PORTS ARE OPEN, LOGISTICS ARE AT A STANDSTILL: who will bear the risk of cancelled contracts
12 August, 2026
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Formally, Ukrainian sea ports are still open, but shipping logistics is actually being squeezed from both sides. From the sea, some shipowners reject vessel calls at the Ukrainian sea ports, seeing regular missile and drone strikes on ships, roadstead and port infrastructure. From the land, as reported by market players, hundreds of wagons with grain have already arrived at ports and terminals but still remain unloaded, accumulating costs and being at risk of a new strike.
The goods may be ready, the transport is paid for, the seller has done everything that depends thereon, while physical traffic of the cargo is still suspended. The contract does not automatically terminate. Delivery deadlines are going to expire, wagon lease and financing costs are accrued, while the risk of deterioration in quality of the goods increases. Penalties may arise for shortage, the buyer may have the right to reject the goods or to charge reimbursement. Some international buyers also incorporate in the contracts extremely broad war-risk clauses which allow them to cancel non-performed part of delivery due to war-related circumstances and to bear no liability by themselves.
Such gap between physical logistics and contractual reality has become one of the principal problems of Ukrainian grain exports. For one seller, the problem is that it cannot find a vessel for delivery on CIF terms. For another, the vessel was to be nominated by the buyer on FOB terms but has not arrived. Third seller has already delivered the goods by rail to the agreed terminal, but neither the buyer nor the terminal accepted it. The goods got stuck between the manufacturer, the railcar, the terminal and the vessel, while the contract remains valid.
Therefore, a key question today is no longer whether Ukrainian sea ports are open or not. The question is who will bear the costs and risks when, due to the war, a certain delivery in fact cannot be performed as agreed by the parties in the contract.
Open sea port is not just available delivery
In real life, the vessel does not call at the port or the terminal does not discharge wagons. In contractual reality, delivery deadline continues to run. Therefore, in a dispute, it is not enough to establish that the port was not officially closed.
Logistics availability has at least three levels:
- regulatory availability: whether navigation, vessel call and cargo operations are permitted;
- operational availability: whether a certain port, terminal, railway and shipping approaches could actually facilitate operation in the relevant period;
- actual market availability: whether there was tonnage ready to perform a certain voyage in the relevant period, whether the necessary insurance coverage was available, whether it was possible to form a crew and to organize transportation in fact.
A port can stay open at the first level and actually unavailable at the second or third one. However, mixed concepts allow the counterparty to say: “The port is open, therefore, delivery is possible”. But for a certain contract this is not enough: it is necessary to establish whether a certain party could actually carry out a certain operation within a certain delivery period.
Here the issue of logistics is over and the issue of loss distribution arises.
Why the vessel is not calling even when the port is open
For a shipowner, the decision to enter the Ukrainian sea port is not a courage but is based on insurance, crew and contract.
Insurance. The insurance market treats Ukrainian sea ports and approaches thereto as areas of increased military risk. Entry into such an area may require separate approval by the insurer and additional military premium, the amount whereof varies depending on the risk assessment, and sometimes the insurer may even reject coverage.
Crew. For vessels covered by relevant collective agreements, work in designated areas of military or increased risk may entitle seafarers to reject vessel call, to demand repatriation and to charge additional payments. A certain regime depends on the collective agreement and status of the area itself.
Charter Party. Standard military clauses in charter parties may allow the shipowner to reject voyage if it reasonably believes that danger both to the vessel and to the crew is real.
Last but not least: the shipowner’s rejection, even if it is completely lawful under the charter party, shall not release the seller from fulfillment of its obligations under the trade contract. A classic example: the seller under CIF terms is obliged to organize sea transportation, but the shipowner under the charter party has the right to reject vessel call at the dangerous port. Therefore, the seller can remain liable to the buyer, without having mirror protection in relations with the shipowner. The risks along the chain sale & purchase contract – charter party – insurance – terminal – railway are distributed differently, while in such gaps further disputes arise. One need to look not at a single contract, but at the entire chain.
When reference to the war risk is selective
One more scenario: the shipowner rejects voyage at the Ukrainian sea port, with reference to military threat, and a few days later the same vessel calls at the same port or at the port nearby, but under a different charter party and at a higher freight rate.
De jure this is not always a contradiction. The situation could have really changed, ports and terminals have different risk profiles, while another charter party may provide recovery of military insurance premiums and crew payments, while under the first contract the charterer rejected payment. Finally, military clauses in the two charter parties may have different formulations.
