What Contract Problems Does a Closure of the Strait of Hormuz Create?

After the conflict that began on 28 February 2026, Hormuz transits quickly fell far below pre-crisis levels. According to Windward, an evacuation corridor announced by the IMO in June 2026 operated for a short time but was suspended following attacks on ships.

In this environment, long-term time charters, voyage charters for loading in the Gulf and the related sale contracts all faced the same question: has the contract come to an end, is it suspended, or must the parties continue to perform?

The knock-on effect is also important. According to press reports, QatarEnergy declared force majeure under certain LNG contracts. Force majeure under a sale contract may lead to the suspension or cancellation of a related charterparty. However, whether the clauses in the two contracts cover the same event in the same way must be examined separately.

What Is Frustration Under English Law?

Frustration is the automatic discharge of a contract by an event occurring without the fault of either party. The English courts construe the doctrine narrowly.

The Suez Canal precedents

The closest precedents to the Hormuz crisis are the decisions arising from the closure of the Suez Canal in 1956:

• Tsakiroglou v Noblee Thorl (1962): Under a CIF sale contract for groundnuts from Sudan to Europe, the closure of the canal meant that the cargo had to be shipped by the much longer route via the Cape of Good Hope. The House of Lords held that the longer and more expensive route did not frustrate the contract.
• The Eugenia (1964): In a time charter, the closure of the canal was held not to frustrate the contract, as it did not turn performance into something radically different.

A multi-factorial assessment

In The Sea Angel (2007), the Court of Appeal emphasised that the assessment of frustration is multi-factorial. The terms of the contract, its context, the parties’ knowledge and expectations, the foreseeability of the risk and the duration of the event are considered together.

In light of these decisions, NorthStandard’s assessment is clear: increased risk, delay or expense alone is unlikely to suffice, particularly where the charterparty expressly allocates liability. Since detailed war risks clauses such as VOYWAR already regulate the consequences of being unable to enter a port, frustration arguments are even weaker under contracts containing such clauses.

How Does a Force Majeure Clause Work in the Hormuz Crisis?

Under English law, force majeure is not a general doctrine arising from statute; it depends entirely on the wording of the clause in the contract. The following questions should therefore be asked for each clause:

• Is the event within the clause? Do expressions such as “war”, “hostilities”, “blockade” or “government orders” cover the situation in Hormuz?
• Causation: Was performance prevented by the event, or merely made more expensive or difficult?
• Notice: If the clause provides for a notice period and form, were they complied with?
• Efforts to avoid the effect: Did the party use the reasonable endeavours required by the clause to overcome the effect of the event?

RTI v MUR Shipping: the limits of reasonable endeavours

In RTI v MUR Shipping (2024), the UK Supreme Court held that an obligation to use “reasonable endeavours” under a force majeure clause does not require a party to accept a form of performance not provided for in the contract. In that case, an offer to pay in euros instead of US dollars because of sanctions could be refused. The decision is directly relevant to Hormuz disputes, where sanctions and payment issues are intertwined.

Is the Safe Port Warranty Breached in the Hormuz Crisis?

Under charterparties, charterers warrant that they will send the vessel only to safe ports. Under the classic definition in The Eastern City (1958), a safe port is one which the vessel can reach, use and return from without, in the absence of some abnormal occurrence, being exposed to danger which cannot be avoided by good navigation and seamanship.

When is the warranty assessed?

Safety is assessed prospectively at the time charterers give the order, in respect of the period when the vessel will arrive at, use and leave the port. The Evia (No 2) (1983) is very close to the Hormuz crisis in this respect. The case concerned a vessel trapped in the Shatt al-Arab because of the Iran-Iraq war. The House of Lords held that, since the port was prospectively safe when the order was given and the war was an abnormal occurrence arising later, charterers had not breached the warranty.

The same decision also imposes a secondary obligation on charterers: if the port becomes unsafe before the vessel reaches it and the vessel can still avoid the danger, charterers must nominate a new, safe port.

Is a Vessel Waiting in Hormuz Off-Hire?

Under time charters, charterers are relieved from paying hire in the circumstances listed in the off-hire clause. According to NorthStandard, hostilities are unlikely to trigger the off-hire provisions of standard forms such as NYPE or Shelltime unless the clauses have been amended.

Under net loss of time clauses, whether the full working of the vessel is prevented depends on the service required of the vessel at that time. In addition, under CONWARTIME 2025, the vessel remains on hire while complying with the directions and advice permitted by the clause.

