The shipping world watched with relief when, in early August 2022, the first stranded vessel (the "RAZONI") safely navigated the "grain corridor" out of Ukrainian waters. Within days of this event, the first commercial vessel (the "FULMAR S") was steaming back the other way, ready to load a cargo. Whilst operating within a conflict zone is an acceptable risk to some, careful consideration should be given to the legal issues which have emerged since the start of the war. 

Firstly, attention should be given to ensuring that contractual obligations and the allocation of risk are consistent throughout the contractual chains and insurance policies. Therefore, should a potentially frustrating or force majeure event occur (e.g. extended detention), a party is not left in the position whereby it is bound to the terms of one contract but cannot enforce its obligations under another contract. When negotiating or renegotiating contracts, standard form wording should be carefully considered to account for the shift in risk since the start of the war in Ukraine

Secondly, it remains a truism that "operational" problems can quickly lead to legal ones. Crew nationality issues, stevedore shortages, damaged loading equipment, availability of tugs and concerns over cargo quality continue to hamper commercial shipping in Ukraine. These, in turn, affect the abilities of parties to complete their contractual obligations. Therefore, only with a full appraisal of the reality on the ground can an operator understand the risks being run and mitigate them, price them and insure against them appropriately. 

Lastly legal advice should be sought as early as possible if an incident occurs as a result of the hostilities. It is often in the early stages of an incident that crucial decisions need to be taken - often with consequences that result and impact upon lengthy disputes and litigation. Lawyers experienced in the nuances of operating in conflict zones can add value to the decision-making - backed by legal privilege.

 

HFW is widely regarded as the leading global law firm with the expertise to respond to incidents in complex and hostile environments. Our Complex Environments team specialises in advising those operating in high-risk jurisdictions. The team represents the owners/insurers of 17 vessels detained in Ukraine. Richard Neylon will be presenting on this topic at IUMI Chicago.