Key takeaways
Force majeure under English law
There is no concept of force majeure under common law. It is entirely dependent on contractual terms.
Reviewing contractual force majeure clauses
Businesses should check their contracts for force majeure provisions and establish their scope and requirements.
Relying on force majeure
The relying party should gather as much evidence as possible to substantiate its claim of force majeure.
The effective closure of the Strait of Hormuz following the recent US-Israel strikes on Iran, and Iran’s wide-ranging retaliatory action, have triggered renewed disruption to global trade.
Shipping traffic through the Strait has collapsed, with major carriers suspending transits and insurers withdrawing war risk cover. Increasing attacks on shore infrastructure are sending shockwaves through supply chains. Against this backdrop of rapidly evolving geopolitical instability, force majeure (FM) clauses are once more in the spotlight.
Summary of Strait of Hormuz situation as of 9 March 2026
As of 9 March 2026, the Strait of Hormuz, a narrow waterway approximately 30 miles wide that separates Iran to the north from Oman’s Musandam enclave and the wider Arabian Peninsula to the south, remains effectively shut to most commercial traffic.
Passage through the Strait is severely limited and vessels are holding position either side of the Strait due to the threat of direct strikes, military warnings and the withdrawal of war risk insurance. The Islamic Revolutionary Guard Corps (ICRG), a branch of the Iranian military, has declared the Strait 'closed'; however, the Strait is technically open, with records indicating that there have been approximately 42 transits since 1 March 2026, although that is a fraction of typical traffic flows.
Reports indicate that Iran affiliated ships account for the largest percentage of these transits (approximately 12%), followed by Greek, UAE and Chinese affiliated ships. And while war risk insurance is available, costs have increased significantly. However, the threat level to vessels from missiles set by the Joint Maritime Information Centre is at ‘critical’, indicating that attacks are almost certain. At least nine vessels have reportedly sustained damage. Furthermore, concerns are mounting over electronic interference and collateral damage from missile interceptions.
In addition to strikes on vessels, strategic onshore locations, including oil refineries, export terminals and port storage facilities in Saudi Arabia, Qatar, Oman and the UAE have been targeted or damaged. Bulk carriers and tankers represent the largest proportion of vessels currently anchored or berthed in the Gulf. This will include in-bound vessels carrying food and feed commodities to countries in the region. Further, reports suggest that between a quarter and a third of the global trade in the raw materials for fertiliser production passes through the Strait, which heralds potential consequences for global food production.
As a result of the situation, many contracting parties have sought or are seeking to withdraw from, suspend or renegotiate their contractual obligations.
Overview of Force Majeure and Frustration under English law
There is no self-standing principle of FM under English law. The concept is entirely dependent on contractual terms, the intention of which is to excuse one or both parties from failure or delay in the fulfilment of their obligations as a result of events beyond their control. Whether FM can be invoked depends on the proper application of the contract terms.
The closest English common law concept to FM is frustration of contract. Where a contract is 'frustrated', it is automatically discharged (essentially, automatically terminated), the effects of which are set out in The Law Reform (Frustrated Contracts) Act 1943. Frustration occurs where a supervening event, without the fault of the contracting parties, makes performance impossible because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the parties to the contract. This is a high threshold, and neither mere inconvenience nor increased costs will suffice to cross it.
In the commodities context, unless a contract provides expressly for supply of a commodity from a particular source or origin, the supplier may be obliged to find an alternative source even if that makes the contract unprofitable. A party claiming frustration will likely have to show that the attacks in the Gulf and the situation in the area have fundamentally changed the parties’ performance obligations under the contract and have made further performance impossible, illegal or radically different from that which was originally contemplated.
Because frustration operates narrowly, it is very rare for the parties to sale contracts and contracts of carriage not to include FM clauses in an attempt to allocate risk. To the extent that a matter is covered by an FM clause, the law generally treats the doctrine of frustration as having been ousted by agreement. However, where there is no overlap, frustration remains relevant even if there is an FM clause.
Rising use of Force Majeure clauses by commodities suppliers
Since the start of the conflict on 28 February 2026, FM provisions have been invoked across a range of contracts. FM clauses are often, but not always, drafted in terms that provide greater protection to the seller or the shipper of the goods. The extent to which sellers can rely on FM clauses will depend on the wording and scope of the clause. Typically, FM clauses operate where performance of an obligation has been 'prevented' or 'delayed'. Some FM clauses set a lower bar, requiring the relying party merely to show that its performance has been 'hindered'. It is rare, but not unheard of, for FM clauses to be activated where performance has merely been 'rendered uneconomic', or similar.
In many cases, FM terms are incorporated by way of their inclusion in general terms and conditions (GTCs), which the parties have agreed are to form part of their agreement. For example, the BP Oil International Limited GTCs for Sales and Purchases of Crude Oil and Petroleum Products commonly feature in contracts for the sale of crude oil and its products, as do the Shell International Trading and Shipping Company Limited GTCs for Sales and Purchases of Products and Crude Oil and similar terms. These contain comprehensive, balanced FM provisions. Similarly, dry-bulk contracts frequently incorporate standard contract terms that contain FM provisions or clauses to a similar effect, such as those published by the Grain and Feed Trade Association (GAFTA), the Federation of Oils, Seeds and Fats Associations (FOSFA) or the Refined Sugar Association (RSA). All these commonly feature in trades into and out of the region.
Generally, to rely on FM, parties will need to be able to establish that the event said to delay or prevent performance meets the circumstances expressly set out in the relevant FM clause. In RTI Ltd -v- MUR Shipping BV [2024] UKSC 18, the Supreme Court confirmed that the party relying on FM must also show that it took reasonable steps to avoid or mitigate the effects of the FM event. However, those reasonable steps do not oblige a party to tender or accept performance that is different from that which the parties have agreed on in their contract.
