Maritime Legal Update
– March 2026
The Middle East
Conflict: Contractual and Insurance Implications
(based on Gard’s Insights)
(prepared by Marek Czernis & Co. Law Office
| www.czernis.pl)
1. Introduction –
Escalation and War Risks
Following coordinated military action by the
United States and Israel against Iran and subsequent heightened military
activity, war risks in and around the Persian/Arabian Gulf and Gulf of
Oman have increased sharply. As a result, major insurers — including Gard,
Skuld, NorthStandard, London P&I Club and others — have issued Notice
of Cancellation of War Risks Cover effective 5 March 2026, significantly
altering the contractual and insurance landscape for shipping in these
regions.
2. Safety and Master’s
Decision
2.1. Safety
Obligations
Under the SOLAS Convention, the Master retains
ultimate authority to refuse to proceed into areas perceived as hazardous for
crew and vessel safety.
2.2. Safe Port Warranty
- If
a charterparty includes an express safe port warranty, Persian Gulf ports
are likely to be considered unsafe, allowing refusal without breach.
- Where
no such warranty exists, an implied warranty may be argued, depending on
trading limits and factual circumstances.
3. Contractual
Allocation of War Risks
3.1. Refusal of Orders
Owners may lawfully refuse orders to proceed to
unsafe ports. Under time charter, charterers may be obliged to issue
alternative orders.
3.2. War Risk and
Force Majeure Clauses
- Standard
war risk clauses (such as BIMCO war related clauses) remain central
to allocating additional war risk premiums (“AWRP”).
- A
force majeure clause may influence rights and obligations, but its
applicability depends on wording and notification requirements.
- The
English law doctrine of frustration remains difficult to establish
without clear contractual triggers.
4. Blocking and
Trapping
If navigation becomes impossible due to
conflict, vessels may become trapped inside or outside a war risk area, with
hire and laytime/demurrage consequences differing between time and voyage
charters.
5. Cargo and Delivery
Obligations
5.1. Delays and
Alternative Ports
In cases of delayed or disrupted deliveries,
carriage contracts governed by the Hague or Hague-Visby Rules typically permit
delivery at an alternative safe port if the bill of lading includes clauses
like “or so near thereto as she may safely get”.
6. Insurance Covers
and FD&D
6.1. War Risk Cover
Cancellation and repricing of war risk
insurance has forced owners to seek alternative arrangements or accept the
absence of cover for affected voyages.
6.2. FD&D
Assistance
Legal costs arising from contractual disputes
and claims related to war risks are generally addressed under FD&D cover,
subject to mutual terms.
7. Practical Recommendations
- Review
and update safe port, war risk and force majeure clauses.
- Clarify
allocation of additional war risk premiums in charterparty
agreements.
- Coordinate
with insurers regarding buy-back options where war risk cover has
been withdrawn.
- Plan
for alternative routing and ports to mitigate delays.
8. Conclusion
The intensified conflict in the Middle East has
significant contractual and insurance implications for maritime operations,
requiring close attention to war risk allocation, safety determinations, and
the evolving insurance landscape.