Given the rapidly developing situation with Iran, this article provides an update on recent developments and further information relevant to charterparty implications. It builds on our previous article published on 20 February 2026, offering insight into operational impacts and changes affecting maritime contracts in light of current hostilities.
Members are also advised to refer to Maritime security update: Gulf Region / Strait of Hormuz and Red Sea for the latest update on maritime security.
The background
On 28 February, after weeks of increased tension and mobilisation in the area, a major US–Israeli joint military operation was launched against Iran, involving air and missile strikes on numerous Iranian military and governmental targets across the country. These strikes have led to widespread retaliation in the region as Iran has employed ballistic missiles, drones, and other means to target US bases across the Gulf and also launched missiles into Israeli territory. Drones and missile attacks have also been reported in locations in the United Arab Emirates, Saudi Arabia, Bahrain, Oman and Kuwait, contributing to broader regional escalation and disruption of shipping in the Strait of Hormuz.
Maritime security conditions have sharply deteriorated, with the Joint Maritime Information Center (JMIC) elevating the threat in the Gulf of Oman and approaches to the Strait of Hormuz from "Severe" to "Critical" after three confirmed attacks on merchant vessels within 24 hours. The UKMTO has advised of elevated electronic interference (including to AIS and other navigational or communications systems). The Iranian Revolutionary Guard has asserted that the Strait is "closed" and that no vessels are "allowed" to transit the Strait. In light of these developments, Skuld and several other P&I insurers have issued Notices of Cancellation for certain covers.
At the same time, there is increased concern about a second theatre of disruption in the Red Sea and Bab al-Mandab, where Houthi forces are signalling renewed drone and missile activity against vessels with connections to the US or Israel.
On 3 March 2026, the Trump Administration revealed that the US Navy stands ready to protect ships in the Middle East "if necessary", aiming to address energy supply disruptions stemming from the US-Israel conflict with Iran. In addition, the Administration announced plans to offer risk insurance to shipping companies in the region "at a very reasonable price", with the goal of ensuring a steady, uninterrupted global energy flow.
While these developments are promising, it is important to recognise that the practicalities of implementation are far from straightforward. A comprehensive review of the process is required, including an analysis of coverage parameters, premium structures, criteria for determining a "reasonable price", and the definition of territorial limitations. Each of these aspects will undoubtedly demand considerable time and scrutiny.
Moreover, several critical questions remain unanswered. The phrase "if necessary" is particularly vague—does it refer to specific incidents or established criteria that would trigger the Navy’s intervention? It is also unclear whether certain countries might be excluded from protection, or under what circumstances a naval escort could be withdrawn. These ambiguities, along with uncertainties surrounding the scope and operational logistics of US Navy escort activities, are only likely to intensify as the conflict evolves.
Another significant concern involves how these proposed measures might interact with existing sanctions. There are at present far reaching UK:EU and US sanctions against Iran. If a collision were to happen in the Straits of Hormuz, perhaps with an Iranian vessel the practicalities of handling that would be extremely complex given the present sanction regime. Therefore, such interplay with sanctions could have a substantial impact on both the viability and the reach of any insurance arrangements put forward.
Given the multifaceted nature of these issues, it is evident that any insurance solution will require meticulous planning and cannot be expected to take effect immediately. Although the news is encouraging, members should anticipate that workable solutions may take weeks, rather than days, to be fully realised.
General English law charterparty implications
This article explores key English law charterparty implications arising out of the hostilities in the Middle East and, in particular, the implication for vessels which have been ordered to proceed through the Strait of Hormuz.
War risks clauses
The vast majority of charterparties contain express war risks clauses. These commonly include versions of the BIMCO CONWARTIME and VOYWAR clauses (while updated in 2025, earlier versions from 2004 and 2013 are still widely used), whereas most of the tanker forms contain their own war risks clauses.
The operative clauses in question should always be checked carefully.
CONWARTIME 2013 and 2025 grant owners the right to refuse to proceed to or through any area where, in the reasonable judgement of the master or owners, the vessel, crew, or cargo may be exposed to war risks. If a vessel refuses to proceed to a loading or discharge port, owners can request an alternative nomination within the permitted range; if no nomination is received within 48 hours (extended to 72 hours under CONWARTIME 2025), owners may discharge at any safe port of their choosing, with costs borne by charterers.
