Navigating Contractual Uncertainty in a Time of Geopolitical Instability
The recent developments in the Middle East have heightened geopolitical tensions and introduced new risks for businesses operating in or connected to Kuwait. Reports of Iranian air strikes and attacks occurring within Kuwaiti territory have contributed to a climate of uncertainty across several sectors. Further, On March 8th, 2026, the Kuwait Petroleum Corporation declared force majeure cutting of crude oil production and supply. These developments have prompted several queries from our clients regarding their contractual obligations and those of their counterparties. Clients seek our assistance to evaluate the potential implications of these developments on their contractual commitments and consider how the principles of force majeure under Kuwaiti law may apply.
Force Majeure and Exceptional Circumstances: What You Need to Know
When unforeseen external events disrupt the ability to perform contractual obligations, two key legal concepts under Kuwaiti law may come into play: force majeure and exceptional circumstances.
Force majeure applies where contractual performance becomes genuinely impossible as a result of unforeseeable and unavoidable external events that are beyond a party’s control. Importantly, the mere occurrence of disruptive events, such as armed conflict or economic disruption, does not automatically trigger force majeure relief. The key consideration is whether those events have made performance objectively impossible, rather than simply more difficult or more costly.
Exceptional circumstances address a different situation, where performance remains technically possible but has become excessively burdensome due to unforeseen events. Instead of terminating the contract, this doctrine allows the court to adjust the contractual obligations in order to restore balance between the parties. This may include reducing the scope of performance or adjusting pricing terms.
Under Kuwaiti law, this protection is mandatory. As a result, contractual provisions that attempt to exclude or limit the application of exceptional circumstances may not be enforceable.
Key Considerations for Your Contracts
Many commercial contracts contain force majeure clauses, but these provisions may not operate as parties expect during times of crisis. Contractual language must align with Kuwaiti legal requirements, and merely listing potential disruptive events in a contract does not guarantee that their occurrence will provide automatic relief.
How We Can Help
In light of the current situation and the interaction between statutory rules and bespoke contractual wording, proactive legal assessment is essential. Our team is well-positioned to assist you in navigating these complex issues, including:
Force majeure / hardship risk review
- Reviewing contracts governed by Kuwaiti law, with particular focus on force majeure and exceptional circumstances provisions.
- Mapping contractual obligations against the factual impact of current events (e.g. access restrictions, supply chain disruption, security measures) to determine whether a force majeure or hardship position is supportable.
- Analysing the operation of any contractual long‑stop mechanisms (such as force majeure termination clauses) and the potential interplay with the statutory provisions.
Strategic advice and recommended actions
- Advising on notification requirements, timing and content of force majeure or hardship notices under the relevant contracts.
- Assessing the likelihood that Kuwaiti courts would characterise specific impediments as permanent, temporary, or partial impossibility versus exceptional circumstances.
- Developing strategies for negotiation with counterparties (e.g. extensions, scope adjustments, price revisions) in line with Kuwaiti law and contractual frameworks.
- Evaluating and documenting the financial and operational impact of the events to support any future judicial or arbitral proceedings.
This article is for general information purposes only and does not constitute legal advice. We encourage you to reach out to our team at your earliest convenience to discuss how these developments may impact your business and to schedule a review of your contractual arrangements.
Key Contact
Khaled Youssef, Senior Associate, k.youssef@tamimi.com