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Khurram Ali
Partner
Khurram is an English-qualified Partner at Stephenson Harwood with specialist knowledge of the KSA, UAE and UK markets. His practice focuses on the maritime, transportation and oil and gas sectors. He has spent nearly a decade advising clients in Saudi Arabia on matters involving KSA and English law, as well as the laws of other GCC jurisdictions.
With over two decades of experience, Khurram supports shipping businesses on disputes concerning debt recovery, charterparties, commodity sale and purchase contracts, and contracts of affreightment. These include issues relating to seaworthiness, off-hire, withdrawal from hire, safe ports and berths, early redelivery and off-specification bunkers. He also advises on ship arrests, general average, groundings, collisions and allisions, and cargo claims. He manages disputes in the KSA courts, the High Court in London and courts throughout the UAE, and represents clients in arbitrations under LMAA, ICC, LCIA, DIAC and AAA rules.
Alongside his disputes practice, Khurram advises shipping businesses and banks on asset finance and other transactions. He also drafts and negotiates maritime contracts, including port and terminal agreements.
Chinar Zaidi
Managing Associate
Chinar is a Managing Associate at Stephenson Harwood with a particular focus on asset and offshore finance. She has advised on some of the most complex, cross-border and widely publicised transactions in the region.
With a practice spanning the Middle East, Asia and Europe, Chinar has acted for many of the world’s leading financial institutions, shipowners and lessors. Her expertise covers the full spectrum of non-contentious maritime work, including syndicated and bilateral financings, vessel sales and acquisitions, sale and leasebacks, restructurings, leasing arrangements, shipbuilding contracts and registration and flagging matters. She also plays a key role in the firm’s global yacht and superyacht team, advising on the commercial and financing aspects of yacht transactions.
Known for her efficiency in managing multi-jurisdictional transactions, Chinar is praised by clients for her responsiveness, clarity, and proactive approach to solving complex issues. Her positive, solutions-focused mindset and practical style ensure clients feel supported at every stage of a deal.
Resilience, investment and the road ahead
The past year has seen geopolitical tensions in the Middle East and beyond. Amongst many others, some of the major factors that impacted vessel owners and financiers were the increase in war risk premiums for maritime insurance and the cancellations of many charterparties relating to vessels operating in the region. Notwithstanding these tensions in the region, the Kingdom has continued to invest in maritime infrastructure and shown extraordinary adaptability and resilience. The Kingdom has focussed not only on its Vision 2030 goals on the growth of the maritime and logistics sector and its aim to position itself as a global logistics hub, it has also had to evolve to meet the challenges posed by the geo-political tensions and the closure of the Strait of Hormuz.
Building on the insights from last year’s article, this update explores the latest market trends that are influencing the sector.
The Kingdom has launched various new maritime related initiatives in line with its Vision 2030 but also to tackle the challenges relating to supply chain and movement of vessels in the region. A good example of the Kingdom’s continued investment in the sector include:
- Mawani’s seven agreements with national and international companies relating to logistics centres at ports in Jeddah and Al Khumra aimed at expanding the port operations.
- Mawani has also announced five projects worth more than $612.6 million earlier this year to expand port and logistics infrastructure at Jubail Commercial Port and King Abdulaziz Port in Dammam.
- Saudi Arabia’s National Shipping Company has recently announced an exceptionally strong first half of its financial year, with net profit up more than 420 percent year on year. The company also has an order book that includes 12 new tankers spread across various different segments for the coming years. It has also announced the launch of a newbuild programme for two dual fuel LNG-powered container vessels with an additional option for two more units. The vessels will be equipped with alternative marine power, enabling zero emissions during port stays.
- The Kingdom also activated its East / West pipeline to deal with the closure of the Strait of Hormuz which allows the Kingdom to still export oil via the Red Sea at a relatively high capacity.
All of these initiatives show that the market and the country remain committed to growing the shipping and transport sector in line with its 2030 initiative and there is investment in this sector.
Banks and maritime funds operating in the region seem to be cautious yet optimistic and we see that notwithstanding usual business prudence in a time of geopolitical uncertainty, the interest in investing in the maritime sector remains strong. We have seen that whilst the region continues to respond to the geopolitical challenges, foreign maritime investors remain keen to explore the Saudi markets and continue to look at the market’s potential, further fuelled by the government’s growth strategy. At the same time, there is also continued investment by local KSA and regional banks in the maritime sector with many local banks providing maritime finance (both conventional and Shariah based) to shipping companies from KSA with the vessel providing security for the loan as explained in the previous article. Security provided usually includes (amongst other things), a first priority mortgage over the vessel, an assignment of the insurances, the earnings (and possibly including a specific assignment of any long term charterparties) of the vessel along with parent company guarantees or personal guarantees Banks are also carefully reviewing the war risk insurance of ship owning companies, and we see that this is a compulsory insurance that most banks now require the vessels being financed to have in place if they are operating in this region.
In the previous article, we have also touched upon the Kingdom’s commitment to achieving net zero emissions by 2060 and that shipping companies in the Kingdom are likely to align their operations with the country’s climate change related goals. In our view, this should also attract international financiers that are keen to focus on green and sustainability linked loans for fleet expansions and port development.
Whilst we see the Kingdom’s shipping companies such as the National Shipping Company of Saudi Arabia (Bahri) investing in aligning their fleet with the Vison 2030 environmental vision of the country, this may also be a good opportunity for foreign lenders looking to partner with companies that are focussed on their environmental targets and for the companies in the region to attract another source of ship finance and a different structure for their financing. Although this is still in its early stages, we think this will be an angle that could attract more foreign maritime lenders to the region which vessel owners can explore.
Separately, in the previous article, we mentioned that the Kingdom’s maritime law states that no vessels other than Saudi flagged vessels may engage in activities related to towage or pilotage or to offer services in the maritime zones of the country and may not engage in costal transportation between the ports in the country unless specifically permitted to do so by the authorities. There is currently an exception in place where the Saudi authorities are allowing foreign flagged vessels to operate in Saudi waters until 09 January 2027. This is the second such exemption that has been granted by the authorities (the previous one expired in 2024). It still remains to be seen if a further exemption will be granted beyond 09 January 2027. We will continue to monitor this as it may have an impact on the vessels that operate in KSA waters and in turn, the financing of these vessels.
To conclude, the past year has been dominated by the geopolitical issues in the region and their economical impact but despite the heightened tensions, increased war risk premiums and disruptions to trade routes, the Kingdom has retained its focus on developing the maritime sector in line with its Vision 2030.
Looking ahead, we forecast another year of growth for the maritime sector in the region, which will require more ship or maritime related financing and investment. The integration of sustainability into ship finance could become a key differentiator for the Kingdom as it seeks to establish itself as a regional maritime hub. The outlook for ship finance in the Kingdom remains promising because of the combination of government support, increasing local and regional bank participation, and growing interest from international lenders which creates a resilient financing ecosystem and provides vessel owners and shipping companies a variety of sources of ship finance support.