Where an FM clause is present, the party seeking to rely on it will usually be required to show that:
the triggering event or state of affairs was beyond its reasonable control; and
the affected party could not avoid the triggering event or state of affairs by taking reasonable steps.
If those requirements are not expressly agreed, they will normally be implied. The burden of proof is on the party seeking to rely on FM. The FM clause sometimes sets out the evidential requirements that must be met; if so, the effect of the clause might be that meeting those requirements is a condition of reliance on FM.
Most FM clauses impose strict notice requirements, often stipulating both the form and the timeframe within which notice must be given. Depending on the contract terms, proper notice may be a condition precedent to relying on FM and a failure to comply may result in the party losing the right to suspend or cancel performance, or becoming liable for breach of contract, even where a qualifying FM event has occurred. Particular care is needed where, as is often the case, a contract contains strict provisions governing the format and timing of notices given under it. While it is not always the case that a failure to give proper, timely notices will preclude reliance on FM, the volatile environment will lead to significant exposure for sellers and buyers alike. In that environment, some sellers might feel tempted to make potentially questionable FM declarations, while buyers have an incentive to look for technical failings in and around the declarations they receive.
FM clauses offer varying remedies once FM has been validly triggered. These may include suspensions of performance for the duration of the FM event, automatic extensions of time for performance, and rights to cancel or terminate if the FM event continues beyond a specified 'longstop' period. FM clauses typically excuse delay and non-performance, operating to limit or exclude liability accordingly. In contracts where the price is determined by reference to a benchmark, the contract wording might allow sellers to benefit from suspension-only clauses when prices are rising, allowing them to 'wait out' the FM event and avoid selling at a lower contract price. Additionally, exercising a termination right can free up cargoes to be sold on the spot market at a higher price. Alternatively, for buyers, prolonged FM may give them grounds for cancellation to source replacement cargoes before prices rise still higher.
A party declaring FM without good grounds for doing so risks committing an anticipatory breach of the contract if the declaration amounts to a renunciation of its future obligations before performance is due. Such breaches occur where a party shows an intention no longer to be bound by the contract, whether by refusing performance (renunciation) or by stating it will only perform on terms that conflict with those agreed in the contract. This may entitle the counterparty to terminate the contract and claim damages. Therefore, parties considering declaring FM must be sure that they have carefully reviewed the contractual provisions to ensure that their declaration is valid and to avoid the risk of a termination alongside a claim for damages.
If faced with a declaration of FM from a supplier, parties in sale contract chains will need to consider the terms of their onward sale contract to check whether they can make a similar declaration to their own purchasers. In many cases, the fact that an intended supplier declares FM will not be sufficient to permit a declaration to be made down the contractual chain where alternative supplies might be available, even at great additional cost. The ultimate receiver of a cargo will be seeking alternative supply sources, particularly where they face shut-down risks in refining or processing facilities.
Important takeaways for clients to be aware of relating to Force Majeure
In anticipation of these disputes, it is recommended that stakeholders throughout the commodities supply chain undertake the following steps:
Review and understand your FM provisions now
Businesses should carry out an immediate review of their contracts to confirm:Whether an FM clause is expressly included and, if not, then to confirm the governing law of the contract, to assess whether the civil law doctrine of FM applies.
How an FM event is defined; some FM clauses lean towards events preventing the seller from effecting shipment or delivery at the loading port.
The kind of impediment for which the clause provides: is prevention necessary, or is delay or hindrance enough?
What notice and evidence requirements and consequences the clause provides for, not forgetting the notices provisions that might be found elsewhere in the contract or in the applicable GTCs.
Whether the events in question allow reliance on the FM clause and, if so, at what point can a declaration safely be made without committing an anticipatory breach of the contract?
What the position is under any on-sale agreements; are the contracts on back-to-back terms, or is there exposure from different provisions?
Maintain a bank of evidence of the FM event, and reasonable steps taken to avoid or mitigate the event
It is crucial to ensure the preservation or gathering of evidence to prove not only that the event has occurred, but also that is has prevented, delayed or hindered performance in accordance with the governing FM terms. This may include gaining official statements (e.g. from chambers of commerce or government sources), and exploring alternative load ports, routings, suppliers, logistical arrangements or storage solutions, but it does not require accepting a different form of performance from that which was contractually agreed.
Maintain effective communications
While it is important for a relying party to reserve its rights and avoid prejudicing its position, it is often prudent to keep contractual counterparties informed of developments. Doing so can reduce commercial friction, allow counterparties to manage their own commercial positions with third parties, and avoid the risk that silence or poor communication might give rise to a dispute. Some FM clauses contain positive obligations to keep the counterparty informed and to supply evidence on a rolling basis, non-compliance with which can prevent reliance on FM or at least give rise to a claim for damages.
Consider amendments to future and long-term supply contracts
Where commercial relationships allow, it may be possible to renegotiate pricing mechanisms and delivery obligations to legislate for the present interruptions to commerce in the region. Care must be taken, however, when making proposals to revisit contract terms so as to avoid any suggestion of an anticipatory breach (e.g. by stating that performance will only be possible in future if the contract price is increased).
Conclusion
The strikes across the region and the resulting de facto closure of the Strait of Hormuz had been anticipated in view of recent geopolitical events, but the scale of the disruption and its knock‑on effects are no less far‑reaching for that.
While the severity of the consequences will depend heavily on the duration of the closure and ongoing military activity, FM declarations are already rising. Careful analysis of contract wording, mitigating steps and future risk allocation will therefore be essential for businesses seeking to navigate this period of uncertainty.
This article was co-authored by Griff Gough-Walters, Trainee at Hill Dickinson.