Impossibility and Excessive Difficulty of Performance Under Turkish Law

If the contract is governed by Turkish law, two provisions of the Turkish Code of Obligations apply instead of frustration under English law:

Article 136: Subsequent impossibility for which the obligor is not responsible

If performance becomes impossible for reasons for which the obligor cannot be held responsible, the obligation is extinguished. In bilateral contracts, the party released in this way cannot claim the counter-performance and must return anything already received under the rules of unjust enrichment.

Article 138: Excessive difficulty of performance (hardship)

If an extraordinary situation, which was not foreseen and could not have been foreseen by the parties when the contract was made, arises for a reason not attributable to the obligor, and changes the facts existing at the time of the contract to the obligor’s detriment to such an extent that demanding performance would be contrary to good faith, the obligor may ask the judge to adapt the contract or, if that is not possible, to withdraw from it. In contracts involving continuous performance, termination replaces withdrawal. The obligor must not yet have performed, or must have performed while reserving its rights.

How Do English Law and Turkish Law Compare?

Since most contracts of Turkish parties are governed by English law, it should be remembered that the possibility of adaptation under Turkish law will not be available in many cases. Identifying the applicable law is the first step in every Hormuz dispute.

Which Evidence Matters in a Hormuz Dispute?

• Chronology: The dates on which the charter was signed, the order was given and the risk escalated. Safe port and qualitative change assessments depend on this chronology.
• Official warnings: Security warnings issued by flag states, coastal states and military sources; the insurance market’s listed areas.
• Insurance correspondence: Quotations for additional premium, refusal of cover or conditions of cover.
• Notices: The dates and content of force majeure, refusal and new-order notices.
• Vessel movement records: Logbook, AIS and route data.
• Related contracts: Force majeure declarations under the sale contract and their effect on the charterparty.

Frequently Asked Questions

Does the closure of the Strait of Hormuz terminate a charterparty?

As a rule, no. Under English law, performance must become radically different; a longer route, delay or increased cost is not enough. The outcome depends on the clauses of the contract and the duration of the closure.

What is the difference between frustration and force majeure?

Frustration arises by operation of law and discharges the contract automatically. Force majeure arises from a contractual clause and its consequences, such as suspension, cancellation or exclusion of liability, depend on the wording of the clause.

Why are the Suez Canal decisions important?

In Tsakiroglou and The Eugenia, the closure of the canal and the longer route were held insufficient to frustrate the contract. These precedents are relied on in Hormuz disputes.

Have charterers breached the safe port warranty by sending the vessel to the Gulf?

It depends on when the order was given. Under The Evia (No 2), there is no breach if the port was safe at the time of the order and the danger arose later from an abnormal occurrence; however, charterers may come under an obligation to nominate a new port.

Is hire payable for a vessel waiting at Hormuz?

Standard NYPE and Shelltime off-hire clauses are generally not triggered by hostilities. The outcome depends on the wording of the clause and the service required of the vessel.

Can a contract be adapted under Turkish law?

Yes. Under Article 138 of the Turkish Code of Obligations, if an unforeseeable extraordinary situation has made performance excessively difficult, adaptation or, failing that, withdrawal or termination may be requested. The obligor must not have performed, or must have performed under reservation.

What does RTI v MUR Shipping say?

The reasonable endeavours obligation in a force majeure clause does not require a party to accept a form of performance not provided for in the contract, such as payment in a different currency.

When should a force majeure notice be given?

In accordance with the period and form set out in the clause, without delay after becoming aware of the event. A notice not given in time may cause the loss of the right to rely on force majeure.

Why Is Specialist Legal Support Necessary?

In the Hormuz crisis, the question of whether a contract has ended, is suspended or can be adapted is answered differently depending on the applicable law, the wording of the contractual clauses, the chronology of events and the timing of notices. While frustration arguments often fail under English law, a well-constructed force majeure or safe port argument can change the outcome entirely. In contracts governed by Turkish law, adaptation for hardship is possible only if its conditions have been preserved in time.

2M Hukuk Law Firm, based in Tuzla, Istanbul, advises shipowners, charterers, cargo interests and trading companies in Istanbul and Kocaeli on maritime law. We work on force majeure, safe port and frustration assessments under charterparties and related sale contracts, the preparation of notices and the handling of disputes.

If your contract has become impossible to perform because of the Hormuz crisis, or if you have received a force majeure notice from the other party, you can request a consultation through our contact page together with your contract and correspondence.