VOYWAR 2013 and 2025 allow owners to discontinue loading or cease to proceed to or remain at any place exposed to war risks. Owners may request an alternative port nomination and discharge at a safe place if no alternative is provided within the specified timeframe. VOYWAR 2013 addresses situations where the usual route becomes dangerous, permitting owners to take an alternative route and recover additional freight for the extra distance.[1] VOYWAR 2025 instead allows for adjusted freight based on estimated time or expenses incurred or saved by the alternative route.
The main oil tanker charterparties contain their own distinct war risks provisions. For instance, the Shelltime 4 form provides that charterers may nominate an alternative loading or discharging port (within the trading limits of the charterparty) if inter alia the master or owners in their reasonable opinion consider that it has become dangerous, impossible or prohibited for the vessel to reach or enter, or to load or discharge cargo at any place to which the vessel has been ordered. In the case of an alternative discharge port, the charterers must provide their orders within 48 hours, failing which owners may discharge the cargo at any place within the trading limits.[2]
Owners' assessment of exposure to war risks
Owners’ entitlement to refuse orders relies on an assessment of the exposure to war risks. For example, the CONWARTIME 2004 clause permits refusal if, in the reasonable judgement of the master or owners, the vessel, cargo, or crew may be exposed to war risks. This judgement must be exercised in good faith and be objectively reasonable, with exposure requiring a real likelihood or serious possibility.[3] Owners should undertake necessary enquiries, such as independent voyage risk assessments and liaising with flag state representatives, maintain all news records, enquiries with relevant agents, and consider all safety actions that a prudent shipowner and master should take in such circumstances.
Owners cannot typically refuse orders to trade in areas where, by the terms of the charterparty, they have accepted the risk, unless they demonstrate a qualitative change[4] in risk since the charterparty’s formation.[5] Acceptance of risk may be inferred if owners knew the vessel would be employed in that trade[6] or if a clause stipulates a particular route as "always allowed".[7]
Safe port warranties
Most charterparties include provisions that the vessel will only proceed to safe ports or berths. Under English law, a port is considered safe if "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".[8] The assessment of port safety extends beyond physical threats to the vessel and crew to include legal and political risks, such as arbitrary detention.
Owners can refuse charterers' orders to proceed to unsafe ports. Persisting in such orders may constitute a repudiatory breach of contract by charterers in which case the owners may be entitled to cancel the charterparty. The safety of a port is assessed prospectively, considering the vessel’s arrival and use. If a port is safe when the order is made but becomes unsafe before arrival, time charterers must provide alternative instructions if the vessel is able to proceed to another port.[9] However, this secondary obligation probably does not exist in a voyage charter.
It should also be noted that most tanker forms only require the charterers to exercise due diligence to nominate ports that are safe.
Potential remedies for owners if the vessel incurs loss or damage
Damages
If charterers are not entitled to order the vessel to proceed but nevertheless do so, this constitutes a breach of the charterparty. Such a breach is not automatically repudiatory but may become so if charterers persist. Owners can generally recover damages for losses caused by the breach, subject to principles of causation, mitigation and remoteness.
The implied indemnity
If loss or damage occurs from complying with charterers’ orders under a time charter, owners may recover under the implied indemnity (e.g., clause 8 of the NYPE 1946 form). The orders must be an effective cause of the loss,[10] and an indemnity is not available for risks that owners have agreed to bear under the charterparty.[11]
Termination of the charterparty
Frustration
Temporary unsafety will not frustrate a charterparty. However, unsafety, which is likely to prevent performance for a long period, can lead to frustration. Frustration arises if circumstances radically alter the contractual obligations assumed, making it unjust to enforce them. Increased cost alone does not frustrate the contract;[12] performance must be radically different.[13]
The financial consequences of frustration differ between time and voyage charterparties. If a voyage charter is frustrated, losses lie where they fall, and neither party can claim damages. Frustration of time charters is governed by the Law Reform (Frustrated Contracts) Act 1945, with hire ceasing on the charter being discharged and the possibility of repayment of hire paid beforehand. The court or tribunal may exercise discretion regarding hire retention or payment.
Force majeure
English law does not recognise a free-standing doctrine of force majeure; reliance on force majeure depends on the specific content of any force majeure clause in the charterparty. Such clauses are common in voyage charters, and their particular wording determines whether a party may be excused from performance. The burden of showing the engagement of the clause is on the party invoking it.
