تحديث قانوني إقليمي: التطورات الجيوسياسية في منطقة الشرق الأوسط وشمال أفريقيا والمخاطر التعاقدية

The update focuses on how geopolitical disruptions in the Middle East impact contractual performance in the oil & gas and logistics sectors. The key legal question is whether these disruptions render performance objectively impossible or simply make it more difficult or costly. This distinction is critical because it determines whether a party can invoke force majeure to excuse non-performance or whether it must continue performing despite adverse conditions and bear the associated risks.

These developments go beyond operational inconvenience because they are actively triggering legal consequences under existing contracts. Disruptions such as delays, rerouting, and regulatory constraints are leading to missed obligations, increased costs, and disagreements over timelines. As a result, companies are facing claims and counterclaims, particularly regarding liability for non-performance, allocation of additional costs, and responsibility for delays.

Oil and gas companies are experiencing disruptions primarily in the form of constrained or unstable export and import routes, particularly across key maritime corridors. These challenges are causing delays in lifting schedules and deliveries, while also increasing operational costs due to rerouting and the need for additional storage. The impact is especially significant under long-term supply agreements and contracts involving government entities, where obligations tend to be rigid and exposure to liability is heightened.

Logistics providers are dealing with increased route instability, which has led to longer and less predictable transit times. This makes it more difficult to meet agreed delivery deadlines and has resulted in disputes over demurrage, freight charges, and delay penalties. In addition, security risks and evolving regulatory requirements are complicating operations, further increasing the likelihood of contractual non-compliance.

The central legal distinction lies between force majeure and hardship. Force majeure applies where performance is rendered objectively impossible due to external and uncontrollable events. By contrast, hardship arises where performance remains possible but has become significantly more burdensome, expensive, or complex. Correctly categorizing the situation is essential, as it directly affects the remedies available and the allocation of risk between the parties.

Route disruption does not automatically qualify as force majeure. If alternative routes or methods of performance are available, even if they are less efficient or more costly, courts are unlikely to accept that performance is impossible. In such cases, the situation is more likely to be treated as hardship rather than force majeure, meaning that contractual obligations generally remain in place.

Under Iraqi law, the threshold for establishing force majeure is relatively high, requiring clear proof of objective impossibility. Where performance remains possible through alternative means, courts are more likely to classify the situation as exceptional circumstances rather than force majeure. In such cases, the court may intervene to rebalance the contract – for example, by adjusting prices or extending deadlines – rather than fully excusing performance or liability.

In the United Arab Emirates, the legal outcome depends heavily on the wording of the contract itself, particularly the scope of the force majeure clause. Courts place significant emphasis on whether the clause clearly covers the relevant disruption and whether the affected party has complied with procedural requirements such as timely notice. Strong, well-drafted clauses can provide substantial protection, while weak drafting or procedural failures can limit or eliminate available remedies.

Contracts involving government entities introduce additional layers of complexity, including regulatory oversight and the potential for administrative intervention. Public interest considerations may also play a role in how disputes are resolved. As a result, even where disruption is evident, liability is not automatically excused, and outcomes may be influenced by factors beyond the strict contractual framework.

Common risk areas include the mistaken assumption that disruption alone excuses performance, without adequately considering whether alternatives exist. Companies are also frequently underestimating their exposure to demurrage and delay-related costs, failing to align operational decisions with contractual obligations, and neglecting procedural requirements such as timely notice. Limited engagement with regulators further compounds these risks.

Contracts that are particularly exposed include FOB and CIF arrangements, where the allocation of risk depends on delivery points and transport obligations. Charterparty agreements are also highly sensitive to delays and route disruptions, as are midstream transport and storage agreements, which rely heavily on timing, continuity, and logistical stability.

Companies should begin with a comprehensive review of their contracts, focusing on force majeure and hardship provisions across supply and logistics arrangements. At the same time, they should assess operational alternatives and ensure that all mitigation efforts are properly documented. From a legal perspective, it is essential to issue timely and compliant notices while maintaining detailed records of disruptions and associated costs. Strategic planning should also take into account jurisdictional differences, particularly the likelihood of judicial rebalancing in Iraq and the contract-driven approach in the UAE.

The key takeaway is that disruption alone does not excuse contractual performance. In Iraq, courts are more likely to rebalance contractual obligations rather than discharge them entirely, while in the UAE, outcomes depend primarily on the strength of contractual drafting and compliance with procedural requirements. In both jurisdictions, early and proactive legal positioning is essential to preserve rights, manage risk exposure, and maintain commercial leverage.