But the basic rule is simple: the shipowner’s right to reject voyage is based on its feasible assessment of the real threat, not on search for a more profitable cargo. Here the vessel’s behavior plays a vital role. Therefore, the charterer being rejected should immediately record the vessel traffic, namely: AIS data, vessel call history, dates, terminal, cargo on board. A more profitable next voyage to the same area in fact does not prove abuse but serves as grounds to check what actually dictated such rejection.
Mirror statement for the seller: the same test works against the buyer who cancelled delivery due to war risks but accepted another cargo from the same terminal the same week.
Risk arises not only at sea
The chain can break at any point, not just at sea. The most difficult part is land logistics.
On DAP terms, much depends on whether the goods have reached the agreed destination place. If the goods are not delivered thereto, the risk shall be borne by the seller. If the goods have already arrived at the designated place and are placed at the buyer’s disposal ready for discharge, delivery on this basis can be treated as having taken place even if the buyer or the terminal in fact do not discharge the transport. Therefore, rejection to accept the cargo can already become the buyer’s problem. Difference in a few kilometers or a certain place is named in the contract is a keystone who will bear idle stay costs.
On CPT terms, the result is the opposite. By default, the seller shall be deemed as having delivered the goods as soon as they are handed over to the first carrier, while the risk en route is already borne by the buyer, although the seller is still paying transportation cost. But the parties may directly change this construction by the contract itself, e.g. by linking the seller’s certain obligation to acceptance of the goods by the terminal. In such case, a keystone is not name of the basis but text of a certain contract.
In similar situations, the seller can simultaneously bear the costs of wagons, finance the goods, risk their quality and receive a claim for late delivery. Therefore, the answer to the question “who is to blame?” almost always begins not with the news about shelling, but with text of the contract.
When the contract becomes the buyer’s option
The market faces special war risk whereunder the international buyer reserves the right to cancel non-performed part of the delivery without bearing any liability if war-related circumstances, in its own opinion, prevent the vessel nomination, acceptance of the goods, the operation of the terminal, safe navigation or performance of the contract in another way.
Economic effect can be very serious. In fact, the contract turns into an option for the buyer: if delivery is profitable for the latter, the contract is subject to performance; however, if the situation changes, a broad clause can make it possible to withdraw from non-performed part of the contract without reimbursement to the seller. There are particularly hazardous formulations where not objective impossibility of performance, but the buyer’s own assessment of impact of the relevant event is enough.
Therefore, such provisions should be assessed before signing the contract. If the contract has already been signed, it is necessary to carefully check not only grounds for cancellation, but also the procedure, namely: who should send notice, by what deadline, in which form, which circumstances should be confirmed and from which moment cancellation is valid. Even before response, one should think it over, at what price the counterparty will calculate losses: financial result is often based on date and price of the default, not on the fact of force majeure.
The fact of shelling itself does not mean that the counterparty automatically received the right to terminate performance. The right to cancel does not arise only due to the military risk in general: the party should prove that certain circumstances fall within wording of the clause, caused the effect stipulated thereby and that the fixed procedure was met. Therefore, notice of cancellation should be perceived not as a verdict, but as a position that may and might be verified.
Why business asks the state to fix force majeure
Today some traders are asking the state to officially record impossibility or significant limitation of the sea port and sea corridor operation. The logic is clear: while the port is officially open, the buyer can point out a certain vessel call and say: “Other vessels are calling, therefore, voyage is possible”. As the result, the seller has to independently collect evidence showing that the situation was different for its certain delivery, namely: shipowners’ rejection, correspondence with brokers, insurers’ position, terminal’s information, lack of available tonnage. An official document would significantly strengthen such evidentiary base.
But a complete administrative closure of sea port or transport corridor is too crude instrument. It will be read not only by arbitrators and lawyers. It will result in response by shipowners, banks, war risk insurers, P&I clubs, reinsurers, charterers and international compliance. Formal closures can stop even those voyages that the market is still willing to operate, activate cancellation clauses in contracts where they are worded quite broadly, and make it much more difficult to resume shipping once the situation improves.
There is a paradox: if the state merely reports on threat, it helps to prove circumstances but does not create an automatic impossibility of performance. If the state directly prohibits operation, the party’s legal position may become stronger, but the trade is already stopped on administrative level. Therefore, the answer should be more precise than just “the port is open” or “the port is closed”.
Force majeure under Ukrainian law: what is it indeed
War, missile attack, damage to infrastructure or disruption of transport – all this can be treated as force majeure. But the war itself does not automatically release all market players from all contractual obligations. It is necessary to show causal relationship between a certain event and a certain non-performance. It is important for the exporter to prove not only general threat in the Black Sea, but why it prevented performance of a certain contract within the agreed period.