Cancellation clauses
Charterparties may also contain express cancellation clauses. For example, VOYWAR 2013 and 2025 allow owners to cancel the charterparty before loading commences if their reasonable judgement indicates exposure to war risks;[14] if a range of ports is provided, owners must first request a safe port nomination within that range before cancelling. Some of the tanker voyage charter forms also contain cancellation provisions (such as the BPVoy 5).
Other war-related cancellation clauses depend on their particular wording; contracts often include provisions for cancellation in the event of war between specified states,[15] usually including the US but not Iran. Therefore, if other countries become embroiled in any Iran-US conflict, members will need to review such cancellation clauses in their contracts to ensure those countries are not listed within the clause.
Bills of Lading
To the extent the vessel proceeds to an alternative port, consideration will also need to be given to additional issues that may arise under the bills of lading, including the possible need for substitution of the original bills.
The Strait of Hormuz
Although there are reports that some vessels are continuing to transit the Strait of Hormuz, there appears to be little doubt that (at this time) a vessel doing so would be subject to "war risks" for purposes of most war risk provisions. Similarly, at this time, it would appear unsafe for most vessels to proceed through the Strait of Hormuz. In addition, it may not be practicable for vessels to do so if no war risk insurance is available. In this regard, we note that on 3 March 2026, the JWC added Bahrain, Oman, Kuwait and Qatar to the listed areas.
Therefore, it appears highly likely that owners would not be obliged to continue on a voyage through the Strait of Hormuz at the present time. "However, the assessment of whether a vessel is exposed to war risks or whether a port or passage is unsafe must be kept under continuous review as conditions in the region develop".
The consequences will depend on the charter terms and on developments in the region. For instance:
- It may be that the war risks clause (or some other clause) would allow owners to cancel a voyage charter if no cargo has been loaded.
- It may be that charterers would be required to nominate another port either under the war risks clause[16] or, in the case of a time charterparty, under standard employment provisions.
- It may be that charterers would simply be entitled to order the vessel to wait for developments if they wish (which is likely to be the case under a standard time charter).
- It may be that there is no right or obligation to nominate another port (which may be the case if the only permitted time trip charter or a voyage charter with a limited war risks provision requires the vessel to proceed through the Strait of Hormuz). In these circumstances, the charterparty will continue until such time as it is frustrated. At present, there may be arguments as to whether the likely delay is such as to radically change the nature of the contract. Although there is a presumption that wars last indefinitely, this is a relatively weak presumption of limited effect[17].
If owners accepted the risk of transiting the Strait of Hormuz when entering into the charterparty (by, for example, agreeing to a clause such as "Strait of Hormuz always allowed") this would still not oblige owners to transit the Strait if (as is likely) it is held that the escalation of hostilities has been a change of risk sufficient, in its degree, to make it qualitatively different to that which existed at the date of the charterparty. The position would be different if owners had entered into a very recent charterparty with such a provision after the latest escalation.
Difficult questions will also arise where ships are blocked and trapped in the Persian Gulf. Large numbers of ships at or off ports in the Gulf are currently affected by the recent developments. In light of the situation regarding transit of the Strait of Hormuz discussed above, they may be effectively trapped in the area for the time being. Additionally, where any such vessel may be due to load or discharge cargo in a Gulf port, owners may have to assess the relative risks of entering any ports in the area versus remaining away from such ports. Further risk assessment may be necessary in relation to orders regarding the loading of any cargo in a Gulf port, either for transit within the Gulf (if charterers attempt to utilise the vessel whilst the ship is effectively trapped) or for delivery outside the Gulf, to take account of the unknown duration of the current situation and the potential for increased risks associated with the carriage of any particular cargo.
The Red Sea
Whereas it appears obvious that vessels transiting the Strait of Hormuz will face "war risks" which would entitle owners to refuse to proceed, the position is not as obvious with regard to the Red Sea. It does appear that the recent hostilities have escalated the risks involved in that the Houthis have announced that the recent ceasefire has come to an end, and they have threatened to recommence their attacks on vessels passing through the Red Sea (at least where vessels have US or Israeli connections). As a result, some companies (such as CMA-CGM) have (again) stopped their vessels from transiting the Red Sea.
