How to Read a Charter Party's Force Majeure Clause Before You Sign
Force majeure sits near the back of most charter parties, tucked between the arbitration clause and the BIMCO rider blocks, and is consequently one of the last provisions anyone reads carefully. That ordering is a navigational hazard. A poorly drafted or poorly understood force majeure clause can strand a shipowner with an off-hire vessel, expose a charterer to demurrage claims it assumed were covered, or trigger competing obligations under two separate contracts simultaneously — sometimes all three at once.
This article walks through the practical mechanics of force majeure in voyage charters, time charters, and contracts of affreightment, using realistic operational scenarios to show where the exposure actually lives and what pre-signing diligence looks like in practice. Six drafting checkpoints are introduced at the end — each one corresponding to a category of dispute that reaches arbitration every year.
What Force Majeure Actually Does — and Does Not Do
Contrary to popular assumption, force majeure is not a general escape hatch from inconvenient performance. Under English law — which governs the majority of internationally traded charter parties — there is no implied force majeure doctrine. The clause only exists if it is expressly written into the contract, and it only covers events that are explicitly listed or fall clearly within the drafting.
A party seeking to invoke force majeure under English law must typically satisfy three cumulative tests:
- The event must be listed or unambiguously within the clause's scope. Strikes, port closures, acts of war, and natural disasters are standard inclusions; supply-chain congestion, port congestion caused by vessel surpluses, and bunker shortages frequently are not — and their absence from the list is rarely accidental on the part of sophisticated counterparties.
- The event must be beyond the reasonable control of the invoking party. A charterer that nominated a port it knew was subject to active sanctions cannot later invoke force majeure when the vessel is refused entry. Foreseeability at the time of contracting is a recurring battleground at LMAA arbitration.
- The event must have actually caused the failure to perform — not merely increased the cost or inconvenience of performance. This causation requirement defeats many force majeure arguments. Rising freight costs, unexpected bunker price spikes, or a tightened port schedule do not, by themselves, constitute a causative force majeure event under English law.
If the clause is absent entirely, the only common law backstop is the doctrine of frustration — a remedy with an extremely high threshold that succeeds in very few commercial shipping disputes and that discharges the contract entirely rather than suspending it.
Scenario 1: Port Closure During a Voyage Charter
A Panamax bulk carrier is fixed on a voyage charter from Tubarao to Ventspils carrying iron ore. Three days before the vessel's ETA, Ventspils port authority issues a notice of temporary closure due to ice conditions in the approach channel — an event expressly listed in the charter's force majeure rider.
The shipowner nominates an alternative discharge port, but the charterer insists on waiting for Ventspils to reopen. The vessel sits at anchorage for nine days before the port reopens.
The clause question: Does force majeure suspend the charterer's laytime obligation? Does it suspend the owner's obligation to proceed with reasonable despatch? Who bears the bunker cost at anchorage, running at roughly USD 14,000 per day on a Panamax at slow steam?
In most GENCON-based charters without a carefully tailored rider, laytime runs once NOR is tendered — ice conditions or no ice conditions. Force majeure clauses typically suspend performance obligations, not laytime counting, unless the clause explicitly states otherwise. If the rider is silent on the laytime interaction, the charterer is almost certainly accumulating demurrage while waiting for a port reopening it cannot attribute to the owner.
The bunker cost question is equally pointed. If the owner's obligation to proceed is suspended by force majeure but the charterer's laytime obligation is not, the vessel sits in a contractual limbo: the owner cannot compel the charterer to accept an alternative port, and the charterer cannot compel the owner to bear the anchorage costs. That ambiguity is litigated.
Practical action: Before signing, confirm whether the force majeure clause explicitly references laytime suspension, and if so, which party bears the burden of proving the qualifying event and its duration. Confirm separately how anchorage bunker costs are allocated during a force majeure period. These two drafting points, together, can represent six-figure exposure on a single handy-sized bulker fixture.
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Scenario 2: Sanctions Designation During a Time Charter
A product tanker is three months into a two-year time charter when a cargo counterpart of the charterer's trading arm is added to the OFAC Specially Designated Nationals list. The charterer continues to issue voyage orders as before, directing the vessel to call at ports that would now place the owner in breach of U.S. primary sanctions.
The owner refuses the orders on legal advice. The charterer claims that the sanctions designation constitutes a force majeure event entitling it to suspend hire payments during the period when its intended trading pattern is commercially impractical.
