Across the MENA region, recent geopolitical developments have placed significant pressure on energy flows and logistics networks. In response, many counterparties have instinctively turned to force majeure as a mechanism for relief, often advancing force majeure claims in response to disruption.
However, a closer examination of legal frameworks – particularly in jurisdictions such as Iraq and the United Arab Emirates – suggests that this reliance may, in many cases, be misplaced.
What is emerging in practice is not a broad acceptance of force majeure, but a more nuanced and, at times, restrictive approach. In many situations, disruption is being treated not as a basis for discharge of obligations, but as a trigger for continued performance under altered conditions.
The Core Misconception: Disruption Equals Relief
A common assumption in the market is that significant disruption – whether arising from conflict, route instability, or regulatory constraints – automatically engages force majeure provisions.
In reality, the legal threshold is considerably higher.
Across MENA jurisdictions, the key question is not whether disruption exists, but whether it has rendered performance objectively impossible, or commercially more difficult or expensive.
Where performance remains achievable, even through alternative means, courts and tribunals are increasingly reluctant to recognise force majeure.
Iraq: The Rise of Hardship Over Force Majeure
A High Threshold for Impossibility
Under Iraqi law, force majeure requires that performance be rendered impossible due to a foreign cause beyond the control of the obligor. This is not a question of inconvenience or cost – it is a question of absolute inability to perform.
In the context of energy and logistics, this threshold is rarely met, as cargo can often be rerouted, alternative ports or land corridors may be available, and delivery timelines may be extended rather than eliminated.
As a result, many situations that are initially framed as force majeure are more accurately characterised as exceptional circumstances (hardship).
From Discharge to Adjustment
This distinction has significant legal consequences.
Rather than suspending or terminating obligations, Iraqi courts may instead: adjust pricing or financial terms; extend performance timelines; or rebalance the contractual relationship.
This reflects a broader judicial approach focused on preserving contracts while mitigating unfairness, rather than allowing parties to exit obligations entirely.
UAE: Contractual Discipline and Limited Flexibility
The Primacy of Drafting
In the UAE, the analysis is more closely tied to the terms of the contract. Force majeure clauses are interpreted based on their wording, with particular emphasis on defined events, causation, and compliance with notice requirements.
Where clauses are narrowly drafted, or where procedural requirements are not strictly followed, reliance on force majeure may fail – even in the presence of significant disruption.
Force Majeure Claims and Alternative Performance Risks
As in Iraq, the availability of alternative performance routes plays a critical role.
If a party can perform through rerouting shipments, adjusting logistics structures, or incurring additional cost, then the argument for force majeure weakens considerably.
Force Majeure Claims in Energy and Logistics: Where Risk Is Highest
The distinction between force majeure and hardship is particularly significant in the oil & gas and logistics sectors.
1. FOB / CIF Supply Contracts
- Delivery obligations often remain technically achievable
- Price volatility and transport disruption increase exposure
- Disputes arise around risk transfer and timing
2. Charterparty and Freight Arrangements
- Rerouting may be required, triggering cost and delay issues
- Demurrage claims become more frequent
- Parties face competing interpretations of deviation and performance
3. Midstream and Storage Agreements
- Capacity constraints and delays affect throughput
- Obligations may continue despite operational disruption
- Liability arises from failure to meet adjusted timelines
Across these structures, a consistent pattern is emerging:
Operational flexibility is being interpreted as legal capability.
Force Majeure and Rerouting: Solution or Source of Liability?
One of the more significant developments in recent months has been the increasing use of alternative routing strategies.
While commercially necessary, rerouting introduces a complex legal dynamic.
On one hand, it demonstrates mitigation efforts. On the other, it may:
- Undermine claims of impossibility
- Reinforce the argument that performance remains achievable
- Shift the issue from force majeure to cost allocation
In effect, what is intended as a solution may become the basis for continued contractual liability.
Rethinking Force Majeure Claims: A Shift in Legal Strategy
The evolving landscape suggests a broader shift in how disruption is treated across the region.
Rather than relying on force majeure as a primary defence, legal practitioners are increasingly framing arguments around hardship and rebalancing, focusing on evidence of impact and mitigation, and aligning legal positions with operational realities.
This reflects a more sophisticated approach, recognising that the success of a claim depends as much on its framing as on the underlying facts.
Conclusion
The current environment challenges a long-standing assumption in commercial practice: that disruption provides a clear path to contractual relief.
In the MENA region, particularly in Iraq and the UAE, the reality is more complex.
Force majeure is not triggered by disruption alone.
Where performance remains possible – even under strained conditions – courts and tribunals are likely to favour continuity over discharge, and adjustment over termination.
For practitioners advising clients in the energy and logistics sectors, this requires a careful reassessment of both legal strategy and commercial positioning.
A Final Observation
As supply chains adapt and operational models evolve, the legal framework is responding in kind.
The key question is no longer whether disruption exists, but how it is interpreted, evidenced, and positioned within the contractual framework.
Those who recognise this early are likely to navigate the current environment with greater clarity – and fewer surprises.
FAQ: Force Majeure Claims in MENA Energy and Logistics
Force majeure claims are failing because courts and tribunals are applying a high threshold for relief. Disruption alone is insufficient – parties must demonstrate that performance is objectively impossible, not merely more difficult or costly.
Force majeure results in the suspension or termination of obligations due to impossibility of performance. Hardship, by contrast, applies where performance remains possible but has become excessively burdensome, allowing courts to adjust contractual terms rather than discharge them.
Under Iraqi law, force majeure requires absolute impossibility caused by an external event beyond the obligor’s control. In practice, courts often recharacterise such situations as hardship and respond by rebalancing the contract rather than terminating it.
In the UAE, force majeure is primarily governed by the wording of the contract. Courts closely examine defined events, causation, and compliance with notice requirements, meaning poorly drafted clauses or procedural failures can undermine claims.
In many cases, yes. If a party can perform through rerouting, alternative logistics arrangements, or additional cost, this suggests that performance remains possible, significantly weakening the basis for force majeure.
The oil and gas and logistics sectors are particularly exposed, especially in FOB/CIF contracts, charterparty arrangements, and midstream or storage agreements, where operational flexibility often implies continued legal capability to perform.
No. Increased cost or commercial difficulty does not meet the legal threshold for force majeure in most MENA jurisdictions. These circumstances are more likely to fall within the doctrine of hardship.
Contract drafting is critical, particularly in the UAE. Narrow definitions of force majeure events, strict notice provisions, and detailed causation requirements can determine whether a claim succeeds or fails.
Courts in the region increasingly prioritise preserving contractual relationships. Where possible, they prefer to adjust obligations and rebalance risk rather than allow parties to exit contracts entirely.
Practitioners are shifting toward hardship-based arguments, focusing on evidencing impact, demonstrating mitigation efforts, and aligning legal claims with operational realities rather than asserting impossibility.
Mohammed Koperly
As Managing Partner in Iraq for Salt & Associates Law Firm, Mohammed is recognized for his expertise in commercial and corporate law, developed through significant roles both in Iraq and London. He is well known for advising international corporations on entering the Iraq market, corporate structuring, and complex commercial transactions. Mohammed has been instrumental in asset recovery, developing cybersecurity legal frameworks, and managing intricate corporate restructuring for multinational entities, including a major German corporation.`
