Force Majeure in the UAE: What Businesses and Residents Need to Know Now

The Legal Storm Nobody Planned For

Since late February 2026, the Gulf has been living through its most serious geopolitical shock in a generation. Coordinated US–Israeli strikes on Iran on 28 February, and Iran's retaliatory missile and drone attacks on Gulf states including the UAE, have upended business as usual across the region. The Strait of Hormuz - the world's single most critical energy corridor - effectively halted commercial shipping within days. Major carriers including Maersk, Hapag-Lloyd, and CMA CGM suspended regional operations. Dubai's Jebel Ali, one of the world's busiest ports, temporarily paused bookings. Airspace across eight countries closed simultaneously.

For lawyers and their clients, the legal question quickly became: who bears the risk when contracts simply cannot be performed?

The answer under UAE law is nuanced, and knowing the difference between its two main legal doctrines - force majeure and hardship - could determine whether a client walks away from obligations freely or faces liability. This article walks you through the framework, applies it sector by sector, and tells you what practical steps to take right now.

1. The UAE Legal Framework: Two Doctrines, Very Different Outcomes

UAE law does not define force majeure in a single list of qualifying events. Instead, it establishes conditions a party must satisfy. Understanding these conditions is critical before invoking either doctrine.

Article 273  -  Force Majeure (True Impossibility)

Under Article 273 of the UAE Civil Code (Federal Law No. 5 of 1985, now replaced by Federal Decree-Law No. 25 of 2025 which enters into force 1 June 2026), force majeure applies when an event:

• Was unforeseeable at the time the contract was signed
• Was unavoidable, even after reasonable mitigation efforts
• Renders performance of the obligation absolutely impossible -  not merely more difficult or expensive

Where these three conditions are met, the contract is automatically terminated and obligations on both sides are extinguished. The burden of proof lies firmly with the party claiming force majeure. UAE courts take a strict view and will require clear, documented evidence of a direct causal link between the event and the impossibility of performance.

Important. A contract becoming unprofitable does not qualify as force majeure. Neither does an increase in costs or market disruption alone. The event must make performance objectively impossible.

Article 249 — Hardship (Excessive Onerousness)

Where performance remains technically possible but has become so burdensome as to threaten a party with grave loss, Article 249 gives the courts discretion to adjust the contract's obligations to restore a fair balance between the parties. Critically, this does not terminate the contract — it modifies it.

The event triggering hardship must be exceptional, unforeseeable, and of a general public nature rather than personal to the party seeking relief. Courts will weigh the interests of both sides and may reduce obligations but will not allow a party to simply walk away.

The new Civil Transactions Law (Federal Decree-Law No. 25 of 2025, effective 1 June 2026) preserves this framework under Articles 236 and 249, confirming that UAE law maintains the same distinction going forward. Parties should note that the transition to the new law may affect the interpretation of contracts signed under the old law, making legal advice during this transition period especially valuable.

Quick Reference: Article 273 vs. Article 249

	Article 273 — Force Majeure	Article 249 — Hardship
Threshold	Absolute impossibility	Excessive onerousness / grave loss
Contract outcome	Terminated automatically	Adjusted by court / arbitrator
Current applicability	Port closures, airspace bans preventing delivery entirely	Massive cost increases, diverted logistics
Mitigation required?	Yes — must show unavoidability	Yes — courts weigh both parties' interests
Burden of proof	High	Moderate (judicial discretion applies)

2. Does the Current Conflict Qualify? Key Legal Considerations

Whether the Israel–Iran conflict and its regional ripple effects constitute force majeure under UAE law will depend on when contracts were signed and what obligations they require. The key questions courts and arbitrators will ask:

• Was the conflict foreseeable when the contract was formed? Contracts signed before the escalation in late February 2026 have a stronger argument. Those signed after may struggle, as courts treat already-materialised risks as foreseeable.
• Did the event make performance objectively impossible, or merely more difficult? A port closure physically preventing delivery of goods is stronger than a cost increase making delivery unprofitable.
• Did the affected party take reasonable steps to mitigate? UAE courts increasingly expect documented attempts to find alternatives, as illustrated by Cassation No. 624/2025, which rejected claims where mitigation was not demonstrated.
• Was prompt written notice given? The UAE Civil Code's good faith obligation (Article 246) requires affected parties to notify counterparties promptly. Delayed notification can defeat an otherwise valid claim.

2025 Precedent. Cassation No. 624/2025 confirmed that UAE courts will reject force majeure claims where the affected party failed to demonstrate mitigation efforts and timely notification. Document everything.

