SAUDI ARABIA Law and Practice Contributed by: Faisal Daudpota, Daudpota International (in alliance with Khalil Aljehani Law Firm)
10. Additional Maritime or Shipping Issues 10.1 Other Jurisdiction-Specific Shipping and Maritime Issues There is no relevant legal information that has not been dealt with in the foregoing sections.
Key commercial and legal implications in Saudi Arabia include the following. • Shipping and carriage contracts: The Houthi attacks have led to, at minimum, a 20% increase in journey times, as ships avoid the Suez Canal and detour around the Cape of Good Hope. This causes severe, prolonged delays and potential non-delivery or late delivery of goods. • Force majeure and frustration: Suppliers may invoke force majeure clauses to excuse delays, while contracts might be argued as frustrated if performance becomes impossible, though this is a high threshold under Saudi legal principles. • War risk insurance: Shipping insurance premiums have spiked due to the high-risk, unpredictable nature of attacks, increasing operational costs for firms shipping to/from Saudi ports. • Deterioration of goods: Extended transit times due to rerouting (often an additional 10–14 days) pose significant risks for perishable goods and time-sen - sitive cargo, potentially leading to increased claims for cargo damage. • Constructive total loss: If a vessel is seized or trapped for an extended period, it may lead to claims of constructive total loss under marine insurance policies, though this is less common than temporary delays and damage. • Economic impact: The disruption has forced the rerouting of 40% of Europe-bound crude oil via the Cape of Good Hope, increasing transportation costs by roughly USD1 million per voyage.
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