Maritime and air shipping disputes in Saudi Arabia: carrier liability for cargo loss, damage and delay under the Commercial Maritime Law and the Montreal Convention, compensation limits, notice and claim periods, ship arrest, and the competent court.
A container arrives at Jeddah port a month late with damaged goods, or part of an air shipment goes missing in transit. With Red Sea disruption and many vessels rerouted around the Cape of Good Hope, voyage times have risen by at least 20%, and shipping disputes have grown with them. The problem is that most claims are lost not because the right is weak, but because a short notice period or a time bar the trader did not know about has passed.
In this guide we explain sea and air carrier liability, compensation limits, the deadlines you must respect, the steps to claim, precautionary arrest of ships, the competent court, and mistakes that defeat your claim.
The Laws Governing Sea and Air Shipping in Saudi Arabia
- The Commercial Maritime Law, issued by Royal Decree No. M/33 on 5 Rabi' II 1440H (12 December 2018) and in force 180 days after publication. It is Saudi Arabia's first standalone maritime trade law, governing contracts of carriage by sea, bills of lading, charters, maritime incidents and ship arrest.
- The Montreal Convention for the Unification of Certain Rules for International Carriage by Air, to which the Kingdom is a party, governing the air carrier's liability for cargo on international flights.
- The contract of carriage and the bill of lading or air waybill: which identify the parties, the terms of carriage and the dispute forum.
- The Commercial Courts Law and the Arbitration Law for resolving disputes.
The Commercial Maritime Law requires certain maritime contracts to be in writing, including contracts of carriage by sea, or they are void.
Sea Carrier Liability and Compensation Limits
The sea carrier is liable for loss of, damage to, or delay in delivering the cargo from receipt until delivery, unless it proves a ground of exemption. But its liability is capped unless the cargo's value is declared before shipment:
| Item | Sea carriage | International air carriage |
|---|---|---|
| Compensation limit | 666.67 SDR per package, or 2 SDR per kilogram, whichever is higher | A per-kilogram limit under the Montreal Convention and its periodic revisions |
| Exceeding the limit | By declaring the cargo's value in the bill of lading | By a special declaration of value and paying any supplementary charge |
| Time to sue | One year from delivery or its due date | Two years from arrival or its due date |
The special drawing right (SDR) is a unit of account issued by the International Monetary Fund, and its riyal value changes daily. Declaring the value of high-value shipments, or insuring them, is the real protection, as the statutory cap may cover only a small part of their value.
Deadlines That Defeat Your Claim If Missed
Air Cargo
- Damage: a written complaint to the carrier within 14 days of receipt.
- Delay: a written complaint within 21 days of the cargo being placed at the consignee's disposal.
- Lawsuit: within two years of arrival or the date it should have arrived.
Sea Cargo
- Notice: record a written reservation on receipt if damage is apparent, and notify the carrier immediately on discovering hidden damage.
- Cargo claim: within one year of delivery or the date delivery should have taken place.
- Maritime liens: are extinguished after one year unless a lawsuit is filed or the ship is arrested within that period.
Golden rule: never accept cargo without inspection, and never sign a "clean" delivery receipt if there is visible damage.
Steps to Claim Compensation for Damaged or Lost Cargo
- Document the damage immediately: photos of the container, seals and goods, and an independent surveyor's report where possible.
- Record your reservation on the delivery receipt or receiving report.
- Send written notice to the carrier or its agent within the deadline.
- Notify your insurer if the cargo is insured; the claim may be faster through them, and they then take your place against the carrier.
- Gather documents: bill of lading or air waybill, commercial invoice, packing list, certificate of origin and correspondence.
- Submit the claim to the carrier, and if it is rejected or ignored, file suit before the time bar.
Precautionary Arrest of Ships
If you have a maritime claim against a shipowner, such as for supplies, repairs or cargo damage, you can request a precautionary arrest of the ship while it is in a Saudi port, to secure your claim before it sails. Commercial courts deal with arrest applications urgently, and the applicant must file the substantive case within the short period set by law.
Releasing an arrest requires liquid financial security, and courts have rejected non-cash security such as a property title deed. Arrest therefore requires speed and careful preparation of documents before the ship arrives or leaves.
The Competent Court and Arbitration
Commercial courts hear commercial maritime and air disputes. If the contract of carriage, bill of lading or charterparty contains a valid arbitration clause, the court refers the dispute to arbitration. The Saudi Center for Commercial Arbitration is among the bodies that hear maritime disputes.
Note that many bills of lading issued by international shipping lines contain a jurisdiction clause pointing to foreign courts or arbitration. Review the bill's terms before shipment, not after damage occurs. For litigation procedures, read our guide to filing a commercial lawsuit, and our guide to commercial arbitration in Saudi Arabia.
Mistakes That Cost You Cargo Compensation
- Accepting cargo without inspection or signing a clean receipt despite damage.
- Missing the notice period for air cargo: 14 days for damage and 21 for delay.
- Missing the one-year time bar for sea cargo while negotiating with the carrier.
- Not declaring the value of high-value cargo, so compensation is limited to the statutory cap.
- No cargo insurance.
- Suing the wrong party: the freight forwarder instead of the actual carrier, or vice versa.
- Ignoring the jurisdiction clause in the bill of lading.
- Omitting the Incoterm in the sales contract, so it is unclear who bears the risk in transit. See our guide to international commercial contracts.
When Do You Need a Lawyer in a Shipping Dispute?
- To claim for damaged, lost or delayed cargo, or to arrest a ship, see our sea and air transport service.
- For court representation, request our commercial court representation service, or for arbitration our commercial arbitration hearings service.
- To review supply contracts and shipping terms before contracting, read our guide to supply agreements in Saudi Arabia.
- To assess your claim before the deadline passes, book an in-office legal consultation.
Frequently Asked Questions
What is the time limit for a sea cargo damage claim?
A cargo claim against the sea carrier must be brought within one year of delivery or the date delivery should have taken place; otherwise the right to claim generally lapses.
What is the maximum compensation from a sea carrier for cargo?
666.67 special drawing rights per package or shipping unit, or 2 units per kilogram of gross weight, whichever is higher, unless the cargo's value was declared before shipment.
What is the notice period for air cargo damage?
Under the Montreal Convention, a written complaint must be made within 14 days of receipt for damage and within 21 days of the cargo being placed at the consignee's disposal for delay, and the action must be brought within two years.
Can a ship be arrested in Saudi Arabia?
Yes. A precautionary arrest of a ship can be requested from the commercial court to secure a maritime claim, and the court deals with the request urgently, with the claimant required to file the substantive case within the statutory period.
Where are shipping disputes heard in Saudi Arabia?
Commercial courts hear commercial maritime and air disputes, unless the contract or bill of lading contains a valid arbitration clause, in which case the dispute is referred to arbitration.
Damaged or delayed shipment? The deadline runs from the day of receipt
We document the damage, send notices on time, claim against the carrier or insurer, request ship arrest where needed, and represent you before commercial courts and arbitration.
info@novalegal.sa | Al Sahaba Road, Al-Ishbiliyah District, Riyadh
Conclusion: Shipping Disputes Are Decided in the First Days
In sea and air shipping disputes, being right is not enough. Notice periods are short, the time to sue is one year for sea and two years for air, and compensation is capped unless you declare the value. Whoever documents damage immediately, sends notice on time and knows the competent court preserves their full claim.
The Nova Legal team in Riyadh offers our sea and air transport service to importers, exporters and shipping companies, from contract review to claims and litigation. Address: Al Sahaba Road, Al-Ishbiliyah District, Riyadh – Building 2/2 Al Hamra City, Second Floor, Office 202.