The Strait of Hormuz remains one of the world’s most critical maritime chokepoints, with roughly one‑fifth of global oil supply transiting through it. Since late February 2026, escalating hostilities have significantly restricted vessel movements through the Strait, leaving a large number of ships unable to safely transit or exit the Persian Gulf.
For shipowners, charterers, commodity traders, and insurers, this disruption goes well beyond operational inconvenience. It raises immediate commercial and legal questions around charterparty performance, risk allocation, delay costs, and redelivery obligations under English law. This article considers those issues through a practical, commercial lens, focusing on war risk clauses, safe port obligations, delay and cost exposure, force majeure and frustration, and the increasingly difficult question of redelivery for vessels trapped inside the Gulf.
War risks and refusal of orders
War risk clauses such as CONWARTIME and VOYWAR have become central to decision‑making in the current environment. These clauses are specifically intended to deal with situations involving armed conflict, military activity, or heightened security threats and can, if properly triggered, allow owners to refuse voyage orders that expose the vessel to war‑related danger.
Under the 2025 clauses (which differ from the earlier 2004 and 2013 versions that remain widely used), owners must demonstrate that, exercising reasonable judgment, there is a real likelihood of danger to the vessel, crew, or cargo. This constitutes an objective test and must be supported by credible evidence. The present conditions affecting Hormuz are likely to satisfy this threshold, although each case will depend on the facts at the specific time orders are given.
Where the clause is engaged, owners may be entitled to refuse transit through the Strait, insist on alternative employment orders or, discharge cargo at an alternative safe port.
Safe port obligations under pressure
Safe port warranties are also directly impacted by the Hormuz disruption. Under English law, a port is unsafe if a vessel cannot reach, use, and leave it without exposure to danger that cannot be avoided through ordinary seamanship and navigation. Armed conflict, missile activity, or military escalation can quickly turn an otherwise safe port into an unsafe one.
Importantly, safety is assessed not only at the moment of nomination but also by reference to conditions reasonably expected during the vessel’s approach and stay. This creates a continuing obligation on charterers. A port may be safe when nominated yet become unsafe before the vessel arrives.
Delay, deviation and cost allocation
The current situation has resulted in widespread delays, vessels waiting outside high‑risk areas, rerouted voyages, and sharply increased costs. How these consequences are allocated depends heavily on the type of charter and the precise contract wording. Under voyage charters, delays may affect laytime and demurrage, depending on whether the vessel has reached the contractual destination. Under time charters, time lost will usually remain on hire unless the delay clearly falls within an off‑hire clause.
Off‑hire provisions are construed narrowly, and external geopolitical events will not automatically place a vessel off‑hire unless expressly covered. Owners who choose to deviate or reroute to avoid danger must be able to justify that decision as reasonable and supported by contract, typically through war risk or liberty clauses.
From a commercial standpoint, the most contentious issue is often who bears the additional costs associated with longer voyages, increased fuel consumption, extended employment, lost follow‑on fixtures, and higher insurance premiums. Where contracts do not clearly allocate these risks, disputes are likely.
Force majeure: no general escape route
Under English law, force majeure is not a general doctrine and only applies where the contract expressly provides for it. Whether the current Hormuz disruption engages a force majeure clause depends entirely on its wording, including whether war or route closure is covered, what level of impact is required, and whether there is a clear causal link between the event and non‑performance.
Parties must take care before invoking force majeure. A wrongful declaration can itself amount to repudiatory breach. From a practical perspective, parties should review the clause closely, establish causation, gather contemporaneous evidence, and comply strictly with any notice and procedural requirements before asserting relief.
Frustration remains a last resort
Frustration continues to be an exceptional remedy under English law. A contract will only be frustrated where a supervening event makes performance impossible or radically different from what was agreed. Even severe disruption or delay will rarely suffice unless it is prolonged or indefinite and destroys the commercial purpose of the contract.
In situations like Hormuz, there is a difficult question of how frustration arguments interact with charterparty risk allocation clauses e.g. war risk, delay, or deviation clauses. The courts are generally reluctant to override contractual risk allocation agreed by commercial parties.
The redelivery dilemma for vessels inside the Gulf
One of the most acute challenges arising from the current disruption concerns time charter redelivery. Vessels approaching the end of their charter period may be physically unable to exit the Persian Gulf. Charterers are then forced to choose between attempting redelivery within the Gulf, which may fall outside the agreed contractual range, or delaying redelivery until transit becomes possible.
Both options carry legal risk. Out‑of‑range redelivery may constitute a breach unless contractually justified, while late redelivery may also be a breach unless protected by the charter terms or justified as part of a legitimate final voyage.
Conclusion
The Strait of Hormuz disruption highlights both the value and the limits of contractual risk allocation under English law. War risk and force majeure clauses provide important tools, but they do not eliminate uncertainty, particularly in fast‑moving geopolitical situations. Many disputes will turn on contract wording, timing, and evidence rather than broad legal principles.
The redelivery challenges faced by vessels trapped within the Persian Gulf illustrate the tension between strict legal rights and commercial reality. Early legal input, careful contract analysis, and constructive engagement between counterparties remain essential to preserving rights and managing exposure effectively.
This article was authored by Loh Wai Yue from our Hong Kong office, Joanne Waters from our London office and Vedanta Vishwakarma from our Singapore office.
DAC Beachcroft's Shipping, Trade and Commodities practice supports stakeholders across the global maritime ecosystem, working across all major dispute resolution and arbitration centres, including London, Singapore, Hong Kong, Greece and Peru. Our clients include ports and terminals, shipowners and operators, ship managers, NVOCCs and commodity traders, and their insurers. In addition to covering the entire spectrum of dry and wet shipping disputes work, we also advise on maritime contracts, providing business-enabling advice on the negotiation of charterparties, ship sale and purchase agreements, licenses, port and terminal concession agreements, and freight forwarding contracts.
Please do not hesitate to get in touch with the authors directly should you have any queries.
