Law firms field force majeure queries as war sets off panic

As the conflict in West Asia has nearly frozen all trade movement through the Strait of Hormuz, Indian law firms have seen a surge in queries from companies seeking clarity on whether they can invoke a rare clause to mitigate risk—force majeure.It is a contractual provision that allows a party to suspend or avoid its obligations if an unforeseen event outside its control makes performance impossible. These may include war, government restrictions or major disruptions to shipping routes, if specifically covered in the contract.“The energy sector is reaching out the most, especially companies importing LNG (liquefied natural gas) and crude who now face stranded cargoes and unreliable shipping schedules,” said Charanya Lakshmikumaran, executive partner at Laxmikumaran & Sridharan (LKS).“The shipping and logistics sector is next, dealing with mounting delays, higher war-risk premiums and rerouted vessels,” she said.

“Indian manufacturers, EPC (engineering, procurement and construction) contractors and large import-dependent businesses have also begun seeking advice due to rising supply-chain uncertainty.”The queries mirror global panic as the Brent has spiked above $100 a barrel for the first time since 2022 after the US and Israel’s joint strikes on Iran evoked retaliatory missile and drone attacks by Tehran across the Persian Gulf region. That has almost disrupted ship movement through the Strait of Hormuz, a chokepoint between Iran and Oman that carries roughly one-fifth of the world’s oil consumption and large volumes of LNG.