It is important to distinguish between two different aspects: exemption from liability and termination of the obligation itself. Force majeure can protect a party from liability for violation, but the contract does not always terminate due to this fact. Legal effects shall be determined by the contract and applicable law: validity term may be extended, performance may be suspended, and after a certain period one or both parties may be entitled to terminate the contract. When performance has become objectively impossible, the issue of terminating the obligation itself arises separately. One more vital distinction is the following: force majeure in the sense of law where objective impossibility is required, and a contractual clause which can provide protection even when performance is significantly hindered.
That is why Certificate of the Chamber of Commerce and Industry is not a universal indulgence. However, in currency regulation, proper confirmation of force majeure can have a very specific practical consequence: prescribed payment terms and accrual of the penalties imposed due to violation thereof shall be suspended for the appropriate period. But in a dispute with a foreign counterparty involved, prompt notification of the obstacle in practice often weighs more than the date of receiving certificate.
In any case, a sequence of evidence is required:
- what exactly the party was supposed to do;
- what delivery place, route and period were agreed on;
- which certain event prevented performance;
- when it occurred and how long it lasted;
- whether there were any rejections by shipowner, terminal, broker or insurer;
- whether there was a real alternative;
- when the counterparty was duly notified;
- what measures the party took in order to mitigate losses.
An official state document can become an important part of this construction ,but it will not replace it.
GAFTA: force majeure certificate is not crucial
The same principle works in standard grain contracts. A series of GAFTA proformas contains provisions on impediments to performance that do not provide automatic termination of the contract, but a sequence of steps: impediment, prompt notice, suspension of performance, waiting for a certain period and finally cancellation of non-performed part. A certain mechanism and consequences should be verified against the form and wording incorporated by the parties into the contract.
A separate trap here is the notice periods. They can be strict, while missed or improperly drawn-up notice, depending on the certain GAFTA proforma, can deprive a party from protection set forth therein, even if such impediment occurred in fact. One more vital aspect is that the CCI certificate itself does not trigger such mechanism. It is triggered by the event prescribed by the contract and prompt notice, while the certificate is only one piece of evidence.
Therefore, the question “Will the CCI issue force majeure certificate?” is important, but it is not the first. First of all, it is necessary to determine what the certain contract allows to do with such event. Sometimes a proper reference to the obstacle will protect the seller from losses. Sometimes the sent notice will simultaneously trigger a mechanism that will allow cancelling non-performed part of the contract after a certain time, when the market price has already changed. Winning the case here does not always mean preservation of economic benefits.
English law: first read the contract
In international grain trade and sea transportations in the Black Sea region, English law often applies and disputes are referred to arbitration. Here force majeure operates primarily as described by the parties themselves. Therefore, the first question is not “Was there a war?” but “What exactly is set out in the contract?”
Does the clause cover hostilities, missile attacks, port closures, government restrictions, blockades, navigational obstacles, terminal closures or lack of tonnage? Does it require that performance could become impossible, or is a substantial impediment or delay sufficient? Who shall give notice, when, and what happens after it: extension, suspension or cancellation?
The party referring to such clause should prove causal relationship and follow the procedure stipulated by the contract. Therefore, for the Ukrainian exporter, correspondence with brokers, rejections from shipowners and insurers, terminal notifications and analysis of alternative routes are not supporting materials, but potential evidence in further dispute.
Frustration is still an exception
Separately, in English law there is a doctrine of frustration: it can automatically terminate the parties’ further obligations if an unforeseen event made performance impossible, illegal or radically different from what was agreed. But it is rarely used. A sharp increase in freight costs, difficulty or disadvantage of performance is usually not enough. If the contract was entered into during systematic attacks on ports, the counterparty will say that the parties were aware of war risk and prescribed it by in the contract. In such case not one more attack is a keystone, but a change in circumstances that really affected possibility of making a certain delivery.
A single war but a different risk distribution
The same missile attack can have different legal effects for different contracts. Basic risk distribution is the following.
| Basis | Who organizes vessel or carriage | Delivery moment by default | In case of logistics stoppage |
| FOB | Vessel nominated by the buyer | On board at the port of shipment | No vessel: primarily the buyer’s problem. But if the port is not operating, risk is also borne by the seller who has to load the goods |
| CFR / CIF | Vessel chartered by the seller | On board at the port of shipment | Available tonnage is lost: primarily the seller’s risk |
| CPT | Carriage organized by the seller | Transfer to the first carrier, followed by risk borne by the buyer | Risk of traffic is borne by the buyer. But the contract may attach the seller’s certain obligation to acceptance by the terminal; here text is crucial |
| DAP | Seller | At the buyer’s disposal at the destination point, ready for discharge | Goods have not arrived: the seller’s risk. Goods have arrived and are handed over to the buyer: delivery has taken place even if the terminal stopped discharge |
It is risk distribution by default. A certain contract can change any such clause, while in practice the contract is crucial. Therefore, there is no universal answer “it is the seller’s force majeure” or “it is the buyer’s problem”. In particular, it concerns custom designs, when standard delivery terms are mixed with terms like “payment after passing the Bosphorus” by the vessel that is not yet chartered under the contract not yet entered into. Where the Ukrainian supplier is so far from real influence on the situation that its role after performance of the contract terms, one should only wait for a bunch of other companies to perform their terms and quickly enough for the cargo to survive. And if not, the risks will definitely not be distributed equally between all contracts. That is what the contract does.
