unau - thorised pollution of territorial waters, the seabed and subsoil. • Saudi Aramco Oil Ports and Terminals Rules: Spe - cific, stricter rules apply to terminal operations at Ras Tanura, Ju’aymah, etc. Liability for Pollution Under CLC and Bunkers Conventions, the registered owner is strictly liable for pollution damage. Ships of 1,000 gross tonnage and above (bunkers), and tank - ers, must maintain insurance covering their liability. Claimants can take direct action against the insurer. Liability for Wreck Removal The registered owner is strictly liable for the costs of locating, marking and removing the wreck if it consti - tutes a hazard. If the owner fails to remove a wreck, and in urgent cases, the Saudi authorities can remove the wreck and recover costs. The Nairobi Convention requires ships of 300 GT or more to carry a wreck removal insurance certificate. Limitation of Liability While Sharia law (the foundation of the legal system) generally allows full compensation, the 2019 Com - mercial Maritime Law incorporates the 1996 Protocol to the LLMC Convention, which enables ship-owners to cap their liability for wreck removal and pollution claims.
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