Introduction
Amid heightened geopolitical uncertainty, many businesses in the region are reviewing whether force majeure provisions may be triggered by regional conflict or related disruptions and a number in the region have already declared as much. This alert provides an overview of how force majeure operates across the UAE’s legal frameworks and considers the circumstances in which regional conflict may excuse non-performance of contractual obligations.
Force Majeure Clauses
Commercial contracts frequently incorporate express force majeure clauses that define triggering events as acts beyond the reasonable control of the affected party, Such clauses typically enumerate specific categories of qualifying events, including armed conflict, civil unrest, wars, riots, natural disasters, pandemics, industrial action, and government intervention. Whether a particular event activates a force majeure clause will depend on on the precise contractual language and the causal connection between the event and the party’s inability to perform.
Force Majeure Across UAE Legal Frameworks
Under UAE Civil Law, Article 273 of the Civil Code provides that where force majeure renders contractual performance impossible, the corresponding obligation is extinguished and the contract is automatically cancelled. In cases of partial or temporary impossibility, only the affected obligation is extinguished and the counterparty retains the right to terminate the contract upon notice. An event qualifies as force majeure only if it was (i) unforeseeable at the time of contract formation and (ii) unavoidable through the exercise of appropriate measures.
In the ADGM, contracts are governed by English common law, meaning that force majeure operates only where expressly incorporated into the contract. The ADGM Courts interpret such clauses strictly, requiring the affected party to demonstrate both that the event falls squarely within the contractual definition and that reasonable steps were taken to mitigate its effects.
In the DIFC, parties may invoke a contractual force majeure clauses or, alternatively, rely upon the statutory framework set out in Article 82 of the DIFC Contract Law. Article 82 excuses non-performance where it is caused by an impediment beyond the party’s control that was was neither reasonably foreseeable at the time of contracting nor reasonably avoidable or surmountable. To preserve its rights under this provision, the affected party must provide timely notice to the counterparty; failure to do so may result in liability for losses attributable to the delay. Notably, payment obligations are generally not excused under Article 82 unless the contract expressly provides otherwise.
Does Regional Conflict Trigger Force Majeure?
Armed conflict is a paradigmatic example of force majeure, yet the mere existence of hostilities does not automatically excuse contractual performance. The affected party must demonstrate that the conflict satisfies the applicable legal or contractual requirements and that there is a direct causal link between the conflict and the party’s inability to perform. In 2024, the Dubai Court of Cassation upheld a force majeure defence in a shipping dispute arising from the Russia-Ukraine war, finding that the conflict was unforeseeable, unavoidable, and therefore constituted a force majeure event. On this basis, the defendant was absolved of fault and its non-performance was held to be legally excused.
Notably, the closure of (i) the Strait of Hormuz, and (ii) the airspace in multiple jurisdictions in the region, presents a significant threat to global supply chains and critical disruptions to certain contracts, likely triggering complex disputes. Legal uncertainty remains as to whether such a blockade would qualify as a force majeure event or fall under the doctrine of “unforeseen circumstances/hardship”. Ultimately, the legal implications would only be determined by the nature of the contract, the duration of the blockade, and the impact that it had on the performance of contractual obligations. We are closely monitoring regional developments and will soon publish a comprehensive analysis detailing the specific legal implications in the region.
How Al Tamimi can help
Should you wish to discuss the potential implications of current regional developments for your contractual arrangements, please do not hesitate to contact the key contacts.
Key Contacts
Rita Jaballah, Partner, Head of International Litigation, r.jaballah@tamimi.com
Naief Yahia, Partner, Head of Dispute Resolution, n.yahia@tamimi.com
Mosaab Aly, Partner, m.aly@tamimi.com
Jonathan Brooks, Of Counsel, j.brooks@tamimi.com