On 28 February 2026, the US and Israel undertook massive air strikes against Iran who immediately responded with large scale missile and drone attacks on countries around the Persian Gulf including Saudi Arabia, Qatar, Bahrain, the UAE and Kuwait.

Although initial targets were not maritime-related the ensuing conflict has caused widespread disruption to shipping in and around the Persian Gulf and raised important questions for both Owners and Charterers concerning their rights and obligations under Charterparties. Of particular concern is the partial closure of the Straits of Hormuz through which vessels entering and exiting the Persian Gulf must pass.

On 1 March the UK insurance market issued a Notice of Cancellation of War Risks relating to the following areas.

• Iran and Iranian waters including coastal waters up to 12 nautical miles offshore.
• Persian and / Arabian Gulf and adjacent waters including the Gulf of Oman.

This decision indicated the high level of risk to vessels in the above areas and in this article, we explore how these high risk levels have impacted the legal position under both Time and Voyage Charterparties.

Time Charters: The Safe Port Warranty

Of particular relevance to the legal position under Time Charters is the law related to safe ports. A substantial proportion of time charters will include an express obligation on the part of Charterers to only nominate safe ports. If there is no such express wording, then under certain circumstances one may be implied.

The effect of such a term is that if Charterers nominate a port that is unsafe then Owners are entitled to refuse to follow such orders and request alternative orders. Refusal to do so may constitute a repudiatory breach of contract giving Owners the right to terminate and claim damages.

If after orders have been given to proceed to a port it subsequently becomes unsafe then a time charterer will be required to give revised orders, and hire will continue to run.

The classic test to be applied when ascertaining whether a port is safe or not is set out in the English law case The Eastern City [1958] and is as follows;

“A port will not be safe unless, in the relevant period of time, the particular ship can reach it, use it and return from it without, in the absence of some abnormal occurrence, being exposed to danger which cannot be avoided by good navigation and seamanship”

As per the English law case Brostrom v Dreyfus [1932] the test for whether a port is safe or not will be applied taking into account the characteristics of the particular ship laden as she is at the relevant time.

This is of particular relevance in the present situation as a pattern has begun to emerge where vessels associated with certain countries are being permitted passage through the Straits of Hormuz by Iran. As such it is possible in the future that ports within the Persian Gulf will be considered “safe” for some vessels but “unsafe” for others.

In terms of practical application to the situation in the Persian Gulf if a vessel is outside of the Persian Gulf, then ports within it are likely to be considered unsafe as to reach them would require crossing the Straits of Hormuz, which is an area in which many vessels have been attacked. Similarly for vessels within the Persian Gulf ports outside of it are likely to be considered unsafe.

[NOTE FOR JAPANESE LAW] As to the “Safe Port” warranty, the position under Japanese law is similar to that under English law set out above.

The situation on the ground is evolving rapidly and the safety of each port in question will need to be assessed individually taking into account the specific facts on the ground and the level of risk to vessels calling there.

CONWARTIME

Time Charters also frequently incorporate War Risks Clauses dealing with the party’s rights and responsibilities in the event of war/ hostilities breaking out in the area in which the vessel is trading. These can be read alongside the safe port terms and provide additional rights and obligations to the parties.

One of the most common is the CONWARTIME (the most recent version being CONWARTIME 2025) produced by BIMCO which enables the Master to refuse to transit areas if, in his reasonable judgment it appears that the Vessel, her cargo, crew or other persons on board the Vessel, “may be” exposed to War Risks.

A War Risk is defined in the clause as something that in the reasonable judgment of the Master and/or the Owners, may be dangerous to the Vessel, cargo, crew or other persons on board the Vessel. Under the clause War Risks will include any actual, threatened or reported war, and acts of war.

Given the volume and severity of attacks in the Persian Gulf in recent weeks and the Notice of cancellation referred to above it is highly likely that Owners have the right to refuse transit through the Straits of Hormuz where the CONWARTIME clause is incorporated into the Charter. Where vessels are already inside the Persian Gulf and ordered to ports within it then the CONWARTIME risk assessment set out in the clause will need to be applied in each case. The wording of each of the CONWARTIME versions are similar but also need to be examined carefully.

[NOTE FOR JAPANESE LAW] As to CONWARTIME, the position under Japanese law is similar to that under English law set out above.

Voyage Charters: VOYWAR

The legal obligations under Voyage Charters are impacted differently from those under Time Charters. Typically, War Risks wording is included in Voyage Charters with by far the most common being the set of clauses produced by BIMCO.

