Force Majeure, Again what the US-Israel war with Iran means for your contracts

Like everything else in law and contract, it is never that simple. It is not hard. Because everything becomes simple when and if you understand it. If QatarEnergy has invoked force majeure, or anyone else you've heard of, they have invoked force majeure for their specific contracts — which you have not read. So, here is the question: can you invoke force majeure and have the performance of your contractual obligations delayed, excused, or downright terminated? Conversely, can you respond with a strong and brutal "no sir, you can't" to the counterparty that tries to invoke force majeure against you? 

We have written an article on what force majeure is. For its brevity, it has been rather disproportionately appreciated, widely circulated in academic circles, and cited in graduate papers. But summarily speaking, here are the key extracts: What is force majeure? A force-majeure event, when it occurs, excuses performance of the contract despite its express provisions obligating the parties to perform. It is one of several exceptions that excuse the parties from performing the contract. If the force majeure clause specifically covers the relying event, the parties have a better chance of excusing themselves from further obligations, as they explicitly agreed to this condition in the contract. A court would uphold the sanctity of the contract and the parties' freedom to define the parameters of their obligations as they see fit. The court cannot depart from explicit clauses to make the contractual bargain fairer. 

The Event of War

In the present situation, the "force majeure" event we are going to grapple with in this article is the US-Israel war with the Islamic Republic of Iran. Hereinafter, we will refer to this war as the "Event of War". In this article, we will analyse whether this specific Event of War amounts to force majeure or otherwise permits the excuse of performance of contractual obligations, and to what extent and in what circumstances. 

The timing of the Contract 

Contracts entered into before 28th February 2026 would be able to invoke the force majeure clause. Contracts made amid the war and the ensuing events cannot later rely on those same events to excuse performance. When a commercial party enters into an agreement, it is deemed to have accepted to perform its obligations in the circumstances and facts that exist at that time and should be in the knowledge of a reasonable commercial contracting party. 

The wording of the Contract 

Force majeure is purely a creation of a contract, thereby entailing an application of the general principles of contractual interpretation. 

Question 1: Is the impact of the ongoing war between Israel and the USA against Iran covered by the force majeure clause in your agreement? War is often specifically defined as a force majeure event in most contracts that contain a force majeure clause. Nearly every agreement which includes a force majeure clause has "war" as the second or third in the list of events and circumstances that qualify as an event of force majeure. 

Question 2: Is the current Event of War (capitalised as defined above) direct and relevant to your contract? There is always a war going on somewhere in the world these days. Could everyone in the world since the start of the Ukraine war in 2022 have the right to excuse performance of their contractual obligations or accept refusal of performance by their counterparts if they invoked force majeure under the name of the Ukraine war? 

No. 

Invoking the Event of War as a force majeure event would then require you to prove "causation". Has the Event of War directly affected the performance of the obligation being excused? Again, the contract wording matters. For example, if your contract states: "If a party is unable to perform any of the obligations under this contract as a result of force majeure".

The question of causation becomes more stringent because you must show whether the war in question is a "direct cause" that makes the contracting party "unable to perform" its contractual obligation. [emphasis added]. Being unable to perform requires a certain degree of impossibility, not just mere inconvenience or hardship in performing the obligation. Alternatively, your agreement could read: "If any of the events of force majeure occur, the contracting parties will be excused from the performance of their obligations under the contract". Technically, under this agreement's wording, any war anywhere in the world can then excuse performance of your agreement. But that interpretation would be just an oxymoron to the concept of entering into a contract. Therefore, the obligation could be excused by first proving a reasonable nexus between the Event of War and the obligation; and then showing that a reasonable level of negative impact of the Event of War and the performance of the obligation. In this case, you may not need to prove total impossibility. Contracts without a force majeure clause.

 If your agreement is not extensively drafted or formally agreed in writing at all, performance can still be legally excused under two principles of contract law. 

If your contract does not have a force majeure clause that mentions war or even if mentioned, if the application of this specific Event Of War and its impact on your contract is disputed by the counter party, then depending on the governing of your contract either: the common law concept of frustration would apply; or the civil code application of force majeure under the specific civil codes of the country whose law governs the contract would apply. 

The Civil Law: Impossibility of Performance 

The civil law and the legal principle of 'impossibility of performance' are found in most civil codes in civil law jurisdictions like that of France, UAE, Qatar, KSA and others. 

 The UAE Civil Code requires impossibility: 

Article 273 (1) In bilateral contracts, if a force majeure arises that makes the performance of the obligation impossible, the corresponding obligation shall be extinguished, and the contract ipso facto rescinded. 

Article 273 (2) If the impossibility is partial, the consideration for the impossible part shall be extinguished. This also applies to provisional impossibility in continuous contracts. 

