Iran War: Force Majeure, Charterparty Disputes, Benchmark Failure, and Sanctions Payment Disputes Now Converging — Litigation Expected to Accelerate

The ceasefire periods in June and late July 2026, followed by resumed hostilities, have created a litigation-accelerant dynamic in which parties that paused commercial disputes during ceasefire negotiations are now converting those positions into formal proceedings. Mishcon de Reya's August 3 analysis identifies the primary dispute categories: (1) force majeure and war-risk clause invocations for vessels re-routed or unable to transit the Strait of Hormuz; (2) charterparty disputes between owners and charterers over safe-navigation courses of action; (3) insurance coverage disputes for losses arising from route closures and vessel disruption; (4) benchmark-failure claims (Mercuria v. Baltic Exchange, expedited hearing October 26); and (5) sanctions-related payment disputes, including potential toll payments to Iranian entities. The physical infrastructure dimension is significant for the medium term: DP World has reached an agreement with Fujairah Ports Authority to develop two new container terminals and two new general cargo terminals on the UAE's east coast (Gulf of Oman, outside the Strait of Hormuz), and the UAE has accelerated the West-East Pipeline to increase ADNOC export capacity through Fujairah. For partners in shipping, energy, commodities, and insurance: the force-majeure analysis under English law is particularly important to communicate to clients now: English law imposes a high threshold before contractual performance is considered "impossible," and higher performance costs alone will generally not excuse a party from breach in the absence of clear contractual wording. Clients whose contracts do not contain explicit Strait of Hormuz or war-risk provisions are at material risk of being held in breach despite genuine operational disruption.