The clause question: Sanctions are a force majeure event only if the charter explicitly says they are. Many older NYPE forms — and a meaningful proportion of post-2010 fixtures — treat sanctions as a separate trading warranty regime entirely rather than as force majeure. The Shelltime 4 sanctions clause and the BIMCO SANCTIONSCLAUSE 2020 are the most familiar examples; they establish distinct notice, suspension, and termination rights that operate independently of the force majeure framework.
If the charter is on an amended NYPE 2015 form incorporating the BIMCO sanctions clause, the owner likely has a right to suspend performance and a right to terminate after a defined notice period — typically 30 days. Hire continues to accrue during the notice period. Invoking force majeure in this scenario is not just ineffective; it may prejudice the owner's ability to rely on the sanctions clause's specific termination trigger if force majeure and sanctions are treated as mutually exclusive regimes in the rider.
Practical action: Before signing any time charter with a trading area extending to jurisdictions carrying elevated sanctions risk — currently including Russia, Iran, Venezuela, Myanmar, and North Korea — map out which clause governs which risk. Force majeure, war risks (CONWARTIME 2013 or VOYWAR 2013), sanctions, and trading limits are four distinct contractual regimes. Their interaction in edge cases — a sanctions designation that is also an act of state, for example — must be resolved in the rider language rather than left to arbitrators who will be working from an ambiguous text.
Scenario 3: Strike at Loading Port on a COA
A contract of affreightment obliges a charterer to ship 600,000 tonnes of coal over twelve months in six equal parcels. A prolonged stevedore strike at the loading terminal means the third shipment cannot be loaded within the agreed laycan window. The charterer invokes force majeure under the COA's BIMCO 2022 Force Majeure Clause.
The owner had already positioned the vessel at the berth and tendered NOR. Bunker costs during the delay are running at approximately USD 18,000 per day. The vessel has a subsequent fixture commitment that the delay will likely cause it to miss.
Three sub-questions arise simultaneously:
- Is this strike covered? The BIMCO 2022 Force Majeure Clause includes "strikes or lockouts" but limits coverage to those affecting "the performance of the relevant obligation" — not every third-party labour dispute at a terminal the charterer uses. Whether a stevedore strike qualifies depends on how the COA defines performance obligations and whether the strike is at a terminal specifically nominated in the contract or is a general industry stoppage.
- What obligations does force majeure actually excuse? In a COA, the charterer typically has an obligation to provide cargo and an obligation to pay freight. Force majeure may suspend the cargo provision obligation without automatically suspending the freight payment obligation for a shipment that has already been loaded — and the interaction between these two obligations in a partial-cargo or delayed-loading scenario is rarely addressed with precision in standard forms.
- Has the charterer complied with the notification obligation? The BIMCO 2022 clause requires written notice as soon as practicable and in any event within a specified period after the triggering event becomes apparent. Many COAs carry a 48–72 hour notification window. Late notification is consistently one of the most common grounds on which force majeure invocations fail at LMAA arbitration — it is treated as a procedural prerequisite, not a formality that can be waived.
Practical action for charterers: Set an internal calendar trigger — ideally a documented escalation protocol in your operations manual — the moment a potential force majeure event materialises. Assign a named individual responsible for drafting and dispatching the notice. Preserve all contemporaneous evidence of the triggering event: port authority notices, terminal operator communications, and labour union announcements.
Practical action for owners: Scrutinise the notice received. Check the timestamp, the recipient named in the charter's notice clause, and whether the form of notice complies with the contract. Late notification, incorrect recipient, or oral-only notification are each individually valid grounds to reject the invocation and claim demurrage from the date NOR was originally tendered.
Key Drafting Checkpoints for Any Charter Party
Before executing a charter, both sides should run the force majeure clause against the following six checkpoints. These are not abstract legal points — each corresponds to a category of dispute that appears regularly in reported LMAA and ICC arbitration decisions.
1. Exhaustive List vs. Catch-All Language
Some clauses use an exhaustive and closed list of qualifying events. Others append catch-all language such as "any other event beyond the reasonable control of the parties" or "any other cause of a similar nature." Catch-all language favours the invoking party; exhaustive lists favour the resisting party. Know which regime you are operating under before you agree to the wording, not after the event occurs.
