Regional Conflicts and Their Implications for Charterparties

Marine Insurance P&I Club News — 13 August 2026

Introduction

International shipping has entered a new era of sustained geopolitical disruption. A series of entrenched regional conflicts affecting some of the world's most strategically vital maritime chokepoints — including the Arabian Sea and Strait of Hormuz, the Red Sea, and the Black Sea — has fundamentally altered the risk landscape for shipowners and charterers alike. These waterways collectively carry a substantial share of global seaborne trade, including a significant proportion of the world's oil, gas, and grain supplies, meaning that disruption in any one of them cascades across global supply chains and insurance markets. Against this background, disputes are inevitable where charterers direct vessels to proceed to or through areas that owners consider to present an unacceptable risk.

This article provides a practical checklist of the key charterparty provisions to consider when assessing how owners should respond in these circumstances.

The "Theatres" of Conflict

Strait of Hormuz / Persian Gulf

Hostilities between the United States and Israel on one side and Iran on the other continue to pose a significant threat to merchant shipping in the Strait of Hormuz and a formidable challenge to vessels effectively "trapped" in the Persian Gulf. The strait is one of the most economically critical maritime bottlenecks in the world, with roughly one-fifth of global oil consumption historically transiting its waters. Although some commercial traffic has resumed intermittently, the security situation remains volatile, with high threat levels and elevated insurance premiums. Iranian forces continue to challenge US-led maritime security operations, while the United States has maintained naval measures intended to restrict Iranian maritime activity.

Gulf of Oman

The Gulf of Oman remains an extension of the broader US-Iran maritime confrontation, with heightened naval activity and persistent risks to merchant shipping. US forces continue to enforce maritime interdiction measures against vessels suspected of carrying Iranian exports, while Iran has sought to challenge these operations through naval deployments and indirect threats.

Red Sea

Since the beginning of the conflict in the Persian Gulf between the US and Iran, the threat to merchant shipping in the Red Sea from Houthi forces has been elevated. The Red Sea and the adjacent Bab el-Mandeb Strait form a critical artery connecting the Indian Ocean to the Suez Canal, one of the busiest trade routes in the world. The Houthis still appear to have both the capability and the intent to target commercial vessels using missiles, drones, and unmanned surface craft, particularly against ships perceived to be linked to the United States, Israel, or their partners.

No attacks had occurred until very recently, when the Houthis announced a maritime embargo on Saudi Arabian vessels and claimed to have struck two tankers flying the Saudi flag, as well as carrying out attacks on Saudi oil depots.

Black Sea / Sea of Azov

The security environment for merchant shipping in the Black Sea and Sea of Azov has deteriorated markedly as both Ukraine and Russia have expanded attacks on maritime targets. The Black Sea is a major export corridor for agricultural commodities, and disruptions to commercial shipping in the region have direct implications for global food supply chains. Ukraine has intensified long-range drone operations against Russian logistics and so-called "shadow fleet" vessels operating in the Sea of Azov and the Black Sea. Ukraine's Unmanned Systems Forces has reported hitting 126 Russian shadow fleet vessels in the Sea of Azov and 70 in the Black Sea between 6 and 22 July 2026. More recently, it has been reported that Ukrainian drones have struck several vessels not identified as part of the shadow fleet.

Meanwhile, Russia has continued missile and drone strikes against Ukrainian ports and commercial shipping.

Shipping through parts of the Black Sea corridor has been temporarily suspended by commercial operators due to the escalating threat. The International Maritime Organization has again condemned attacks affecting civilian shipping. Mine hazards, drone strikes, and military operations continue to present significant risks to merchant vessels operating in the region.

Charterparty Considerations

The following sections discuss some of the most important charterparty provisions to keep in mind when considering whether a vessel should proceed to a war-affected area upon request.

War Risks Clauses

The most important clauses in any charterparty in this context are likely to be the war risk provisions. In principle, such a clause could take a limitless variety of forms, but in 'dry' charters it will likely be one of the standard war risks provisions, such as the BIMCO CONWARTIME or VOYWAR Clauses. BIMCO — the Baltic and International Maritime Council — is the world's largest international shipping association and the primary publisher of standard maritime contract forms and clauses used throughout the industry.

