Holman Fenwick, Watson Farley in Gulf war shipping litigation

Holman Fenwick & Willan and Watson Farley & Williams are engaged in the early stages of disputes stemming from decisions by chartered ships not to deliver goods to Iraq prior to the outbreak of hostilities because of the risk of being embroiled in a war zone.
The disputes centre on losses suffered by cargo-owners, which are in dispute with either shipowners or the parties that chartered their ships, arising out of the late or non-delivery of goods, most of which were bound for Iraq under its food-for-oil programme. Litigation is in its early stages, although shipping chambers such as 20 Essex Street and 4 Essex Court are likely to be instructed in the near future.
In some cases, Iraq-bound cargoes have been offloaded in safe regions in the Gulf and stored for future transportation to Iraq. According to maritime barrister David Lewis of 20 Essex Street, other charterers are putting anchor at the entry of the Gulf in the hope that the war will end in a week or so, freeing them to complete their journeys. The delay costs many tens of thousands of pounds a day for the charterers.
Now that the Gulf conflict has started, another key issue facing charterers and shipowners is the liability for payment of ships that have suffered disruption to their voyages. Lewis said the outcome will depend ultimately on the courts’ interpretation of the law of frustration, which releases parties from their obligations if “independent supervening circumstances have arisen” which makes the performance of contracts either impossible or radically different from what was originally envisaged.
Lewis said one of the issues that the court will be considering is the extent to which the current conflict could have been foreseen. If so, the law of frustration may have a lesser effect.