Armed actions as an insured risk under FIDIC contracts: A reflection on houthi operations in the red sea

In this paper, the authors highlight the challenges inherent in legally distinguishing between the concepts of “risk of hostilities” and “risk of terrorism” in situations where the use of armed force leads to the rerouting of equipment transportation under a contract based on the FIDIC General Conditions (the “Yellow Book”, 1999 edition).2 In this context, the paper analyzes the legal implications of altering the route of goods transportation within a construction project to be carried out in Serbia, as a consequence of maritime attacks conducted between 2023 and 2025 in the Red Sea area by the Yemeni Houthis, namely their military-political wing, the “Ansar Allah” movement. Taking as its factual framework a scenario in which the transport of equipment must be rerouted due to the actions of “Ansar Allah” and the consequent cancellation of a cargo insurance policy, the authors examine the potential practical consequences of the legal characterization of such conduct. In this regard, the paper addresses the interrelationship between the termination of insurance coverage and the contractual consequences arising under the FIDIC Yellow Book (1999).