CONWARTIME and VOYWAR

Under CONWARTIME 1993, for instance, an owner is not required to continue to or through any port, place, area, zone, or waterway where it appears that the vessel, her crew, or cargo — "in the reasonable judgement of the Master and/or the Owners" — may be, or are likely to be, exposed to War Risks.

The words "may be, or are likely to be" have been construed as requiring "a real likelihood," "real danger," and/or "a serious possibility" of exposure to danger. The mere possibility of exposure will not suffice. Furthermore, in making an assessment of the exposure, the judgement of Owners or the Master must be made in good faith and be objectively reasonable (see The Triton Lark [2012] 1 Lloyd's Rep 151). This approach also applies to the more recent CONWARTIME clauses (of 2013 and 2025), notwithstanding their revised wording.

There are, however, some important differences between the various iterations of the CONWARTIME clause to be aware of. Perhaps most practically relevant is that the notice periods owners must give charterers (for instance, in requesting alternative voyage instructions) have been changed under the 2025 clause, from 48 to 72 hours.

It is also worth noting that, unlike their predecessors, the 2013 and 2025 clauses state expressly that they may be engaged "whether such risk existed at the time of entering into this Charter Party or occurred thereafter." This may or may not be significant depending on the circumstances of the relevant case, as discussed below.

Tanker Charterparties: Beepeetime 2, ASBATANKVOY, and Shelltime 4

Tanker charterparties often include a variety of distinct war risks provisions. For example, Clause 35 of the Shelltime 4 form provides that if (because of war or hostilities, etc.) it becomes dangerous for the vessel to reach or enter, or to load or discharge at any place to which the vessel has been ordered — in the "reasonable opinion of the master or Owners" — the charterers, having been notified of the situation, shall "have the right to order the cargo … to be loaded or discharged .. at any other place within the trading limits."

Clause 40(2) of the Beepeetime 2 charterparty (which is materially similar to Clause 20(b) of the ASBATANKVOY form) refers to the "discretion" of the Master or Owners when assessing the relevant danger. It has been held that the discretion to be exercised under Clause 40 must be exercised honestly and in good faith, and not arbitrarily, unreasonably, or capriciously (see The Product Star (No. 2) [1991] 2 Lloyd's Rep. 468, in which the degree of risk had not increased since the date of the charterparty and owners' refusal to proceed was considered, on those facts, to be arbitrary).

Risk Assessment

One of the means by which the "objective reasonableness" of owners' judgement may be demonstrated is if it is supported by the findings of a detailed risk assessment for the specific vessel for the particular voyage (The Triton Lark [2012] 1 Lloyd's Rep 151). Such a risk assessment should therefore be considered wherever feasible in situations where owners are evaluating their entitlement to refuse to proceed to, or remain at, a particular location. There are companies that will conduct independent risk assessments on behalf of owners if that is preferable.

An independent risk assessment may be vital where owners are considering whether they are entitled to refuse to proceed to, or remain at, a particular location. The report can assist without-prejudice discussions with charterers in seeking a common solution and may also serve as crucial evidence if the matter cannot be resolved amicably.

Owners will often be pressured to comply with time charterers' voyage instructions forthwith, not least in view of owners' general obligation to proceed with utmost dispatch. However, owners are not obliged to comply with time charterers' orders immediately. They are, instead, generally entitled to a "reasonable" period of time to consider the safety implications of compliance and whether the orders are, in fact, legitimate (see The Houda [1994] 2 Lloyd's Rep 541). Subject, again, to the particular charterparty terms and surrounding circumstances, this should generally be a period of time that will allow owners to conduct a sufficiently thorough risk assessment and to take legal advice where necessary.

Although in isolation the standard war risks clauses may well entitle owners to refuse to proceed to a particular area, the position under the war risks clause may only be part of the story.

Assumption of Risk

Specific Provisions Regarding Permitted Areas

Notwithstanding the wording of the relevant war risks clause, an owner will generally not be entitled to refuse to proceed to a particular area if, by the terms of the charterparty construed in its factual context, the owner has accepted a particular war risk involved in trading to that area (see The Paiwan Wisdom [2012] EWHC 1888 (Comm)).