3. Sector-by-Sector Legal Guide

Real Estate & Lease Agreements

The closure of logistics networks and the disruption to Jebel Ali port have created real impediments for property-related obligations in the UAE. Under Ejari-registered leases, a tenant seeking rent suspension or deferral on grounds of force majeure faces a high bar: UAE courts have consistently held that a tenant’s obligation to pay rent is not automatically suspended merely because business is disrupted. Rent payment requires only the transfer of money — something rarely rendered truly impossible by a port closure.

However, where a lease involves a commercial premises tied to an operation that physically cannot function — such as a freight forwarding company unable to access port facilities, or a business whose entire supply chain has been cut — a court may be more receptive. Article 249 hardship arguments, while not terminating the lease, may persuade a court to adjust rent obligations temporarily.

Off-plan property buyers and developers should also review their contracts carefully. Delivery delays caused by material shortages or construction site access restrictions may qualify for extensions. The Real Estate Regulatory Authority (RERA) in Dubai has historically allowed force majeure defences for developers in exceptional circumstances, though this requires proper notification and documentation.

Key Actions for Real Estate Clients:

• Review lease agreements for force majeure and hardship clauses immediately
• Issue written notice to landlords / tenants if performance is being affected
• Document all disruptions-  screenshots, shipping notices, port closure confirmations
• For off-plan buyers: check developer notifications and RERA registration for delay claims
• Do not assume rent can be withheld without legal advice - courts are strict

Commercial Contracts & Supply Chain

The Strait of Hormuz disruption has had the most immediate commercial impact. Major shipping lines including Maersk, Hapag-Lloyd, and CMA CGM suspended Gulf routes, implemented surcharges, and imposed booking stops on UAE, Qatar, and Kuwait-bound cargo. Approximately 170 container vessels were trapped inside the strait in the days following the strikes.

For businesses with delivery obligations under commercial contracts, the analysis turns on the specific contract language. A contract that expressly lists port closures, war, or maritime disruption in its force majeure clause provides the strongest protection. Where no such clause exists, parties must rely on Articles 273 or 249.

Supply chain contracts referencing FIDIC or ICC standard form clauses will need to assess whether the event qualifies under the defined force majeure events in those documents, the notice periods required (typically 14 days), and the scope of relief available (extension of time, cost adjustment, or termination after prolonged disruption).

The energy sector faces particular exposure. QatarEnergy declared force majeure on LNG deliveries following attacks on its facilities — a development with direct downstream consequences for UAE energy companies that import gas. This highlights how force majeure declarations can cascade through supply chains, each link triggering the next.

Key Actions for Commercial Clients:

• Review all active contracts for force majeure and hardship provisions
• Issue timely written notices where performance is being affected or delayed
• Review FIDIC clause 19 / ICC Article 17 requirements and deadlines
• Document alternative sourcing or routing efforts to demonstrate mitigation
• Seek legal advice before declaring force majeure — incorrect declarations can result in liability

Construction & Engineering

Construction projects in the UAE face dual pressure: site access restrictions in areas near targeted infrastructure, and material shortages arising from disrupted supply chains. Under UAE law and FIDIC contracts commonly used in Gulf construction, both may give rise to claims.

A contractor unable to access a site due to security restrictions or government orders has a strong force majeure argument under Article 273. Partial site access issues may support hardship claims under Article 249, allowing the court to adjust the timeline or cost obligations rather than terminating the contract entirely.

Extensions of time (EOTs) are available under FIDIC Red Book Clause 8.4 for force majeure events. Hardship-based cost adjustments are more complex: courts will not award increased costs simply because materials have become more expensive due to general market inflation. A party must show that the specific cost increase was caused by an exceptional, unforeseeable, qualifying event.

Key Actions for Construction Clients:

• Review FIDIC Clause 8.4 (extensions of time) and Clause 19 (force majeure) immediately
• Issue notices of delay promptly — late notice can forfeit EOT entitlements
• Photograph and document site access restrictions, material shortages, and price evidence
• Engage an expert on quantum if seeking cost adjustments under hardship
• Review payment provisions: can the employer withhold payment pending resolution?

Energy & Shipping

UAE energy companies face the most direct legal exposure of any sector. War-risk insurance withdrawal has forced vessel operators to reassess transit through the Strait of Hormuz, with insurance premiums rising sharply even before the strikes. The invocation of war-risk clauses in charterparties and marine insurance policies has created a complex web of contractual claims.

Under charterparties, owners can invoke war-risk withdrawal clauses to divert vessels away from high-risk zones. Charterers who have prepaid freight or who have upstream delivery obligations may find themselves unable to recover losses if the war-risk clause was properly invoked. Aggregation issues in insurance — where multiple losses are grouped under a single event — are also being scrutinised by insurers.

Downstream, UAE energy firms that have contracted to supply gas or crude to counterparties may need to assess whether Hormuz disruption qualifies as force majeure under their supply agreements. The geographic specificity of the disruption matters: a force majeure clause that covers government action or war but is silent on maritime disruption may not provide the protection a party expects.

