Middle East conflict: force majeure and other pathways to relief for UAE construction projects

Travel restrictions, differing evacuation protocols, damage to infrastructure and heightened personal safety concerns are creating significant uncertainty around workforce availability and productivity. In some cases, access to site is severely impacted, and the possibility of continuing physical damage to sites, access routes and works in progress cannot be discounted.

The knock-on effects run deeper still. Supply chains are under pressure from shipping delays and escalating material costs, while growing geopolitical uncertainty is likely to prompt financiers to reassess their exposure to heightened regional risks.

For contractors, these pressures may be felt through workforce interruptions, safety‑driven stoppages, and tightening supply chains - echoing challenges experienced during other major disruptive events such as the Covid‑19 pandemic.

Although parties are best advised to first consider commercial negotiation to manage the consequences of the conflict once appropriate contractual notices have been given, such discussions may not always deliver an acceptable outcome. Where agreement proves elusive, formal claims may become necessary. At the same time, even whilst commercial negotiations are pursued, parties should take steps now to place themselves in as strong a position as possible.

Whilst each project, contract and claim will be different and must be examined in light of its own specific facts, we explore below some potential avenues of relief under contract and UAE law.

Terms of the contract

The impacts of the conflict may trigger relief under a number of contractual provisions. The existence and ambit of contractual relief will ultimately depend on the precise wording in the particular contract but the following should be carefully reviewed:

Force majeure

Force majeure provisions are often engaged where an unforeseeable event beyond the parties’ control prevents performance of the contract.

It is feasible that the conflict could trigger these provisions, which often expressly reference conflict-related events. It is common for force majeure provisions to provide for an extension of time when triggered, for as long as the unforeseeable event persists. However, entitlement to additional costs under these provisions can be less straightforward and will depend on the precise wording of the provision and how the triggering event is classified.

Change in law

Change in law provisions are often engaged where the relevant authorities identified under the contract enact changes to the relevant law, which impact the works and/or their cost.

Government measures such as movement restrictions, safety mandates, border closures and airspace/waterway restrictions may constitute a change in law. However, these claims are often reliant on the width of the contractual definitions of "government" or "authorities" - who made the changes or issued the directives etc - and "laws". If narrower definitions are adopted it may be necessary to show that the government itself has enacted a new piece of legislation. If broader definitions are used, it may be sufficient to point to guidance issued by a government-related entity. These claims are highly specific to the facts and specific clauses of the contract.

If change in law claims can be established, they typically provide an extension of time and entitlement to additional costs.

Change in cost

Change in cost provisions may allow for adjustments based on changes in the cost of labour and materials.

These are likely to be triggered where supply chain pressures cause increases in the cost of labour and key materials. However, these clauses are typically deleted or amended in most standard form contracts in the Middle East. Even if included, they usually do not include any entitlement to an extension of time.

Variations

Variation mechanisms are typically triggered where changes to the works are instructed.

Given an instruction is usually required, these provisions are less likely to be triggered by the conflict. However, contractors should monitor any communications issued by the employer or their representative as, to the extent that such communications include anything which could amount to an instruction to change the works, the way they are executed, or the allocation of resources, a variation could arise.

Extensions of time

Extensions of time are typically triggered by variations and/or any delays or impediments attributable to the employer - including, in some instances, its other contractors or related to employer-supplied materials.

As with variations, these provisions will likely require some action from the employer, or those for which it is responsible, to be triggered. However, any instructions related to access or approvals being withheld - for example, due to safety concerns - or delays caused by other contractors which impact a contractor’s works could trigger this mechanism.

Provisions of UAE law

Where UAE law applies, the UAE Civil Transactions Law provides several avenues that may apply:

Article 273: force majeure

The concept of force majeure under UAE law is governed by Article 273 of the UAE Civil Code (Federal Law No. 5/1985). While Article 273 does not define an event of force majeure, it provides that in the event performance of an obligation in a bilateral agreement becomes "impossible", the corresponding obligation shall be extinguished and the contract rescinded. Similarly, Article 893 of the UAE Civil Code provides that a contractor is not liable for delay or non-performance where the cause is beyond their control, codifying force majeure specifically in the construction context.

The key under this provision is therefore impossibility. An analysis of case law of the UAE courts relating to Cocid-19 and comparable geopolitical disruptions indicates that force majeure claims under the consolidated UAE framework require the satisfaction of several conditions:

• that the event be external, meaning originating from an external cause for which the obligor is not responsible;
• that the event be (reasonably) unforeseeable at the time of contracting;
• that the event be irresistible or unavoidable, meaning that the obligor could not have prevented its occurrence through reasonable means; and
• that such event be the direct cause of the non-performance which leads to its impossibility; a mere contributing factor is not enough. Also, an influence that merely makes the performance of the contract more onerous while still possible does not trigger the application of Article 273.