The ultimate buyer definitely does not want to bear all the risks. The buyer could either resell the grain, charter the vessel, fix the price or take on obligations to the processor. Its own contract further down the chain may not contain the same protection as the Ukrainian seller. That is why each party will try to pass the loss on.
The problem arises when the actual logistics stoppage does not receive proper legal fixation. In such case, an objective impossibility or a significant obstacle to performance is much easier to present as an ordinary commercial default, with all the risk to be borne by the Ukrainian party.
What should the state do
Business does not need a political declaration or a universal certificate that there is a war in Ukraine. Only legally valid facts are required. The state-authorized body should confirm the following:
- which port, area, route or operation type the restriction applied to;
- which official or operational restrictions were in force and what their nature was;
- validity term of the restriction;
- when the restriction was changed or cancelled.
However, statement as to whether such circumstances made it impossible to perform a certain contract, while the issue whether they constitute force majeure for a certain party should remain a matter of contract, evidence and applicable law, and should be settled by court or arbitration.
Some of such recordings already exist in the form of navigational warnings and notices to seafarers. The task is not to build a system from scratch, but to turn such recording into a systematized archive of facts suitable for further disputes.
Here it is important not to mix two different streams of information. Data required for navigation safety, i.e. warnings about dangerous areas, navigation restrictions and changes in shipping regimes, should be disseminated promptly. However, information on the nature of damage, actual throughput capacity of ports, repair deadlines and other data that allow assessing effectiveness of the strike may be published with a delay or even may not be published at all.
Therefore, a three-level system seems appropriate.
Closed state level. Competent military and civilian authorities shall record the exact circumstances, damage and operational restrictions for the purpose of potential further applying in court or arbitration.
Restricted professional level. Shipowners, insurers, banks and participants in a particular operation shall receive sufficient information about its availability without revealing sensitive military details.
Public level. The state shall report on legally significant minimum without estimates: which area or type of operation was restricted, when it commenced and when it was terminated. Public level should contain neutral factual information, not a statement of impossibility: the official word impossible will immediately become an argument for foreign buyers with broad cancellation clauses.
What should the exporter do right now
Waiting for the state is risky: the terms in contracts are going to expire. The company should immediately:
- raise the contract and check not only the force majeure clause, but also terms of cancellation, impediments, extension of the term, war risks and termination of the contract, as well as which law shall apply;
- determine who is responsible for the vessel, wagons, terminal and acceptance of the goods under the contract;
- in case of sea transportation, check how well protection under the trade contract and under the charter party is coordinated: the shipowner’s rejection should not leave the seller alone with the buyer;
- check terms and form of all notices, and if the payments are made via letter of credit, take into account that its terms are not automatically extended due to force majeure;
- record everything in writing from the first day: rejections of shipowners, brokers, terminals and insurers, arrival of wagons, idle stay, condition and quality of the goods, costs and losses;
- notify the counterparty in due time;
- neither recognize one’s own default nor agree on cancellation or new conditions without checking their legal effects.
In particular, one should not wait until the problem turns into a formal claim. When dozens of wagons are already at the terminal or the delivery period expires just in a few days, silence also creates a legal position, but often not in favor of the seller.
The state shall provide facts, the contract will fix legal effects
The current crisis is not a repeat of 2022. Then the problem was obvious: a significant part of shipping logistics actually stopped. Today the situation is much more complicated. Ports are formally open, some vessels are calling, but other owners reject voyages, terminals restrict operations, while laden wagons stand on the approaches to the ports. For a contract, a few weeks of such uncertainty can be longer than the entire delivery period.
Therefore, for business it is not enough to answer the question: whether the port is open or closed. It is necessary to find out what actually happened with a certain delivery, who controlled the relevant part of logistics under the contract, what actions the party could have taken and what it did to fulfill it.
The state cannot guarantee the Ukrainian exporter’s victory in a further dispute. But it can provide legally valid facts in due time. The question who will ultimately pay for the goods stuck between the railcar, the terminal and the vessel will be resolved by the contract, evidence and applicable law.
The material contains general professional analysis and does not replace legal assessment of a certain contract.
