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Contractual Performance Amidst Regional Instability
As geopolitical volatility intensifies across the Middle East, institutional investors and corporate entities must evaluate the resilience of their regional agreements. With the functional closure of the Strait of Hormuz and widespread airspace restrictions in March 2026, many market participants have already initiated force majeure protocols.
This briefing outlines the application of force majeure across the UAE’s distinct legal frameworks: the DIFC, and the ADGM.
The Dubai International Financial Centre (DIFC)
Governed by Article 82 of the DIFC Contract Law, the framework alignsclosely with international standards (UNIDROIT).
Statutory Shield: Even in the absence of a specific contract clause, Article 82 excuses non-performance due to impediments beyond a party’s control
Limitation: Notably, payment obligations are rarely excused under this framework unless the contract contains bespoke language to the contrary
The Abu Dhabi Global Market (ADGM)
The ADGM adopts English Common Law.
Strict Contract: Unlike Onshore UAE, there is no "implied" doctrine of force majeure. Relief is available only if an express clause exists in the contract
Interpretation: The ADGM Courts interpret these clauses strictly. The claimant must prove the event falls squarely within the defined terms (e.g., "Armed Conflict" or"Blockade")
Does the Current Conflict Trigger Relief?
While armed conflict is a classic force majeure trigger, the mere existence of war is insufficient for legal relief. A direct causal link between the conflict and the inability to perform must be established.
Precedent and Current Context
In 2024, the Dubai Court of Cassation validated a force majeure defense stemming from the Russia-Ukraine conflict, setting a precedent that large-scale geopolitical shifts can be deemed unforeseeable and unavoidable.
In the current 2026 context, two primary triggers are under scrutiny:
Maritime Blockades: The closure of the Strait of Hormuz is a paradigmatic disruption
Airspace Restrictions: Prolonged closures of regional flight paths have rendered certain logistics contracts physically impossible to execute
Strategic Recommendations for Clients
For entities navigating disputes or assessing exposure:
Jurisdictional Audit: Confirm if your contract is governed by UAE Civil Law, DIFC Law, or ADGM (Common Law), as this dictates whether you have statutory or purely contractual protection
Notification Protocols: Under DIFC law particularly, failure to provide "timely notice" of an impediment can lead to a loss of the right to claim relief
Evidence Preservation: Document the specific impact of the Hormuz closure on your supply chain to establish the "Causal Link" required by the courts
Conclusion: Proactive Management
The legal implications of the 2026 Gulf conflict will be determined bythe specific interplay of contract language and the duration of regionaldisruptions.
Early coordination with legal and risk management teams isessential to preserve rights and minimise liability.