The question of foreseeability is often the most contentious of these criteria and will be determined as at the time the parties entered into the agreement. The Dubai Court of Cassation has consistently examined the question of foreseeability objectively, by reference to “what a reasonable commercial counterparty in the given market would have foreseen at the time of contracting”.

Whilst this represents the position as the law stands, once the amended UAE Civil Code comes into force in June 2026 under Federal Decree-Law no. 25/2025, more precise definitions on the foreseeability threshold when it comes to the characterisation of an event of force majeure are anticipated, as well as further clarity on the notice and mitigation obligations of the affected party.

Article 249 – exceptional circumstances / hardship

The exceptional circumstances doctrine (or “hardship doctrine”), analogous to the French 'théorie de l'imprévision', allows judicial intervention to reduce an obligation, for which performance became excessively onerous due to exceptional and unforeseeable events, to a reasonable level.

While Article 273 dealing with force majeure applies in situations where performance becomes impossible, the hardship doctrine requires merely that the performance of the obligation becomes extremely burdensome without necessarily being impossible. In addition to evidencing the externality, unavoidability and foreseeability elements similar to force majeure claims, hardship claims must also show the exceptional occurrence of the event and the extreme hardship it triggers to the performance of the contract.

In this case, the UAE courts will have a discretionary power - that may not be excluded by contract - to assess the impact of the event on the contract, and to reduce the onerous obligation accordingly. Therefore, the remedy under Article 249 is different to that under Article 273, where the impossibility of performance will often lead to termination.

Article 246 – good faith / abuse of rights

The doctrine of good faith may support arguments requiring parties to act reasonably, to cooperate, and prevent abusive reliance on strict contractual rights during periods of exceptional disruption. In the context of construction contracts in particular, it can be said that the principle of good faith implies amongst the parties a duty of contractual loyalty, collaboration and fair-dealing. More particularly in times of conflict and exceptional circumstances, performing a contract in good faith in accordance with Article 246 of the UAE Civil Code implies the parties’ obligations to notify one another of any expected changes/delay in performance, and to mitigate any such changes or delays, prior to their reliance on any of the remedies provided for by the contract and the law. It is therefore important that parties take steps to actively mitigate their positions whilst exploring their legal remedies.

Immediate action points

Against the above backdrop, there are some immediate action points that parties should keep in mind.

Understand your claim

As we discuss above, not all avenues for relief are equal. Some provide entitlement to additional costs, some are limited to additional time - which will provide relief from liquidated damages but won’t assist in recovering additional costs incurred - and some may result in termination. Many claims arising from the impact of the conflict will likely involve both time and cost elements and accordingly, choosing an avenue or combination of avenues which provides relief for both is preferable, but requires careful formulation.

Keep track of additional costs

Record cost increases, changes in suppliers or materials, idle time, and any protective measures. As has been seen with many Covid-19 claims, the amount ultimately recoverable can often turn on the quality of the contemporaneous cost records and the ability to isolate those costs which are an increase.

Detailed record-keeping

Maintaining detailed evidence of instructions, site conditions, communications, access restrictions, delivery delays, safety instructions and workforce limitations will make evidencing key aspects of any claim significantly easier. It is also important to keep a record of public announcements by governmental authorities or news/social media reports of guidance or directives being issued in the context of the events in question.

Review your contract carefully

There may be additional avenues for relief which are unique to your contract and a specific situation. Conversely, the general avenues for relief outlined above may not apply because of the specific drafting of your contract. Seek advice wherever unsure. As part of this exercise:

• check definitions: terms such as “force majeure”, “change in law” or “employer risk event” may differ substantially between contract forms and across jurisdictions. The relief available may depend on how these terms are defined.
• check governing law and dispute resolution clauses: each of these can have a bearing on the available avenues for relief.
• check any conditions precedent to claim: many contracts contain strict notice requirements, especially English-law governed or FIDIC-based forms. Failure to comply can put an otherwise valid claim at risk.
• follow the process: once you have reviewed your contract and formed a view on the basis of the claim, follow the process within the time required. This is unlikely to stop at issuing one notice and more is likely to be required. Tight timeframes and vast amounts of information required in certain notices makes planning ahead essential.
• look beyond the upstream contract: consider whether relief could be obtained through insurance and/or whether steps should be taken to protect your position under subcontract / supply agreements.