2. Does the Clause Suspend or Terminate?
Most force majeure clauses in charter parties are suspension clauses — they pause the obligation rather than discharge the contract. Termination rights usually require a separate trigger, typically a defined period of continuing force majeure (commonly 30 or 60 consecutive days, though this varies by form and negotiation). If your commercial model requires a termination right — for example, in a multi-year COA where a prolonged port closure destroys the economic basis of the arrangement — make sure that right is explicitly drafted with a clear notice mechanism and a defined notice period.
3. Laytime and Hire Interaction
This point deserves its own checkpoint rather than being buried in the suspension/termination discussion. Force majeure clauses in charter parties frequently fail to address laytime explicitly. The default position under English law is that laytime runs unless the clause says otherwise. If you are a charterer seeking laytime protection during a force majeure period, you need an express rider clause. The absence of that clause will be read against you.
4. Mitigation Obligations
Nearly every well-drafted force majeure clause imposes an express duty to mitigate the effects of the force majeure event and to resume performance as soon as reasonably practicable. This obligation has practical teeth: if a vessel owner directs a vessel from a closed port to an alternative anchorage that incurs demonstrably higher costs when a cheaper option was available, that mitigation decision can be challenged at arbitration. Document the decision-making process contemporaneously, including the alternatives considered and the reasons for rejecting them.
5. Notice Mechanics
Check four elements of the notice requirement: (a) the period within which notice must be given after the event materialises; (b) the named recipient and any copy recipients; (c) the required form — written notice is standard, email is generally acceptable under English law but should be confirmed in the charter's notice clause; and (d) whether notice is required to be copied to P&I clubs, mortgagee banks, or flag state authorities. Some modern tanker charters include a requirement to notify the vessel manager. Missing any of these elements can invalidate an otherwise legitimate invocation.
6. Interaction with Adjacent Clauses
Force majeure must be mapped against at minimum four adjacent regimes: war risks clauses (CONWARTIME 2013 or VOYWAR 2013), trading limits, sanctions provisions, and off-hire clauses. A port closure caused by military action may simultaneously trigger the war risks clause, the force majeure clause, and the off-hire provision — and each regime may allocate risk differently. Overlapping and potentially contradictory regimes create arbitration arguments that benefit neither party and generate legal costs that erode the commercial value of the fixture. Resolve the interaction in the rider before signing.
Stay ahead of regulatory and contractual developments in dry bulk and tanker markets — browse the latest commentary on our blog.
A Note on Governing Law
The analysis above applies primarily to charter parties governed by English law. If your fixture is governed by a different jurisdiction, the analytical framework changes materially and in some cases fundamentally.
Under U.S. law, the doctrine of commercial impracticability (UCC § 2-615) and the common law doctrine of impossibility offer statutory and judicial backstops that English law does not provide. These doctrines lower the threshold for excused performance, though they remain difficult to invoke in commercial contexts.
Under Norwegian law — which governs many offshore and North Sea contracts — force majeure concepts are embedded in both statute and standard form contracts such as the Norwegian Saleform, and the interaction between contractual and statutory regimes requires separate analysis.
Under French and German civil law, force majeure and imprévision (hardship) are distinct doctrines with different triggering thresholds and different remedial consequences. Imprévision — which addresses fundamental changes in the economic equilibrium of the contract rather than physical impossibility — has no equivalent in English law and can produce significantly different outcomes in prolonged market disruption scenarios.
Always confirm governing law and the arbitral seat before applying any general principles from this or any other article. In fixtures involving multiple parties under different law systems — common in back-to-back COA and sub-charter arrangements — legal opinions from counsel in each relevant jurisdiction may be warranted before execution.
Takeaway for Operators and Chartering Desks
Force majeure clauses are routinely dismissed as boilerplate — until a real event triggers them and the commercial stakes clarify thinking rapidly. The operational scenarios above represent categories of disputes that reach arbitration every year across the LMAA, ICC, and SCMA panels. The difference between a successful invocation and a failed one almost always comes down to drafting precision applied before the fixture is concluded, not legal argument assembled after performance has broken down.
Read the clause. Map it against the other risk provisions. Confirm notice requirements and assign named internal accountability for compliance. Resolve interactions between force majeure, war risks, sanctions, and off-hire in the rider. Do all of this before signing — not at 02:00 when the port closure notice arrives and commercial pressure is at its highest.
For further reading on how port delays, off-hire regimes, and war risk clauses interact with charter party obligations in specific trading regions, see the related analysis on our blog.