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As regional instability continues to impact commercial activity across the Middle East, businesses engaged in sale and purchase (S&P) transactions governed by UAE law are increasingly examining whether recent developments may trigger force majeure provisions. The sectors most affected, including energy, oil and gas, and logistics depend heavily on navigable shipping channels, uninterrupted airspace, and stable regulatory environments. When these conditions deteriorate, the question arises whether contractual performance has become impossible or merely more challenging. Across the UAE’s legal frameworks, force majeure remains a narrowly interpreted mechanism that operates within defined statutory and contractual boundaries, and its application requires a careful assessment of factual circumstances, legal thresholds, and risk-allocation structures embedded in the relevant S&P agreements.
UAE law does not treat force majeure as a flexible escape route. Whether one looks to the UAE Civil Code, the DIFC Contract Law, or the ADGM system, the central theme is consistent: force majeure. As disruptions around strategic waterways and regional airspace continue to unfold, these baseline principles have become essential for determining whether performance obligations under S&P contracts may legitimately be excused.
Legal Framework Governing Force Majeure in UAE S&P Agreements
Article 273 of UAE Civil Transactions Law cease. Courts distinguish between absolute prevention and situations where performance remains achievable, even if significantly more difficult. This narrow threshold means many disruptions in energy or logistics markets will not meet the statutory test unless the event prevents performance despite reasonable alternatives.
Under the DIFC Contract Law, Article 82 introduces a structured regime that focuses on whether the impediment was beyond the party’s control and could not reasonably have been foreseen or avoided, combined with a strict notice requirement. The ADGM, applying English common-law principles, requires express contractual wording for force majeure and otherwise relies on the limited doctrine of frustration. Across all three frameworks, courts emphasize strict interpretation and clear causation.
It is also important to distinguish force majeure from situations of economic hardship or commercial difficulty. Under UAE law, the mere fact that performance has become more expensive, commercially unattractive, or operationally burdensome does not in itself constitute force majeure. Courts generally require clear evidence that the event in question directly prevented the contractual obligation from being performed, rather than merely altering the economic balance of the agreement. As a result, disruptions that increase costs, delay logistics, or affect financing arrangements will rarely satisfy the high threshold required to excuse performance under force majeure provisions.
Similarly, a party cannot rely on force majeure where the alleged impossibility results from its own actions or commercial decisions. UAE legal commentary and judicial reasoning generally reject force majeure claims where the inability to perform arises from internal factors such as withdrawal of financing, changes in commercial strategy, or voluntary suspension of operations. In such circumstances, the event does not constitute an external impediment preventing performance but rather reflects a commercial risk assumed by the contracting party.
Impact of Regional Instability on Contractual Performance
Escalating regional tensions have caused notable disruptions across energy and logistics operations. Vessel movements through the Strait of Hormuz have slowed significantly, with many tankers delayed or rerouted, directly impacting loading schedules and delivery programs. Qatar has reportedly suspended production at a major LNG facility following drone-related incidents, a development that may have implications for downstream supply obligations under certain S&P contracts.
Kuwait has also issued heightened maritime-security alerts, signaling the increased vulnerability of its export routes. While Kuwait has not halted operations, carriers face elevated insurance exposure and operational caution. Although these developments complicate S&P performance, UAE law still requires proof of objective impossibility of contractual performance. In most cases, performance remains legally feasible through alternative routing or revised timelines, even where operations are strained.
Contract Drafting, Notice Requirements, and Mitigation
Because force majeure is interpreted narrowly, the effectiveness of any claim depends heavily on contractual drafting. Many S&P agreements in the affected sectors specify events such as armed conflict, government intervention, or closure of sea lanes. When such events arise, compliance with notice requirements becomes central. UAE commentary stresses that untimely or incomplete notice can invalidate an otherwise legitimate claim.
Mitigation is equally important. Parties invoking force majeure must demonstrate genuine attempts to pursue alternative routes, operational adjustments, or regulatory engagement. Documentary evidence, including port circulars, shipping advisories, and insurer statements may play a decisive role in assessing whether the contractual threshold for force majeure has been met. If reasonable alternatives were available but not pursued, force majeure relief is unlikely.
Sector-Specific Considerations for S&P Agreements
In the energy sector, S&P contracts often contain detailed provisions addressing risks linked to export-route closures or security-related disruptions. These clauses are particularly relevant when loading ports become inaccessible, or logistics chains are materially interrupted. However, enforcement still turns on strict adherence to the contract’s wording and the governing legal standard.
Logistics and transport-related S&P agreements face similar pressures. Airspace restrictions, port delays, and rerouting may significantly hinder operations, yet performance typically remains possible through alternative channels. Courts examining such claims expect clear evidence that alternatives were exhausted before concluding that performance was impossible.
Conclusion
The current regional climate has placed substantial pressure on energy, oil and gas, and logistics businesses operating through the UAE. Yet force majeure remains a strictly applied doctrine. Under mainland UAE law, the bar remains objective impossibility, and the DIFC and ADGM frameworks apply similarly disciplined standards. Whether present disruptions constitute force majeure depends on the specific contractual language, the factual nature of the impediment, and the feasibility of alternative performance. In practice, parties invoking force majeure must demonstrate a clear causal link between the external event and the inability to perform the contractual obligation. Parties should therefore review their S&P agreements carefully, comply with notice requirements, and maintain detailed records of operational impacts as conditions continue to evolve.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
