Negotiating Order Bills of Lading under Saudi Law:

A Critical Appraisal of the 2018 Commercial Maritime Law and the 1964 Commercial Papers Law

Shaya Al Olayan

 

Abstract: The bill of lading (BL) is a cornerstone of international trade, functioning not only as a receipt for goods and evidence of the contract of carriage but also as a document of title and a security instrument representing the goods. Recognising its pivotal role, most jurisdictions—including Saudi Arabia—have sought to regulate the BL through international conventions and domestic legislation, notably the 2018 Commercial Maritime Law (CML). However, the CML does not explicitly govern the negotiation of BLs; instead, it refers to the provisions of the 1964 Commercial Papers Law (CPL), initially designed for negotiable instruments such as bills of exchange and checks. This article critically evaluates the suitability of applying the CPL’s endorsement provisions to BLs, highlighting the doctrinal and functional disparities between commercial papers and BLs. Through a doctrinal analysis, it argues that while the current legal framework addresses certain aspects of BLs, significant challenges arise from the fundamental differences in their legal nature and commercial function. These challenges hinder the effective implementation of endorsement mechanisms in maritime transactions, potentially compromising the protection of bona fide holders. To address these shortcomings, the article proposes targeted reforms to the CML, including clarifying mandatory particulars, establishing legal consequences for non-compliance, and refining liability and endorsement rules. These reforms aim to align the legal treatment of BLs with their commercial realities, thereby enhancing their reliability as trade instruments and safeguarding the interests of legitimate holders.