Whether the risks involved will be sufficient to enable owners to refuse to proceed through the Red Sea under any particular charterparty is likely to depend on specific factors (such as the charter terms and whether the vessel has any connection with Israel or the US and such as the type of vessel) and on developments in the region (in that, if for example, there are successful attacks on vessels in the coming days, that would reinforce the validity of any decision not to proceed). At present, it appears likely that owners of vessels with a US or Israeli connection would be justified in refusing to proceed but the position may be more arguable with regard to other vessels (in the absence of further incidents).
In any event, prior to deciding whether or not to transit the Red Sea, owners should undertake appropriate enquiries, such as independent voyage risk assessments, liaising with flag state, insurers and other organisations.
Israeli ports
Similar considerations will apply to Israeli ports (which have also been under attack). It is arguable that there may be war risks in trading to such ports, and that those risks would be sufficient to justify a decision to proceed. However, the position would need to be carefully considered in each case and may depend on future developments (such as whether there are successful and continued attacks).
What can members do?
Safety first
The safety of the vessel and its crew is paramount. Regardless of war risks provisions, the vessel is not obliged to proceed to any location where it faces imminent peril or unassumed risks. All mandatory safety requirements and guidelines must be strictly followed.
Risk assessment
Under a time charter, owners are entitled to a reasonable period to consider charterers’ orders and their legitimacy.[18] This time should be used to gather evidence and conduct voyage-specific risk assessments, ensuring informed decisions about compliance with instructions.
Co-operation and agreement
Owners and charterers have an implied duty to cooperate for the safe and effective prosecution of the voyage.[19] Open communication and mutual cooperation should be maintained to mitigate risks to the vessel and crew.
Owners should bear in mind that, if they can reach an agreement with charterers (for example, as to alternative ports), this may avoid any dispute; consequently, seeking agreement may be the best option.
Notice requirements
Owners’ rights under standard war risks clauses are often contingent upon providing minimum notice to charterers. Compliance with these notice requirements is essential.
Additional clauses
For new charterparties involving trading to affected areas, members should consider additional provisions to safeguard their position. Members are advised to contact their usual Claims Executive for assistance.
Acknowledgements
Skuld is grateful to Robert Veal and Glenn Winter: Winter & Co Solicitors
[1] To the extent it exceeds 100 nautical miles.
[2] See also the Shellvoy 6 form which gives charterers the right to order the vessel to load or discharge at alternative ports within the loading/discharging ranges, where the nominated ports have become blockaded or, owing to inter alia war, hostilities, warlike operations, owners or the master in their discretion consider it dangerous or prohibited for the vessel to enter such ports, or consider it dangerous or impossible or prohibited to reach such ports. Charterers must make their nomination within 48 hours, failing which either the charterparty shall be terminated (if the affected port is the loadport and no cargo has been loaded), or the vessel can leave the loadport with part cargo and owners can recover deadfreight (if the affect port is the loadport and has loaded some of the cargo), or owners may discharge the cargo at any port (not necessarily within the range) (if the affected port is the discharge port). The clause makes provision for adjusting the freight rate where cargo is loaded or discharged at different ports from those originally nominated.
[3] The Triton Lark [2012] 1 Lloyd's Rep. 151.
[4] The Polar [2024] UKSC 2.
[5] The Product Star (No. 2) [1993] 1 Lloyd's Rep. 397, approved by the Supreme Court in The Polar [2024] UKSC 2.
[6] As was the case in The Product Star (No.2) [1993] 1 Lloyd's Rep. 397.
[7] See The Paiwan Wisdom [2012] 2 Lloyd's Rep 416, the clause in that case referring to Aden.
[8] The Eastern City [1958] 2 Lloyd’s Rep. 127.
[9] The Evia No. 2 [1983] 1 A.C. 736.
[10] The Kos [2012] 2 Lloyd's Rep. 292.
[11] The Island Archon [1994] 2 Lloyd's Rep. 227.
[12] Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696.
[13] National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675.
[14] Sub-clause (b) VOYWAR 2025.
[15] See e.g. Clause 33 of Shelltime 4.
[16] With owners having the rights to select a port of charterers fail to do so.
[17] See e.g. Chrysalis [1983] 1 Lloyd’s Rep. 503.
[18] The Houda [1994] 2 Lloyd's Rep. 541.
[19] See Time Charters, 8th edn, 2025, [para I28].