Shipping 2026

UK Law and Practice Contributed by: Quentin Bargate and Elliot Bishop, Bargate Murray

English proceedings (or to set aside service out) and seeking an anti-suit injunction to restrain the foreign proceedings (where the English court has jurisdiction and it is appropriate to grant such relief). A party may also seek damages for breach of an arbitration agreement in appropriate circumstances, and will typically pursue costs on an indemnity basis where the breach is clear and the court considers it just to do so. Contractual rights to security or to termi - nate may also be engaged depending on the underly - ing contract. 8. Ship-Owners’ Income Tax Relief 8.1 Exemptions or Tax Reliefs on the Income of Ship-Owners’ Companies The UK operates an elective tonnage tax regime for qualifying shipping companies, which (broadly) taxes certain shipping profits by reference to the net ton - nage of operated ships rather than actual profits, sub - ject to detailed eligibility conditions and compliance requirements. In addition, the UK capital allowances regime may provide relief for qualifying expenditure (subject to the specific facts and any ring-fencing rules), and the wider UK corporate tax framework (including group relief and financing deductibility rules) will apply to ship-owning structures depending on how they are organised and managed. 9. Implications of Non-Performance, IMO 2020, Trade Sanctions and International Conflict 9.1 Force Majeure and Frustration Under English law, “force majeure” is not a free-stand - ing doctrine: it applies only if the contract contains a force majeure clause and the clause is construed as covering the event and the relevant non-performance. The clause will typically require that performance is prevented or hindered beyond the party’s reasonable control, and may impose notice and mitigation obli - gations.

In the absence of a force majeure clause, relief may arise only through the doctrine of frustration, which is applied narrowly. Frustration requires a supervening event which, without fault of either party, renders per - formance impossible or transforms the obligation into something radically different from that undertaken. Delays, increased cost, or a change in market condi - tions are rarely sufficient; many shipping disruptions are dealt with contractually through war risk, safe port, deviation and laytime/demurrage provisions rather than frustration. 9.2 Enforcement of the IMO 2020 Rule Limiting the Sulphur Content of Fuel Oil The UK enforces the IMO 2020 sulphur limits through its implementation of MARPOL Annex VI, principally via the Merchant Shipping (Prevention of Air Pollu - tion from Ships) Regulations 2008 (as amended) and associated enforcement powers. The global sulphur limit for fuel oil used on board ships outside designated Emission Control Areas (ECAs) is 0.50% m/m. Within the North Sea and English Chan - nel Sulphur ECA, the stricter 0.10% limit applies. Enforcement is primarily undertaken by the MCA through inspections (including under port state con - trol), detentions and, where appropriate, prosecution. Publicly reported enforcement tends to take the form of deficiency action and detention, with criminal pro - ceedings being less common and fact-specific. 9.3 Trade Sanctions The UK has an autonomous sanctions framework implemented through the Sanctions and Anti-Money Laundering Act 2018 and country-specific regulations (including, for Russia, the Russia (Sanctions) (EU Exit) Regulations 2019). Enforcement is carried out by a range of authorities, including the Office of Financial Sanctions Implementation (OFSI), the Office of Trade Sanctions Implementation (OTSI), Her Majesty’s Rev - enue and Customs (HMRC) and the National Crime Agency (NCA), with licensing and exemptions avail - able in defined circumstances. The war in Ukraine has led to extensive UK sanctions affecting shipping and trade, including asset freezes, trade restrictions and targeted measures relating to Russian oil, maritime services and the oil price cap.

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