The relevant charterparty must be reviewed carefully for any provisions that expressly permit trade to a particular location, notwithstanding that it may be affected by war. A charterparty may contain a provision anticipating that the vessel must trade to the region: the most obvious examples would be if the location, or a port in the location, is named, or if there is a provision to the effect that trade to a particular place is "always allowed" (although the possible variants of such provisions are limitless). The charterparty may also contain comprehensive provisions for additional war risks insurance premia for trading to a particular location, which will make it more difficult for owners to refuse to proceed to such a location if charterers are willing to pay the increased premium.

Exactly how such provisions will interrelate with a war risks clause and, in turn, entitle owners to refuse to proceed to a war-affected area, will be a matter of construction and thus depend on the wording of the particular clauses in question and the factual matrix as at the date of the charterparty.

The Type of Charterparty

Also material to the question of assumption of risk is the specific type of charterparty under consideration. For example, in the context of a voyage charterparty with a sole discharge port (or even a time charter trip to a stipulated location), it will be harder — though not impossible — for an owner to argue that it has not assumed the existing risks of trading to those particular locations where such risks were known at the time of the relevant charterparty. By contrast, it may be easier for an owner under a period time charterparty for worldwide trading limits to maintain that it has not assumed the risk of trading to one particular war-affected area within those broad limits. The charterparty trading parameters will be important in assessing the risk assumed by owners.

The Factual Matrix and the Charterparty Date

For purposes of considering whether owners are entitled to refuse to proceed to a certain area, the exact date of the charterparty may be crucial. The factual matrix as at the charterparty date will be important to the question of assumption of risk, since known risks as at that date are more likely to be deemed to have been assumed by owners.

Alternative Situations

The position may be stated briefly as follows:

1. If the charterparty does not anticipate or require that the vessel will proceed to a particular area, there will normally be no reason why owners cannot rely on the war risk clause (if otherwise applicable).

2. If the charterparty anticipates that the vessel may be ordered to a particular place, it is possible (depending on its construction) that the owner will only be allowed to rely on the war risk clause (if otherwise applicable) insofar as the risks have increased since the date of the charterparty — unless the war risk clause provides that the owner can rely on it irrespective of whether the risks existed at that date (such as CONWARTIME 2013 and 2025).

3. If the charterparty requires the vessel to trade to a particular place (for example, by providing for a named port or by providing that such trading is "always allowed"), the owner may be prevented from relying on the clause (if otherwise applicable) unless there has been a change in the nature of the risks since the date of the charter or the risks have increased so significantly as to make them "qualitatively different" (see The Polar [2021] UKSC 2). This might be the case if, for example, the owner agreed to trade via the Strait of Hormuz under a charterparty dated prior to the outbreak of hostilities on 28 February 2026.

Other Charterparty Provisions

Safe Port Warranties and Indemnities

If a port is affected by war, it may be possible for owners to argue that the port is legally unsafe. To make good such an argument, owners would need to show that the subject vessel would not be able to reach, use, and return from the port safely in the absence of some abnormal occurrence (see The Eastern City [1958] 2 Lloyd's Rep 127).

However, as a matter of English law, it is the prospective safety of the port which is relevant: though the assessment is made when the order is given, the assessment considers the safety situation at the time the vessel will arrive at and seek to use the port. Complex questions may arise as to whether a port was prospectively safe at the time the vessel was ordered there if there were no hostilities at that time, but such hostilities might have been anticipated.

Under a time charterparty, if the relevant port to which the vessel is ordered becomes unsafe after the order is given, charterers are under a secondary obligation to give alternative voyage instructions for the vessel to proceed to a different port which is prospectively safe. Such a secondary obligation is not considered to rest upon voyage charterers.

Although in theory a safe port warranty may be engaged by war, it may be unlikely for owners to rely on the general safe port warranty to refuse to proceed to a particular place affected by war in circumstances where the specific war risks provision would not itself entitle a refusal to comply. However, the safe port warranty may become highly relevant where the vessel sustains damage having proceeded to a war-affected port and her owners seek to mount a claim for damages after the event.