VOYWAR 2025 is the latest BIMCO War Risks clause for Voyage Charters but there are various versions being used widely with the most common being VOYWAR 2013.

The test in the VOYWAR 2013 clause is similar to that in the CONWARTIME and provides that the Master will be entitled to refuse to transit or call at ports if the vessel, cargo, crew or other persons on board ‘may be exposed’ to War Risks.

There is a requirement on Owner’s part to give notice that an alternative route will be taken but Charterers are not required to consent. In certain circumstances the Owners have a right of cancellation.

The Clause explicitly deals with the financial consequences of taking an alternative route with a pro-rated uplift to the freight where the additional distance exceeds a certain threshold.

VOYWAR 2013 does not contain wording which entitles the ship owners or master to exercise their rights under clause if the circumstances existed at the time the Charterparty was concluded. Under the clause there must be a material increase in the level or nature of risk since the date of the charter to trigger the clause.

As in the case of the CONWARTIME the level of risk in the Persian Gulf is such that the Owners will likely be able to rely on the provisions of the clause to avoid calling at ports within the Gulf.

[NOTE FOR JAPANESE LAW] As to VOYWAR, the position under Japanese law is similar to that under English law set out above.

Force Majeure Clauses and the Doctrine of Frustration.

Both Force Majeure clauses and the doctrine of Frustration are likely to be relevant when determining parties’ obligations and liability in the current conflict.

It is a common misconception that Force majeure will be implied into Charterparties. However, under English law the term has no legal definition, and it will not be implied into contracts. That said, Force Majeure clauses are often present in both Time and Voyage Charters.

[NOTE FOR JAPANESE LAW] Under Japanese law, the position is different from that under English Law. Under Japanese law the parties are entitled to rely on Force majeure based upon The Civil Code of Japan even if the contracts in question don’t include Force majeure provisions. However, contracts whose governing law is Japanese law usually or often contain Force majeure wording as The Civil Code of Japan does not clearly define the application of Force majeure. In such cases, Force majeure clauses are helpful to make clear the scope of the application of Force majeure.

To ascertain whether a Force Majeure clause will operate in each case it is necessary to look carefully at the contract and specifically at the wording of the Force Majeure clause itself.

Under many common Force Majeure clauses there will be a list of events that will trigger the clause. Usually, one of those events will be the occurrence of war or warlike events.

Each case will need to be looked at based on the specific facts and wording of the Force Majeure clause but it is fair to say that in many contracts involving loading or discharging in the Persian Gulf the parties will be able to rely on Force Majeure wording and it will operate to change the parties’ obligations and liabilities under the Charter. Exactly how will depend on the wording of the clause.

Force Majeure clauses often have quite strict notice requirements in cases where members intend to rely upon them, we recommend that Club advice be sought under FD&D cover at an early stage so that such provisions are properly complied with.

Where there is no relevant Force Majeure clause in the contract and performance of the contract has been acutely affected by the outbreak of war then the parties may be able to rely on the doctrine of frustration to terminate the contract. Frustration operates independently of the contractual terms and unlike Force Majeure does not require any special wording in the Charter for it to apply.

Frustration applies when an event which is not the fault of either party makes a contract impossible to perform or radically different from what was agreed. When determining whether a contract is frustrated the English courts will compare the new situation with the situation for which the parties did provide. They will make an assessment as to how different it is after the occurrence of the potentially frustrating event.

The fact that it has become more onerous or more expensive for one party than they thought is not sufficient to bring about frustration. Instead, it must be positively unjust to hold the parties bound.

In many cases the events occurring in the Persian Gulf have made performance of Charters impossible or radically different and the parties may be able rely upon frustration. This is more likely to be so in the case of shorter Time charters or Voyage charters rather than long term Time charters where there is the option to trade ports outside of the region.

If a contract is found to be frustrated, then both parties are released from their obligations. As the parties may have incurred different levels of loss under the contract at the time of termination, this can create some quite unfair outcomes. In many cases rather than rely upon frustration the parties will want to negotiate a fairer and more predictable solution.

[NOTE FOR JAPANESE LAW] As to Frustration, the position under Japanese law is similar to that under English law set out above except for (1) that the scope of the application of Frustration is a little bit strict (narrow) under English law than under Japanese law and (2) that contracts are automatically terminated under English law while contracts become terminated after either party cancels contracts under Japanese law

The situation in the region is evolving rapidly and the above is general guidance on some of the key contractual issues likely to arise following the outbreak of hostilities. Each case will be different and given the often large sums of money involved it is of vital importance to obtain guidance from the Club’s FD&D team to which lawyers belongs where there is uncertainty about the legal position.