Red Sea and Gulf of Aden – Update

We have received several inquiries regarding the current situation in the Red Sea and the Gulf of Aden, particularly concerning the possibility of deviating to avoid these areas. We summarize the situation as follows:

1. Deciding to deviate to avoid the Red Sea may have implications for P&I cover, as it could be seen as an unjustified deviation, potentially leading to a loss of cover. Before making such a decision, we strongly recommend that members contact the NNPC to assess the potential risks.
2. Prior to determining if rerouting the vessel is an option, we advise owners to thoroughly review their contracts to confirm their contractual entitlement to do so.
3. For new contract negotiations, we suggest that members include an appropriate liberty provision in their carriage contracts, allowing them to reroute to avoid affected areas.
4. In case of disputes arising under existing contracts, the legal position must be assessed on a case-by-case basis due to the rapidly evolving and unpredictable nature of the situation. Particular attention should be given to the applicable “war risk” clause. When examining the BIMCO clauses:
   1. Under CONWARTIME 2013, owners can refuse charterers’ orders to transit an “area” if, in the reasonable judgment of the Master and/or the Owners, it may expose the vessel, cargo, crew, or other persons on board to War Risks.
   2. Under VOYWAR 2013, prior to the commencement of cargo loading, owners may cancel the charterparty or refuse to perform if it may, in the reasonable judgment of the Master and/or the Owners, expose the vessel, cargo, crew, or other persons on board to War Risks. Owners must first give charterers an opportunity to nominate an alternative safe port for loading or discharging.
   3. The test for determining whether owners have a basis to refuse to proceed is therefore subject to whether an area is deemed dangerous in accordance with the relevant clause. Owners must be able to provide evidence that an area may be dangerous or become dangerous for the vessel, cargo, crew, or other persons on board. Owners must conduct their own appropriate risk assessments before deciding to invoke the charterparty.
5. It’s important to note that if owners refuse to proceed through the Red Sea or Gulf of Aden, and charterers’ instructions are found to be lawful, owners’ refusal to follow those orders may result in substantial claims for damages. Therefore, we recommend that members carefully consider any decisions in this regard. When sailing through these areas additional cover including for “War Risks” will be necessary.

Finally, we refer to the recently published Combined Maritime Forces (CMF) Guidance, which can be accessed here. The guidance note informs that Operation PROSPERITY GUARDIAN has now commenced, and vessels transiting the Southern Red Sea should be aware of a significant increase in the number of coalition warships and aircraft operating in the area as part of this operation.