Introduction
Recent geopolitical tensions in the Middle East have once again drawn attention to the resilience of commercial contracts. Disruptions to airspace, shipping routes, and regional logistics networks have prompted businesses to reconsider whether their contractual obligations remain capable of performance under current conditions.
In such circumstances, attention inevitably turns to force majeure provisions, which are designed to address events beyond the control of contracting parties. Yet the practical application of force majeure under UAE law is often more complex than many assume. Whether a party may rely on such provisions depends on a combination of contractual wording, the governing legal framework, and the factual relationship between the disruptive event and the party’s ability to perform.
This article examines how force majeure operates under UAE law and highlights key contractual considerations that businesses should review during periods of regional instability.
Force Majeure: A Clause Often Overlooked Until Crisis
In stable economic conditions, force majeure clauses often receive limited attention during contract negotiations. However, when external disruptions occur, these clauses quickly become central to the parties’ rights and obligations.
Most commercial agreements define force majeure as an event beyond the reasonable control of the parties that prevents or delays contractual performance. Common examples include armed conflict, government restrictions, civil unrest, natural disasters, or large-scale disruptions to transportation and trade.
The critical issue is not merely whether such events exist, but whether they directly prevent performance. Courts typically require a clear causal link between the event and the inability to perform contractual obligations.
The UAE Civil Law Framework
Under Federal Law No. 5 of 1985 on the Civil Transactions Law of the United Arab Emirates State, the legal consequences of force majeure are primarily addressed in Articles 273 and 287.
Article 273 provides that where a force majeure event renders the performance of an obligation impossible in a bilateral contract, the corresponding obligation is extinguished, and the contract may be automatically rescinded. Article 287 complements this framework by establishing that a party is not liable for damages where the harm arises from causes beyond its control, including force majeure, unforeseen circumstances, or the fault of another party.
This position will continue under the new Civil Transactions Law issued pursuant to Federal Decree-Law No. 25 of 2025, which is scheduled to enter into force on 1 June 2026. Article 236 of the new law similarly provides that where a force majeure event renders the performance of an obligation entirely impossible in a bilateral contract, the reciprocal obligations of the parties lapse and the contract is dissolved ipso jure, meaning that the contract is automatically terminated by operation of law. Secondly, where performance becomes partially impossible, either party may insist that the corresponding part of its obligation lapse or alternatively petition the court for rescission of the contract. Where the impossibility is temporary in the context of continuous or successive contracts, the affected party may request that the corresponding obligation be suspended, seek modification of the contract to reflect the changed circumstances, or petition the court for rescission if continuation of the contract is no longer viable.
Through these provisions, Article 236 preserves the core principle that force majeure extinguishes obligations where performance becomes impossible, while also providing a structured approach to situations involving partial or temporary impediments.
DIFC and ADGM: A Different Approach
The position differs in the UAE’s financial free zones.
A. In the DIFC, parties may rely either on contractual force majeure provisions or on the statutory framework contained in Article 82 of the DIFC Contract Law. The provision excuses non-performance where a party proves that its failure to perform was caused by an impediment beyond its control which it could not reasonably have foreseen at the time of concluding the contract or avoiding or overcome.
Where the impediment is temporary, the excuse applies only for the period during which the impediment affects performance. The affected party must also notify the counterparty of the impediment and its impact on performance within a reasonable time. Failure to provide such notice may expose the party to liability for losses resulting from the delay.
Importantly, the provision does not generally excuse mere obligations to pay, unless the contract expressly provides otherwise.
B. In the ADGM, which follows English common law principles, force majeure operates only where it is expressly provided for in the contract. In such cases, the clause is interpreted in accordance with ordinary principles of contractual construction, although English law has traditionally approached force majeure provisions restrictively. The party relying on the clause must therefore establish both that the event falls within the scope of the provision and that the clause applies to the factual circumstances in question. This makes it particularly important to review the precise wording of the clause, including any express carve-outs, procedural requirements, and notification obligations.
When Regional Conflict May Affect Contractual Performance
Recent developments in the region illustrate how geopolitical events may affect commercial obligations in practical ways. Restrictions on airspace, disruptions to shipping lanes, or heightened security measures may interfere with logistics, supply chains, or cross-border operations.
However, the existence of regional conflict does not automatically constitute force majeure. The party invoking the clause must demonstrate that the event directly prevented performance, rather than merely making performance more difficult or expensive.
Contractual Clauses That Deserve Immediate Attention
Periods of uncertainty often prompt businesses to revisit the force majeure provisions contained in their contracts. In doing so, it is important not only to confirm that such a clause exists, but also to assess how it is structured and how it operates in practice.
When reviewing a force majeure clause, several elements merit particular attention. First, the scope of the clause should be carefully examined to determine whether the events listed or described are sufficiently broad to capture disruptions that may arise from regional instability, such as restrictions on transportation routes, government-imposed measures, or security-related interruptions etc.
Secondly, parties should consider the procedural requirements associated with invoking the clause, including any notice obligations and the timeframe within which notice must be given once the event occurs or becomes known.
It is also important to evaluate the legal framework governing the contract, including the governing law and dispute resolution provisions, as these determine how force majeure claims will ultimately be interpreted by courts or arbitral tribunals.
Finally, contracts should be reviewed to ensure that dispute resolution mechanisms remain operative, particularly where older agreements may refer to arbitration institutions or procedural rules that have since been amended or restructured.
A careful review of these elements can significantly reduce uncertainty if contractual performance becomes affected by external events.
For practical advice on assessing contractual obligations and managing disruption-related risks, and for further guidance on force majeure provisions and contractual risk in UAE commercial agreements, please contact the author Merline Dsouza at merline@alsuwaidi.ae