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When does sanctions risk justify refusing to perform a contract? Isuru Devendra reviews a Court of Appeal ruling that will be welcomed by shipowners navigating uncertain circumstances
- A Court of Appeal ruling has clarified that a party relying on a sanctions clause need only have made a reasonable determination of sanctions risk, rather than a likely sanctions breach.
- The decision will be welcomed by shipowners and commercial parties operating in fast-moving sectors where information about sanctioned persons and corporate control may be incomplete or uncertain.
The Court of Appeal’s recent decision in Tonzip Maritime (Singapore) PTE Ltd v 2 Rivers PTE Ltd [2026] EWCA Civ 641 overturned the Commercial Court’s first-instance decision concerning whether a shipowner was entitled to refuse to load a cargo of crude oil because it had a reasonable apprehension that doing so would risk violating sanctions.
Lord Justice Foxton (with whom Lord Justice Coulson and Lord Justice Zacaroli agreed) allowed an appeal brought by the owners of the Catalan Sea (‘the vessel’) against voyage charterers on the basis that
