THE threat to shipping in the Red Sea has now reached a pitch at which many owners can likely refuse orders under standard BIMCO charterparty clauses, according to maritime law experts.

The development comes as attacks on shipping in the key waterway — essential for vessels using the Suez Canal either way — have escalated dramatically in recent days, with US and UK naval forces deployed under Operation Prosperity Guardian shooting down 18 Houthi drones on Tuesday night.

The issue remains a judgement call, with several leading law firms declining to comment on the record, as they wish to retain freedom to take cases either way.

Most lawyers believe that the situation is obviously at a point where owners have a credible case if they consider it too risky to make the trip.

But this is not cut and dry, they stressed, and sources indicated that disagreements between owners and charterers are already happening.

Some owners have instructed shipping specialist KCs to prepare legal opinions that they have the right to reroute, Lloyd’s List understands.

Parts of the Red Sea have long been classified as war risk areas by the Joint War Committee of the Lloyd’s and London companies markets, thereby attracting additional premiums, and the waters so designated were extended last month.

In charterparty terms, standard war risk clauses such as the Conwartime clauses seen in many dry bulk contracts or the Voywar clauses incorporated in BIMCO’s general purpose Gencon charterparty give owners substantial discretion on whether to put their ships in harm’s way.

However, matters are not quite as open and shut as they would probably seem to the person in the street. Owners need to be able to make a case before declining orders from charterers, lawyers following the situation argued.

The 2013 wording of Conwartime sets the threshold at war or a wide range of hostile acts undertaken by “any person, body, terrorist or political group, or the government of any state or territory whether recognised or not”, which “in the reasonable judgement of the master and/or the owners, may be dangerous or may become dangerous to the vessel, cargo, crew or other persons on board”.

War risk clauses in tanker charters, such as Shelltime and Shellvoy charters, are more restrictive, and may not apply except in the case of formally declared hostilities.

JWC listed areas can be incorporated into charters as areas where the vessel is not allowed to trade or trade is restricted, and notification to underwriters is required.

Where ports are legally unsafe, owners are entitled to refuse to proceed, even if there is no applicable war risk clause in the charterparty. Charterers would be in breach of safe port obligations were they to require owners to do so.

Contracts will additionally need be checked to see whether any bespoke provisions affect an owner’s legal position.

Case law from the Ocean Victory in 2017 defines the relevant question as whether a reasonable shipowner, trading the ship for its own account and knowing the relevant facts, would proceed to the nominated port.

But shipowners have historically shown varying degrees of risk appetite. Many have made large amounts of money from a willingness to continue port calls in tense political circumstances, while others have shown more caution.

However, Conwartime and Voywar clauses are not automatically triggered. It therefore falls on the owner and/or master to make a strong case for the need to refuse order.

A leading shipping KC, who asked not to be named, confirmed that he is currently preparing opinions on this matter for clients.

The 2013 wording, which is still current, was introduced after a case called Triton Lark, which arose in 2008, when Pacific Basin instructed a supramax to carry a consignment of bulk potash from Hamburg to China via the Middle East Gulf.

In view of the Somali pirate threat at that time, the owner routed the vessel via the Cape of Good Hope at considerable extra cost, citing the 1993 wording. In consequence, the “reasonable judgement” test was made easier to apply.

“Before, there was a more complicated wording that required an analysis of the probability of exposure to war risks. Now you just have to ask, in very broad terms, is the situation dangerous?” said the shipping KC.

“Most people, looking at it, would say the threshold is met. What I would say is that it’s important that the analysis is vessel specific.

“It’s not just a question of whether there is danger to shipping generally. It’s whether there is danger to the particular vessel.”

For instance, the pattern of attacks to date appears to put boxships at higher risk, and pronouncement from leading Houthi figures have pointed to a specific animus against tonnage with Israeli links.

On the other hand, charterers will probably point out to the high success rate of Operation Prosperity Guardian in stopping drones and missiles, which could be seen as reducing the dangers.

“Make sure you have carried out a proper assessment of the risks to your vessel at the time of making a decision,” he advised.

Chris Moxon, claims director at P&I club NorthStandard, said that entitlement to refuse to proceed with a voyage through the Red Sea will need to be assessed on a case-by-case basis.

“Aspects such as a vessel’s ownership and trading pattern, and the security risks in the particular location and at the time in question, are all likely to be relevant when applying the test. The test may well be satisfied in some instances and may well not be in others,” he added.

Decisions will often need to be taken quickly, but a definitive answer as to whether the Conwartime or Voyest tests have been satisfied may take time, if a definitive answer can be provided at all in some cases.

“Shipowners and charterers may be able to avoid the time required for such an assessment and avoid the uncertainty as to whether a refusal to proceed is permissible under charterparty terms, by reaching an amicable agreement as to any variations to voyage orders through commercial discussions.”