March 12, 2020

COVID-19 Saudi Arabia: Transportation and shipping sectors update

Saudi Arabia recently enacted measures to control the spread of COVID-19, which have an impact on ports of entry. The position is developing day-to-day. This article outlines the Kingdom's current position in detail and the business impact to consider.

Current position

Earlier this week, the Kingdom of Saudi Arabia (KSA) closed all land borders for people travelling between the KSA and Kuwait, the UAE and Bahrain. This restriction did not apply to commercials vehicles or vehicles carrying commercial goods, which are subject to strict screening procedures at the dryports / land borders.

On 9 March 2020, the Ministry of Foreign Affairs announced the suspension of the travel for KSA citizens and KSA residents to and from the UAE, Kuwait, Lebanon, Syria, South Korea, Egypt, Italy and Iraq. We understand that this also includes the suspension of travel of non-KSA citizens from these countries to the KSA. Following this measure, the KSA Ministry of Foreign Affairs announced (on the same day) that the KSA suspended all travel by air and sea between the KSA and the listed countries, save for (a) evacuation purposes, (b) commercial shipping, and (c) trade purposes.

The Saudi Ports Authority (MAWANI) also issued a circular on 9 March 2020 to all the ports, agents and port operators. In summary, the circular provided that the following preventive measures had been put in place for vessels (and crew) coming to the KSA and calling at KSA ports including:

  1. Temporary suspension of all voyages between the KSA and the UAE, Kuwait, Lebanon, Syria, South Korea, Egypt, Italy and Iraq except for (a) evacuation purposes, (b) commercial shipping, and (c) trade purposes;
  2. Suspension of all travel of KSA citizens and KSA residents to and from the UAE, Kuwait, Lebanon, Syria, South Korea Egypt, Italy and Iraq who arrive directly from these countries, or who were there in the last 14 days prior to their arrival in the KSA.
  3. Suspension of crew changes on all types of vessels that arrive in the KSA from the UAE, Kuwait, Lebanon, Syria, South Korea, Egypt, Italy and Iraq directly, or who were there in the last 14 days prior to their arrival in the KSA.

We understand that the above measures do not apply to vessels or crew coming from other countries but those vessels and crew are subject to strict screening (all crew are screened and tested for COVID-19) before the vessel or crew are allowed to enter the KSA and there is an obligation on the Master to declare if any of the crew are infected by COVID-19 or are displaying any symptoms of COVID-19.

The Ministry of Foreign Affairs has further confirmed that the KSA had suspended the travel of KSA citizens and KSA residents to Oman, France, Germany, Turkey and Spain. We understand that this also includes travel of any individuals from these countries to the KSA, though it is unclear whether these restrictions also apply to vessels and crew as MAWANI (at the time of publication of this update) had not issued any further circulars. We would not be surprised if the above restrictions are extended to these countries.

Impact

The suspension of crew changes (specifically for (a) crew coming from the UAE, Kuwait , Lebanon, Syria, South Korea, Egypt, Italy, Iraq , Oman, France, Germany, Turkey and Spain, (b) crew that have visited these countries within the last 14 days, or (c) ships coming from these countries) has the potential to have a significant impact on the shipping, transportation and trade sectors.

The current circumstances raise various legal issues, for example:  force majeure, off-hire, deviation, demurrage etc. Many contracts and bills of lading have clauses that deal with these issues and other clauses (for example infections disease – Clause 25 of SUPPLYTIME 2017 – and restraint of princes clauses) but whether or not one can rely on them will depend on (a) the exact wording of the clause(s) and other clauses in the contract(s) and bill(s) of lading, and (b) the facts and circumstances relating to each incident / issue. In addition, one will also need to consider the governing law of the contract(s) and bill(s) of lading as the concept of force majeure is quite different under KSA law when compared with English law.

We are closely monitoring the situation with the relevant authorities, Club correspondents and ship agents. We will provide further updates as the situation develops and changes.  

In the meantime, please do not hesitate to contact us if your business is impacted (or is likely to be impacted) by COVID-19 or the changes noted above.

 

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