Events linked to the Middle East conflict could give construction contractors in the region rights to claim relief from obligations they owe under their contracts, an expert has said.
Doha-based Pamela McDonald of Pinsent Masons, who supports businesses in the energy and infrastructure sector in resolving disputes, said armed hostilities and accompanying state warnings, together with return-to-work directives, the evacuation of foreign nationals, and price escalation, have impacted on construction projects and could trigger rights to relief.
In relation to armed hostilities, the combination of travel restrictions for staff and cargo, mandatory evacuation orders issued by some embassies, and state authorities’ intermittent messages via public announcement systems calling on people to shelter in place, could give rise to claims under construction contracts, either because the performance of works is impossible in that scenario or because it creates a hardship rendering performance of obligations excessively onerous without being strictly impossible.
Both concepts – impossibility and hardship – are recognised in civil code systems operating in Middle East states such as the UAE, Qatar and the Kingdom of Saudi Arabia (KSA). The distinction between the two matters, because where the concept of impossibility is engaged, claims under force majeure clauses may be able to be made, whereas mere hardship does not constitute a force majeure event but may give rise to other types of claim.
Force majeure clauses are clauses that alter parties' obligations and/or liabilities under a contract when an extraordinary event or circumstance beyond their control prevents one or all of them from fulfilling those obligations.
Depending on their drafting, such clauses may have a variety of consequences, including: excusing the affected party from performing the contract in whole or in part; excusing that party from delay in performance, entitling them to suspend or claim an extension of time for performance; or giving that party a right to terminate.
McDonald said: “Whether the impact of the regional conflict on specific projects constitutes a legally sufficient intervening event will determine the extent to which contractual relief can be claimed. In most Middle East jurisdictions the answer turns on whether events were unforeseen, unavoidable and incapable of being mitigated. Where government orders are mandatory and backed by legal sanction, contractors may have a credible basis for both impossibility and hardship claims.”
“Critically, hardship claims under civil code principles typically entitle a party to judicial rebalancing of the contract rather than full release – meaning compensation, not termination, is the likely outcome. Contractors considering claims should keep a record of all public announcements, together with timestamps, and cross-reference them with on-site records,” she said.
One complicating factor for Middle East contractors to unpick is the impact that phased return-to-work directives from state authorities in the region have on rights to claim relief under their contracts.
McDonald said: “As conditions normalise, the legal basis for claiming impossibility weakens proportionally. Under FIDIC and most bespoke Middle East contracts, force majeure entitlement subsists only for as long as the qualifying event persists. Contractors must therefore maintain granular, date-stamped records demonstrating which specific activities remained impacted at each stage of the phased reopening.”
“Impossibility defences that were robust during a full shutdown become difficult to sustain once partial mobilisation is feasible. Hardship arguments, by contrast, may remain viable longer if productivity or cost metrics can be shown to have been materially affected even after physical access is restored. Mitigation planning should be documented in writing to rebut any later allegation that the contractor failed to resume reasonable progress,” she said.
Some governments have issued formal evacuation recommendations for their nationals located in the affected region. McDonald said this could cause workforce disruption to some contractors – and may give them scope for relief. However, a change in law in a foreign territory recommending evacuation may not constitute a compensable change in law in the domestic territory’s laws governing the contract.
“The question is whether the loss of key personnel – engineers, site managers, specialist subcontractors – generates a compensable claim,” McDonald said. “Under force majeure provisions, the event must typically be beyond the contractor's control and make performance impossible or substantially impeded. A formal government evacuation recommendation is strong supporting evidence but much will depend on whether the departed personnel are key personnel, whether their functions can be substituted, and how long the disruption lasts.”
“Contractors should document the specific roles affected, the causal impact on programme and cost, and any steps taken to source alternative personnel. Where the contract identifies key personnel by name or role, their departure may trigger separate notification obligations,” she added.
McDonald said the position is more nuanced in relation to foreign embassies that only facilitate, rather than formally recommend, evacuation of their nationals.
“The absence of a mandatory government directive weakens, but does not eliminate, the claim,” McDonald said. “In these circumstances, the contractor's entitlement depends more heavily on the objective circumstances on the ground: whether the security environment made continued presence unreasonable, whether the contractor's duty of care obligations to its employees compelled withdrawal, and whether a reasonable and prudent employer would have maintained its workforce on site.”
“Health and safety legislation in several Middle East jurisdictions imposes non-delegable duties on employers. Where withdrawal was justified on those grounds, the documentation of the risk assessment and the decision-making process becomes critical evidence,” she said.
McDonald said contractors should consider the type of relief they want to obtain before deciding how to frame their claims.
“Under most FIDIC forms, force majeure entitles a contractor to an extension of time but not, absent specific contract wording, additional cost,” McDonald said. “A change in law provision, by contrast, can entitle the contractor to both time and money.”
“Government orders restricting site access or imposing new safety protocols may qualify as a change in law if the contract so defines it. Contract wording varies considerably: some bespoke Middle East public sector contracts restrict change in law entitlement to legislative changes only, excluding executive or regulatory action. Others are broadly drafted and include government “decisions”. The precise contractual definitions should therefore be carefully reviewed. Where the facts support it, contractors could advance both types of claim supported by concurrent notices,” she said.
The supply of materials could be affected by prolonged conflict. McDonald said a shortage of supply could push up material costs and be another trigger for contractors in the region to claim relief. However, she said the issue is commonly contentious.
“A price adjustment mechanism is built into some FIDIC contracts, but its application depends on whether the contract incorporates the relevant adjustment formulae and indices – many Middle East public sector contracts delete or modify this clause,” McDonald said.
“Where price adjustment is not contractually provided, escalation claims are generally characterised as a contractor's risk unless the magnitude is so exceptional as to support a hardship argument under the applicable civil code. Contractors facing acute escalation should document baseline prices at the time of tender, track the trajectory of increases with market evidence, and quantify the impact with precision. Early engagement with the employer – framing the discussion around commercial sustainability rather than adversarial claims – often produces more practical outcomes than immediate formal escalation,” she said.
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