Similarly, if the vessel is damaged as a result of complying with a time charterer's order to proceed — for instance, through the Strait of Hormuz — owners may also be able to recover under an implied indemnity (for example, the indemnity implied in Clause 8 of the NYPE 1946 form). Some charterparties also contain an express indemnity, such as Clause 13(a) of Shelltime 4.

For an indemnity claim to succeed, however, the charterer's orders must be an "effective cause" of the owner's loss, and no indemnity will be recoverable in respect of risks that the owners are deemed to have agreed to bear under the relevant charterparty. There is generally no equivalent indemnity in a voyage charterparty.

Cancellation Clauses

The relevant charterparty may provide for an entitlement to cancel the contract in the event that war affects the intended charter voyage. Many charterparties contain a mutual cancellation clause triggered by an outbreak of war between stipulated states. These, however, tend to list countries such as the US, UK, China, France, Japan, and Russia as belligerents, whereas the conflicts described above do not involve overt conflict between such states.

It is important to review the cancellation clause carefully, as it may permit cancellation if a specified country becomes involved in a war. It is also possible that war may delay delivery under a period time charterparty, in which case the vessel may miss the laycan and thus trigger the entitlement to cancel.

Force Majeure

Many voyage charterparties in particular will include a force majeure provision which may discharge the parties from their contractual obligations (and liabilities) if performance is prevented or hindered by a stipulated force majeure event. The extent of the protection such a clause would provide to the parties would be a matter of construction, depending entirely on the wording of the particular provision and the extent to which contractual performance has, in fact, been prevented.

Sanctions Clauses

The current geopolitical situation also gives rise to sanctions concerns. Most current charterparties are likely to contain sanctions provisions such as the BIMCO Sanctions Clause for Time Charter Parties 2020. This clause allocates responsibility for sanctions compliance between owners and charterers by allowing either party to refuse orders or performance that would expose them, the vessel, cargo, or associated persons to sanctions imposed by applicable authorities. It also provides the right to suspend performance or terminate the charter in certain circumstances, with the aim of protecting both parties from legal, financial, and operational risks arising from international sanctions regimes.

The Persian Gulf Strait Authority is sanctioned (in addition to a number of other state-related entities), and OFAC has made it clear that obtaining a safe passage guarantee from the Authority — even when no money changes hands — may constitute sanctionable conduct. Iran's attempts to monetise Hormuz transits, whether through direct IRGC-linked tolls, the PGSA's "permission" regime, or nominally private insurance schemes like PGMIC and HormuzSafe, are being met with active sanctions designations. Any payment, in-kind exchange, or even mere receipt of "safe passage" services from Iran or the IRGC carries sanctions risk for both US and non-US persons.

Any transit through Hormuz, as per OFAC guidance, requires additional due diligence measures to ensure no sanctions are being breached. When aware of a transit, Members should advise immediately their usual Claims Executive, who will guide them with respect to actions required before the Association can confirm cover or handle any claim.

The sanctions landscape has become increasingly complex this year. On 13 April 2026, China introduced the Regulation on Countering Foreign Undue Extraterritorial Jurisdiction (Regulation 835). The Regulation strengthens China's ability to respond to foreign "long-arm jurisdiction" measures. It builds on anti-blocking measures introduced five years ago by providing additional enforcement tools and procedural guidance.

Because sanctions rules may conflict, Members should review their sanctions clauses. They should also carry out additional due diligence and remain alert to changes in the sanctions environment.

Crew War Bonus Clauses

Some standard War Risk Clauses — for example, CONWARTIME 2013 — require Charterers to reimburse Owners for any war bonuses that Owners are obliged to pay their crew under the crew employment contracts for entering war or high-risk areas. However, a number of bespoke clauses, particularly from oil majors, require Charterers to be given written notice as to the amount of the bonus. Parties should check the provisions of any such bespoke clauses carefully.