In practice, its application by Courts is akin to the French Civil Code, which requires no less than three criteria to be satisfied before an event can be considered one of force majeure:

(a) Unpredictability: If the event could be foreseen at the time of entering into the contract, it should have been provided for in the contract, and the relying party is expected to have prepared for it or inserted such event in the definition of force majeure under the contract. A party's failure to specify a foreseeable risk gives an assumption that the party intended to take such risk at the time of entering the contract. 

(b) Externality: The event must not be attributable to the fault of the relying party, and the relying party must have had nothing to do with its occurrence. 

(c) Irresistibility: The event must be insurmountable, and the relying party could not have done anything to mitigate it or avoid its occurrence. Financial difficulty or economic hardship does not excuse non-performance, as contracting parties are expected to have reasonable business acumen and are expected to have calculated the economic risks of entering into contractual obligations.

The Common Law: Frustration of Contract 

If your contract is governed by English law or the law of the country where the common law concept of frustration exists or even co-exists with the concept of impossibility of force majeure, the principle of Frustration of Contract would apply. Common law requires a precedent-based analysis of facts and case law. The key principle that emerges from the case law is that a supervening event, in our case, the Event of War, shall frustrate a contract only if it renders "performance impossible or fundamentally different" from what was agreed, not merely more expensive, slower, or commercially disadvantageous. [emphasis added]. 

Shipping, Sale and Charterparty Agreements 

Shipping, sale of goods, and charterparty obligations may remain enforceable despite massive cost increases. A good parallel is the current situation arising from the current blockage of the Strait of Hormuz and the closure of the Suez Canal in 1956 (the Suez Crisis). 

The Suez Crisis and Leading Cases 

The Suez Crisis resulted in significant litigation in English contract law on the doctrine of frustration, specifically whether a contract is terminated when an alternative, albeit more expensive or longer, route becomes available. The courts generally held that increased cost or difficulty did not constitute frustration. Verdict: The House of Lords held that the contract was not frustrated. Although both parties likely contemplated the route via Suez, the agreement did not expressly state that the shipment must take the Suez route. Therefore, the contractual obligation, being the delivery of goods, was not impossible to perform. The shipment could have been carried via the Cape of Good Hope, and the contractual obligation could have been performed, even if performance would have become more expensive. This principle has repeatedly been used in shipping disputes involving canal closures, war zones, piracy routes and sanctions rerouting. 

The Blockade of the Strait of Hormuz 

In the current Event Of War, Iran has made it nearly impossible for ships to cross the Strait of Hormuz. Hormuz is one of the world's most critical maritime chokepoints, especially for oil and LNG shipments. If it were blocked or severely restricted, the legal analysis in many contracts would resemble the reasoning in the Suez Canal example. Courts will determine, on a deeply specific, case-by-case basis, whether alternative routes remain available to avoid delivery impossibility. For example, in the Suez closure case, the courts ruled that ships could sail around Africa. Similarly, in the case of a Hormuz closure, the wording of the obligation under the agreement, and whether tankers could theoretically load elsewhere, reroute pipelines, or use alternative export terminals, will become points of factual contention. 

Distinguishing Factors in this Event of War 

Modern contracts specifically address events such as this Event of War Given the rise in global trade and global events such as wars and conflicts, nearly all modern contracts, especially those related to freight and cargo of goods, to nearly all oil and gas contracts, whether upstream or downstream, include specific clauses that expressly address wars, canal closures, blockades etc. accordingly reliance on the law (whether under civil law or common law) may not be necessary. If such clauses allow termination or suspension upon closure of a chokepoint, the outcome differs from the Suez Canal closure case. Without them, the court may still require performance via any feasible route. How the situation is impossible for Gulf Countries: Unlike our Suez Canal Crises example, where the question before the courts concerned the choice, convenience and cost of one shipping route over another, in this present Event of War some cargoes physically cannot exit the Gulf without that strait. This is truer for oil and gas contracts than for any other affected sector. Oil and LNG contracts depend on fixed infrastructure: pipelines, liquefaction facilities, export terminals, specific maritime chokepoints, etc. If any of these become unavailable, performance may become physically impossible, not merely more expensive. If oil loaded in the Persian Gulf cannot reach open ocean at all, the situation could cross the Suez Canal case threshold and become true impossibility, potentially frustrating the contract. 

So, what do we learn from it? 

Whether force majeure or its English equivalent of Frustration applies to your case, the outcome depends on a case-by-case basis. Under the UAE Civil Code, force majeure requires a high burden of proof to show that the impact made performance impossible and that it was neither foreseeable nor resistible. In the case of Frustration, the Event of War must have rendered performance of your or your counterparty's obligation impossible or radically different from what was contracted, not just more onerous or expensive. 

Contact Jade Al Araoui, Partner, Corporate & Regulatory — E: jade@fareyallp.com — T: +971 56 171 5276; Fareya Azfar, Partner, Arbitration & Litigation — E: fareya@fareyallp.com — T: +971 56 705 8483 

The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice. © Fareya Azfar & Araoui LLP 2026