In wartime, we count ships, barrels and prices.
A second, longer battle follows in arbitration rooms. Eight months after the US
Israeli war with Iran began on 28 February 2026, the Hormuz crisis has entered
that phase, where words signed years ago matter more than missiles.
اضافة اعلان
Before the war, around one-fifth of global oil
consumption and nearly one-fifth of global LNG trade passed through the Strait.
October saw a
sharp escalation in attacks on shipping, while oil flows through the Strait
fell significantly, reflecting the growing disruption to maritime traffic.
Gas fared worse. QatarEnergy halted LNG
production on 2 March after attacks on Ras Laffan and Mesaieed, and declared
force majeure on 4 March.
Qatar supplied about one-fifth of the world's LNG,
with approximately 93 per cent of its LNG exports passing through Hormuz.
ICIS data cited by Reuters show only 18 Qatari
cargoes in the war's first six months, against 509 a year earlier.
On 27
October, Italy's Edison reported an extension to end-December, covering 38
cargoes, about five billion cubic metres.
Each notice ripples through buyers, shipowners
and insurers. The argument is simple: war creates the event, but the contract
decides who carries the loss.
Why War Alone Is Not Enough
War is not automatically force majeure. Force
majeure is a narrow exception: a pre-agreed allocation of risk, not an exit
from an unprofitable bargain. Depending on the clause and governing law, the
invoking party must typically prove that the event falls within the contractual
definition; that it prevented, or where so provided materially impeded,
performance rather than merely making it costlier; that it caused the failure,
with notice and reasonable mitigation; and that it was unforeseeable, or outside
the risks assumed, at signing.
Impossible, or Just More Expensive?
English law, which governs much energy and
shipping trade, has faced this before. In Tsakiroglou v Noblee Thorl ([1962] AC
93), the House of Lords held that the closure of the Suez Canal in November
1956 did not frustrate a contract for the sale of Sudanese groundnuts to
Hamburg.
The Cape route remained available, despite being more than twice as
long and considerably more expensive.
Hormuz is different. The International Energy
Agency notes there is no alternative route for Qatari gas to reach the global
LNG market. When no ship can sail around the problem, the argument shifts from
cost to impossibility.
The UK Supreme Court drew a second boundary in
RTI v MUR Shipping ([2024] UKSC 18): absent clear wording, reasonable
endeavours do not oblige a party to accept non-contractual performance, there
payment in euros instead of dollars. Higher cost is not impossibility, and no
party can be forced into a workaround it never agreed to.
Proof Before Claims
Claims are won on evidence. In Classic Maritime
v Limbungan Makmur ([2019] EWCA Civ 1102), after a 2015 Brazilian dam collapse
disrupted iron ore supply, the Court of Appeal rejected a charterer's defence
because it could not show it would otherwise have performed.
That "but
for" logic, though tied to the clause's wording, is unforgiving: a seller
already short of cargo cannot blame the war.
Data will be contested too: the IMF's AIS-based
PortWatch misses vessels that switch off transponders, while Kpler's route
reconstruction yields different counts. Arbitrators will ask: if others
transited, why not you?
That is why a force majeure notice is not a
press release. Companies must keep notices, routing and tracking records,
insurer and supplier correspondence, and proof of efforts to find alternatives.
Edison replaced 27 of its 38 cargoes, about 2.7 billion cubic metres, and met
all customer commitments: precisely the mitigation evidence tribunals reward.
Because institutions such as the LCIA do not routinely publish awards, public
precedents are scarce. What is not recorded today may be impossible to prove
tomorrow.
Foreseeability: The Hardest Test
On 22 June 2025, Iran's parliament endorsed
closing the Strait, leaving the final decision to the Supreme National Security
Council. Contracts signed after that warning, let alone after 28 February 2026,
will struggle to call closure unforeseeable.
Nor will a ceasefire end the argument. A
Pakistan-mediated truce in April and a June memorandum of understanding
preceded the US President declaring the ceasefire over on 8 July, amid renewed
American strikes.
The question is whether performance remains prevented by
unsafe waters, restrictions or unavailable insurance, and notices must be
renewed or withdrawn as facts change.
