Disruption now, disputes later (again): war risks, fragile ceasefires and the next wave of claims

Recent events across key maritime chokepoints underscore a familiar reality: the ramifications of decisions taken under acute security pressure rarely conclude when the immediate threat recedes. Operational judgments made in the heat of armed conflict, political escalation or heightened naval activity often give rise to deferred commercial and legal consequences long after the physical danger has abated.

The escalation of risk in and around the Strait of Hormuz, coupled with periods of fragile or conditional ceasefire, has brought these issues back into sharp focus. While the theatre of risk may change, the underlying challenges remain largely the same. Owners, charterers and insurers continue to grapple with the same questions around lawful avoidance, employment orders, war risk exposure, insurance costs and delay attribution.

This article considers how those recurring pressure points are re‑emerging in the current environment and sets out key war risks considerations for market participants navigating an increasingly volatile operating landscape.

From acute crisis to latent dispute

A recurring pattern has now been firmly established:

1. threat escalation leads to rapid re‑routing, refusals to transit, increased premiums and heightened security postures;
2. ceasefires or partial de‑escalation create an illusion of normalisation;
3. commercial disputes emerge later, once hire, freight, delay and additional cost positions crystallise.

The fact that a ceasefire exists, whether formal or de facto, has historically done little to narrow the scope of disputes. On the contrary, they often complicate them. Parties begin to question whether continued avoidance was justified, whether additional insurance premiums should still have been incurred, and whether refusals to proceed remained lawful once open hostilities appeared to abate.

In parallel, there is likely to be a substantial volume of war risks claims arising from physical loss and damage. Several vessels have reportedly been struck, and disputes may arise not only as to liability, but also as to coverage under war risks policies. From early indications, some cases may well present as constructive total losses where repair costs exceed insured values, while others are more likely to give rise to particular average claims, involving complex issues around salvage, towage, and eventual repair.

The practical ability to access, stabilise and remove damaged vessels from high‑risk areas will be central to how such claims evolve. Historical experience – most notably during the Iran-Iraq War (1980–1989) – demonstrates that large‑scale and technically challenging salvage operations in conflict zones are possible, but often protracted and contentious.

War risk clauses under renewed scrutiny

Recent tensions have placed renewed focus on war risk clauses, particularly those derived from CONWARTIME and VOYWAR forms. Several recurring issues are already apparent:

1. the threshold of ‘real danger’: masters and owners must still act reasonably and prudently, but hindsight scrutiny is inevitable once vessels later traverse similar routes without incident;
2. charterers’ employment rights versus owners’ safety obligations remain a flashpoint, especially where political or military risks fluctuate daily rather than deteriorate uniformly;
3. notice and information asymmetry: decisions taken on rapidly evolving intelligence are rarely documented with future disputes in mind, leaving evidential gaps later exploited.

As seen previously in the Red Sea, clauses drafted for conventional inter‑state conflict are being stress‑tested by hybrid warfare, asymmetric threats and proxy engagement, none of which sit neatly within traditional drafting assumptions.

Insurance and premium allocation disputes

One of the most common areas for downstream disagreement continues to be additional war risk premiums:

1. whether the risk environment justified declaration as a ‘listed area’;
2. whether the timing of transit coincided with insured risk;
3. who bears the premium where voyages are delayed, staggered or amended.

In Hormuz‑related scenarios, these disputes are often amplified by short‑term route closures, temporary advisories, or political signalling that falls short of declared hostilities. The absence of a bright‑line trigger means commercial parties frequently talk past one another when allocating cost responsibility.

Beyond physical damage claims, there is also the prospect of war loss‑of‑hire claims, the availability and scope of which will depend heavily on the precise policy terms in place. These claims will be highly fact‑sensitive and may give rise to further coverage disputes, particularly where delay arises from access restrictions, extended salvage operations, or operational stand‑off rather than direct damage alone.

By contrast, it appears unlikely that constructive total loss claims would succeed on the basis of detention alone. Depending on policy wording, minimum detention periods are commonly six months, and in some cases 12 months. The scene is unpredictable and events are unfolding rapidly, although it still seems reasonable to suppose that vessels might be extracted before such thresholds are met.

Fragile ceasefires: commercial normality or legal trap?

Ceasefires deserve particular attention. From a legal standpoint, they are often operationally meaningless but contractually dangerous.

A vessel that refuses to transit during hostilities may later be criticised for failing to resume passage once a ceasefire is announced – even where:

1. the ceasefire is explicitly temporary or conditional;
2. threats from non‑state actors persist;
3. naval deployments remain elevated.

This creates a compressed decision window during which owners must choose between exposing crew and hull to possible physical danger or inviting future claims for delay, off‑hire or breach of employment orders. History suggests that tribunals and courts often show sympathy to safety‑driven decisions where evidence of ongoing risk assessment and rational decision‑making exists. It is correspondingly important to ensure that contemporaneous records showing the rationale behind decisions are retained.

Contractual frustration: still a high bar

Frustration arguments continue to face a high threshold under English law. Temporary route disruption, increased cost, or elevated risk – without legal impossibility – rarely suffices.

That said, cumulative disruption, particularly across multiple voyages or extended periods, is increasingly being argued as grounds for relief. Whether such arguments gain traction remains uncertain, but may feature in the next wave of disputes.

What parties should be doing now

Based on patterns emerging since 2024, several practical steps deserve emphasis:

1. document decision‑making: threat assessments, intelligence sources, insurer input and master‑owner communications should be retained;
2. review war risk clauses proactively: many charters still rely on antiquated wording ill‑suited to modern conflict dynamics;
3. engage insurers early: whether there is alignment between operational decisions and insurance responses remains central to later disputes;

Looking ahead: disputes are inevitable

In keeping with the crisis in the Red Sea, disputes arising from the recent Hormuz‑related disruptions may be expected to mature months, not weeks, from now; often when vessels are redelivered, accounts finalised and relationships have run their course.

The lessons remain consistent: crisis management and dispute avoidance are inseparable. Decisions taken today with an eye on immediate safety and evidential record-keeping will shape liability outcomes long after geopolitical attention has moved elsewhere.

As before, disruption comes first. Disputes follow.

This article was co-authored by Arvin Araghi, trainee solicitor.