Key Actions for Energy & Shipping Clients:

• Review charterparty war-risk clauses and act swiftly on any required notice
• Notify marine insurers promptly of any affected voyages or cargo
• Review downstream supply contracts for force majeure provisions and notice requirements
• Assess exposure from QatarEnergy and other upstream force majeure declarations
• Engage maritime law specialists for any vessel or cargo loss claims

Employment Law

The closure of UAE airspace and the grounding of thousands of flights has stranded expatriate workers and created complications for employers with workforce mobility obligations. The UAE’s Federal Labour Law (Federal Decree-Law No. 33 of 2021) provides some flexibility: employers may apply for temporary adjustments to working arrangements, reduce hours, or implement unpaid leave without triggering termination obligations, provided the circumstances are genuinely exceptional and properly documented.

Employees who are physically unable to report to work due to airspace closures or transportation disruptions should not be treated as absent without leave. Termination in such circumstances could expose employers to claims for arbitrary dismissal under Article 47 of the Labour Law.

For businesses with employees on temporary or project visas who are stranded abroad, careful management of visa status and employment contract obligations is essential. The Ministry of Human Resources and Emiratisation (MOHRE) should be consulted where uncertainty exists.

Key Actions for Employers:

• Do not terminate employees stranded by airspace or transport disruptions
• Document all affected employees and the specific obstacles they face
• Consider offering remote work arrangements where feasible during the disruption
• Review employment contracts for force majeure or exceptional circumstances provisions
• Consult MOHRE and obtain legal advice before implementing pay reductions

4. How to Invoke Force Majeure Correctly: A Practical Checklist

Many valid force majeure claims are lost not because the legal conditions aren't met, but because the procedural requirements are not followed. UAE courts and arbitral tribunals have consistently penalised parties who failed to document and notify properly.

• Notify the counterparty immediately — in writing, clearly identifying the event, the obligations affected, and the expected duration. Good faith under Article 246 requires prompt action.
• Preserve all evidence — shipping notices, government orders, port closure confirmations, email trails, supplier communications, and photographs.
• Demonstrate mitigation — show what steps were taken to avoid or minimise the impact. Courts will ask: did you try to find an alternative supplier? Did you explore alternative routes?
• Review your specific contract — does it have an express force majeure clause? What events does it list? What notice periods apply? These contractual provisions override default UAE law in most cases.
• Seek legal advice before declaring force majeure or hardship — an incorrect or premature declaration can itself constitute a breach of contract.

Timing is Critical. Under Cassation No. 624/2025, delayed notification was a key reason force majeure claims were rejected. If you are affected, the time to act is now — not after the disruption has passed.

5. The Transition to the New Civil Transactions Law

UAE businesses should also be aware of a significant legislative development: the new Civil Transactions Law (Federal Decree-Law No. 25 of 2025) entered the books in 2025 and comes into force on 1 June 2026. While the new law largely preserves the existing treatment of force majeure, it modernises the framework in several important respects.

Under the new law, force majeure is addressed through Articles 236 and 249. The conceptual approach remains consistent with the old Civil Code, grounding force majeure in objective impossibility of performance due to circumstances beyond the parties' control. However, the new law reinforces contractual autonomy, meaning that well-drafted contractual force majeure clauses will carry even more weight going forward.

For contracts currently in force, parties should consider: does my contract reference the old Civil Code articles specifically? If so, what happens when the new law comes into effect? Is there an interpretive risk? Legal advice on this transition is strongly recommended for parties in complex, long-term, or high-value contracts.

6. How Qlegal Consultants Can Help

Force majeure is not a self-service doctrine. Whether you are a tenant seeking rent relief, a contractor facing site access restrictions, an energy company with stalled deliveries, or an employer managing a stranded workforce, the legal landscape is nuanced and the window for action is narrow.

At Qlegal, our team provides:

• Contract audits to identify force majeure and hardship provisions across all your active agreements
• Rapid drafting of legally compliant force majeure notices in Arabic and English
• Sector-specific advice across real estate, construction, energy, maritime, and employment
• Representation in UAE courts and arbitration before DIAC, ADGCAC, DIFC-LCIA, and ICC
• Multilingual dispute resolution services for international counterparties

Act Now. If your business has been affected by the current regional disruption, the clock is running on your notice obligations. Contact us today for an urgent contract review and force majeure assessment.

 

** Disclaimer: This article is intended for general informational purposes only and does not constitute legal advice. The law applicable to any specific situation will depend on the precise facts and the terms of the contracts involved. Readers are strongly encouraged to seek independent legal advice from a qualified UAE-licensed lawyer before taking any action.**