Hardship Is Not Force Majeure
One of the costliest mistakes is relying on the
wrong legal doctrine. The UNIDROIT
Principles of International Commercial Contracts, issued by the International
Institute for the Unification of Private Law, offer useful guidance on the
difference between hardship and force majeure. Hardship occurs when unexpected
events make performing a contract excessively costly and seriously change its
economic balance, However, increased costs alone do not establish hardship, and
requesting renegotiation does not automatically entitle a party to suspend performance.
Force majeure, on the other hand, applies when an event beyond a party’s
control prevents it from fulfilling its contractual obligations. A sharp rise
in shipping costs may amount to hardship if it seriously affects the balance of
the contract, while the complete closure of a key supply route may amount to
force majeure if there is no reasonable way to overcome it. Confusing the two
can weaken an otherwise strong legal claim.
Why Arbitration?
Arbitration provides a neutral, specialised and
private forum for resolving cross-border commercial disputes, with foreign
arbitral awards recognised and enforceable across contracting states under the
1958 New York Convention, subject to its conditions and limited grounds for
refusal.
The revised ICC Arbitration Rules, which entered into force on 1 June
2026, introduce important procedural improvements, including early
determination of claims or defences that are clearly without merit or outside
the tribunal’s jurisdiction, preliminary orders in emergency arbitrator
proceedings, the removal of mandatory Terms of Reference, and an increased USD
4 million threshold for the automatic application of expedited proceedings to
arbitration agreements concluded on or after that date.
Investment disputes
between foreign investors and host states, however, are governed by a separate
legal framework. The International Centre for Settlement of Investment Disputes
(ICSID), an autonomous international institution within the World Bank Group,
was established1965 ICSID under the Convention to provide facilities for the
conciliation and arbitration of qualifying investment disputes.
Its
jurisdiction requires, among other conditions, a legal dispute arising directly
out of an investment, involving a contracting state and a national of another
contracting state, together with the parties’ written consent. Unlike
commercial arbitral awards, ICSID awards benefit from a separate recognition
and enforcement regime under the
Convention, requiring contracting states to
recognise their binding character and enforce their pecuniary obligations as if
they were final judgments of their own courts, subject to the Convention’s
provisions on sovereign immunity from execution.
The distinction has practical significance. In
March 2026, Iraq reportedly declared force majeure in relation to foreign operated oilfields following disruptions to oil exports
through the Strait of Hormuz.
The development raises questions extending beyond
contractual obligations and commercial arbitration to potential investment
treaty protections and investor state arbitration,
including proceedings under the ICSID Convention where its jurisdictional
requirements are satisfied.
Jordan's Opportunity
Beyond London, Paris and Singapore, the region
needs an international arbitration seat closer to the parties, their
investments and their markets.
Jordan is well placed to fill that role. Its
credentials extend beyond its relative stability in a turbulent neighbourhood.
Jordan is a party to the 1958 New York Convention, providing an internationally
recognised framework for the recognition and enforcement of foreign arbitral
awards, and to the 1965 ICSID Convention, which provides a specialised
framework for resolving qualifying investment disputes between foreign
investors and host states.
Jordan is also party to a network of bilateral
investment treaties, including agreements with the United States, Japan and
other investment partners, offering additional treaty-based
protections and dispute settlement mechanisms. These
commitments connect Jordan to the international legal architecture governing
cross border commerce and investment.
The opportunity is therefore to turn treaty
commitments into a practical regional advantage: an arbitration center offering
international standards, judicial support, institutional cooperation and
reliable enforcement.
The governing law and the arbitral seat are separate
choices; parties can retain English law as the governing law of their contract
while choosing Amman as the seat of arbitration.
Ultimately, what will attract
this business is not geography alone, but confidence in the legal framework, the
predictability of judicial support and the timely enforcement of arbitral
awards.
A contract cannot stop a war, but it decides who
pays for its consequences.
The Strait may close, but the need for clear
contracts and trusted arbitration will always remain open.
For Jordan, this is more than a legal
opportunity; it is a chance to turn its international treaty commitments,
stability and legal framework into a regional center for trusted dispute
resolution.
