Sanctions, War Risk Insurance, and Arbitration: The New Maritime Risk Triangle in 2026

Disputes arising from this environment are already flowing into arbitration centres in Singapore and London. The claims I am seeing — and expect to see more of — cluster around three areas: cancellation and frustration of charterparties following sanctions designations; repudiation of insurance cover on war risk or sanctions grounds; and force majeure defences invoked by parties caught between conflicting obligations.

What is emerging from early awards and court decisions is that tribunals are scrutinising the contractual architecture closely. Force majeure clauses that do not expressly capture sanctions events are being construed narrowly. Cancellation clauses that refer to “illegality” without defining the governing law for that assessment are creating forum and choice-of-law complications. Parties who failed to document their compliance efforts contemporaneously are finding it difficult to establish good faith. A striking illustration of these themes is the English Commercial Court’s 2025 decision in Tonzip Maritime Ltd v 2Rivers Pte Ltd [2025] EWHC 2036 (Comm). The owners of the Catalan Sea refused to load a cargo of Russian oil at Primorsk, invoking a sanctions clause in the charterparty on the basis that the shipper was connected to a designated person. The court rejected the owners’ position — not because the sanctions clause was unworkable in principle, but because the owners had failed to demonstrate that their decision to refuse was one that a reasonable shipowner could have made on the material available at the time. The clause was construed narrowly, the evidential threshold for invoking it was not met, and the owners’ counterclaim failed. The charterers’ claim succeeded.

The case crystallises two points that practitioners and commercial parties must internalise. First, a sanctions clause in a charterparty is only as effective as the evidence base on which it is invoked — third-party screening tools are a starting point, not a substitute for legal judgment. Second, sanctions clauses that are drafted broadly, without clear allocation of the evidential burden or a defined standard of decisionmaking, will be construed against the party seeking to rely on them. The lesson is not that owners cannot protect themselves through sanctions clauses; it is that those clauses must be drafted with precision, and the decision to invoke them must be documented carefully and made in real time.

The UK Court of Appeal subsequently allowed the owners’ appeal — Tonzip Maritime (Singapore) Pte Ltd v 2Rivers Pte Ltd [2026] EWCA Civ 641 — holding that the relevant threshold under a sanctions clause is not proof that sanctions would have been breached, but an objectively reasonable judgment that a real risk of exposure existed. The appellate court found the trial judge had set the bar too high. Taken together, the two decisions offer a more nuanced picture: sanctions clauses can provide genuine protection, but only if drafted with precision and invoked on the basis of a well evidenced, contemporaneously documented assessment of risk.

Arbitration is an effective mechanism, but it is not a substitute for contractual foresight. The cases that resolve most efficiently — and at least cost — are those where the parties drafted clearly, documented carefully, and engaged counsel early.