Addressing Impacts And Solutions In The Wake Of Red Sea Disruptions

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Mfame Editor
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  • The maritime industry faces disruption following Houthi rebel attacks on vessels in the Red Sea, particularly at the Bab al-Mandab Strait, a crucial sea passage.
  • The charterparty implications for ships transiting the Red Sea are significant, prompting carriers to adjust their networks to navigate these challenges.

Route Considerations

Charterparties generally stipulate the vessel’s route. If not specified, the “usual” or “customary” route is expected. Given the evolving situation in the Red Sea, carriers are revising their networks, leading to fewer direct port calls and an increased use of transshipment hubs, especially in the Mediterranean.

War Risks Clauses

Charterparties often include war risks clauses. The engagement of such clauses depends on the definition of “war risk.” Carriers may refuse orders to proceed through the Red Sea based on the assessment of exposure to war risks, and deviations may trigger off-hire provisions.

Common Law Position

In the absence of explicit clauses, common law provides grounds for refusing orders and deviations, with a higher threshold for danger. Deviation for saving lives at sea is allowed.

Remedies and Damages

Charterers can claim damages for unjustified deviations, while owners may seek damages if the vessel incurs losses due to charterers’ breach. Off-hire provisions may apply in cases of deviation.

Cancellation and Frustration

Charterparties may contain clauses allowing cancellation if vessels face war risks. Frustration of a contract depends on its nature and the impact of changing circumstances. Safety considerations and cooperation between owners and charterers are crucial in navigating these challenges.

Practical Steps Forward:

1. Prioritize safety.
2. Assess the risk and gather evidence.
3. Cooperate to find solutions.
4. Adhere to notice requirements for refusal based on war clauses.
5. Consider additional clauses in new charterparties to address Red Sea passage and allocate associated risks.

The maritime industry is adjusting to the disruptions caused by the Red Sea situation, with carriers and charterers collaborating to find effective and safe solutions.

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Source: Skuld

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