Frustration

If vessels are unable to proceed safely for a prolonged period of time (for instance, because they are "trapped" in the Persian Gulf) and the governing charterparty clauses do not adequately address the situation, the contract may be frustrated. A charterparty, like any other contract, may become frustrated if, without fault of either party, a change of circumstances makes the performance of remaining contractual obligations so "radically different" from that which was reasonably contemplated at the execution of the contract that it would be unjust to hold the parties to those obligations. Frustration occurs automatically and is not dependent on the parties making any election.

Complex questions may arise where the parties tender some form of performance after the contract has been frustrated to the benefit of the other party. It should be noted that a charterparty will not be frustrated simply because performance has become more costly or has been significantly delayed; the changed circumstances (including likely future delay) must make performance "radically different." Any assessment of whether the new circumstances are so radically different as to frustrate the contract will inevitably involve reference to the contract terms (in particular relating to remaining obligations) and to the circumstances of the case.

Cargo and Bills of Lading

It is important not to consider the charterparty position in isolation. Also relevant to the steps owners may wish to take are whether the vessel is laden with cargo and the particular characteristics of that cargo. An obvious consideration is whether the cargo is perishable.

It is also probable that owners will have assumed obligations to cargo interests under any bills of lading issued in respect of cargo loaded under the charterparty and potentially in bailment. Such obligations will generally include discharge at the stipulated discharge port and taking reasonable care of the loaded cargo. It will be important to consider whether the relevant bill of lading gives owners similar rights to refuse to proceed to a particular location — for instance, by incorporating the war risks clause of the subject charterparty. Owners should consider a clause requiring any bills of lading issued under the charterparty to incorporate similar protections to those enjoyed by owners under the charterparty.

It will also be important for owners to consider how and when freight is earned under the relevant bills of lading.

Five Practical Steps Moving Forward

1. Safety First. The safety of the vessel and her crew is paramount. Quite apart from any applicable war risks provision, the vessel is not obliged to proceed to or remain at any place where she will face imminent peril.

2. Carefully review the charterparty terms. A comprehensive review of the entire charterparty terms is crucial. The war risks clause itself is important but will often only provide part of the answer when it comes to owners' obligations to proceed to a particular area. Furthermore, should owners elect to refuse orders in reliance on one of the BIMCO standard war clauses, many of the owners' entitlements under such provisions are contingent on the provision of minimum amounts of notice to charterers. Where these apply, such notice requirements must be complied with strictly.

3. Take the time necessary to assess the risk. Owners are not obliged to comply with any order from a charterer immediately and without pause for thought. Owners are entitled to a reasonable period of time to consider the relevant order given and its legitimacy. This time should be used, wherever possible, to gather evidence and to conduct an appropriate voyage-specific risk assessment for the relevant vessel, so as to make as informed a decision as possible as to whether it is safe to comply with instructions. It may sometimes be sensible to obtain a risk assessment from a professional expert.

4. Co-operation and agreement wherever possible. Owners and charterers are normally under an implied duty to cooperate with each other as far as the safe and effective prosecution of the voyage is concerned. Communication lines should always be kept open, and the parties should cooperate to the fullest extent possible to see if solutions can be reached to mitigate any risks to the vessel or her crew. However, consideration should always be given to preserving recovery prospects if the vessel is substantially delayed. Owners should be cautious about permitting lengthy delays during which discussions take place if it is unclear whether they can recover in respect of the consequences of doing so. This may be more of an issue under a voyage charterparty than a time charterparty.

5. Bespoke clauses. In respect of new charterparties pursuant to which it is anticipated that the vessel may or will proceed via a war-affected area, owners and charterers should consider whether an additional charterparty provision is needed to safeguard or strengthen their respective positions and to avoid some of the uncertainties with the current suite of standard war risks provisions. Just as importantly, owners should be wary — at the fixture negotiation stage — of agreeing to a provision which effectively compels them to proceed to a war-affected area, notwithstanding the war risks clause.

If there are any doubts as to how to proceed, Members are advised to contact their usual Claims Executive for assistance.

Acknowledgements: Skuld is grateful to Robert Veal and Glenn Winter of Winter & Co Solicitors.

Source: Skuld