A trading company operating between Singapore and Dubai signs a long-term supply agreement. Months later, a regional disruption makes performance impossible – or at least ruinously expensive. The contract contains a force majeure clause, but it was drafted in a hurry and says little about partial impossibility or price escalation. At that moment, the difference between a well-advised client and an unprepared one is the difference between a negotiated exit and protracted litigation before the Dubai Courts (the primary onshore civil court system) or the DIFC Courts (the Dubai International Financial Centre's common law court system).
Force majeure and hardship in UAE law operate under two parallel regimes: the onshore civil law system, rooted in UAE commercial and civil legislation. Additionally. The offshore common law courts at the DIFC and ADGM. This apply English law principles unless the parties specify otherwise. Excusing performance under either regime requires satisfying conditions of externality, unpredictability, and unavoidability – but the thresholds, procedures, and remedies differ substantially between the two. The practical consequence is that the choice of governing law and dispute forum can determine whether a disrupted contract is terminated, renegotiated, or simply lost.
This analysis examines the doctrinal foundations of force majeure and hardship under UAE law, the competing positions taken by UAE courts, the gap between statute and actual practice. Cross-border implications for clients operating across Asia and the Middle East. Additionally, the strategic steps that reduce exposure before and during a disruption event.
Doctrinal foundations: two regimes, one jurisdiction
UAE commercial and civil legislation provides two analytically distinct concepts that respond to business disruption: force majeure and the theory of unpredictable circumstances. Often called hardship or النظرية الطارئة (the doctrine of supervening circumstances, sometimes transliterated as Nazariyyat al-Zuruuf al-Tari'a). Understanding the difference between them is the first analytical step.
Force majeure – quwwa qahira (overwhelming force) under UAE civil legislation – applies where a supervening event renders performance objectively impossible. The three classic conditions are: the event must be external to the contracting party, it must be unforeseeable at the time of contracting. Additionally. It must be irresistible. This means no reasonable precaution could have prevented its effect. If all three conditions are met, the obligation is extinguished. The debtor is released from liability, and neither party owes the other compensation for the lost performance.
Hardship operates differently. UAE civil legislation contains a provision. derived from Egyptian civil law principles. This in turn drew from French and Swiss civil law models. that permits a court to reduce an excessively onerous obligation to a reasonable level where an exceptional supervening event makes performance possible in law but ruinously burdensome in economic terms. The key distinction from force majeure is that performance remains possible; it has simply become disproportionate. The court does not terminate the contract. Instead, it adjusts the terms. This is a judicial power, not a contractual right, and the party seeking it must initiate proceedings before the relevant court.
The DIFC and Abu Dhabi Global Market (ADGM) free zones each have their own contract legislation modelled on English law and international commercial principles. In these systems, force majeure is almost entirely a contractual matter. There is no general statutory hardship regime equivalent to the onshore civil law doctrine. Where a DIFC-governed contract is silent on hardship. The courts may consider the DIFC Contract Law's provisions on change of circumstances. but the threshold is demanding and the court's power to revise rather than terminate is limited. Practitioners at the DIFC Courts note that the absence of a robust statutory hardship doctrine places heavier weight on the precise drafting of the contract's force majeure clause.
This doctrinal asymmetry has significant practical consequences for international businesses. A contract governed by onshore UAE law provides a statutory backstop for extreme hardship even where the contract itself is silent. A DIFC or ADGM-governed contract does not. The choice of governing law is therefore not merely a matter of preference for a familiar legal culture – it directly affects the remedies available when circumstances change.
Competing court interpretations and the statute-to-practice gap
The gap between the statutory text and the outcome of actual proceedings before UAE courts is wider than practitioners from common law backgrounds often expect. This section examines three recurring areas of divergence.
The threshold of impossibility. UAE courts have consistently interpreted force majeure as requiring absolute impossibility, not merely difficulty or even severe economic hardship. The Dubai Court of Cassation (the highest civil court in the Dubai onshore system) has repeatedly confirmed that rising costs. Currency depreciation. Additionally, supply chain disruption. standing alone. do not constitute force majeure under UAE civil legislation. The event must make performance legally or physically impossible, not merely more expensive or less profitable. A party relying on a global pandemic, a port closure. Alternatively. A sanctions regime to claim force majeure must demonstrate that performance became impossible for that specific contract, not merely that the broader environment was difficult.
In practice, this means that the overwhelming majority of force majeure claims filed in onshore UAE courts fail at the threshold stage. Courts examine whether the claimant took all reasonable precautions. They also examine whether alternative performance routes were available. Where a supplier could have sourced materials from a different origin but chose not to, courts have declined to grant relief even where the originally contemplated supply route was closed. This de facto requirement to exhaust alternatives before pleading force majeure is not explicitly stated in the statute, but it emerges consistently from court reasoning.
Partial impossibility. A less-examined area involves contracts where performance becomes impossible for part of the subject matter. Onshore UAE courts have developed a proportionality approach: if a portion of the contracted goods or services becomes impossible to deliver, the obligation is extinguished proportionally, and the price is reduced accordingly. This position – not fully spelled out in the statutory text – has been developed through judicial reasoning and is broadly followed. It provides a workable outcome for partial delivery scenarios, such as a construction contract where one component of a project is blocked by a regulatory action affecting only a specific site.
The hardship adjustment mechanism. The hardship doctrine in practice has a high bar. Courts in the onshore system treat the statutory hardship provision as an exceptional remedy, not a general escape route from unfavourable commercial outcomes. The supervening event must be genuinely exceptional – extraordinary in the sense that it was entirely outside the contemplation of the parties at the time of contracting. Economic downturns, even severe ones, are not automatically classified as exceptional events if they occur in sectors known for volatility. A party operating in the oil and gas services sector, for example. May find it difficult to argue that a sharp fall in hydrocarbon prices is an unforeseeable supervening event, given the well-known cyclicality of that market.
Where the hardship doctrine does succeed, the court's adjustment is prospective. It applies to future instalments or future performance obligations. Courts are reluctant to retroactively revise payments already made. This creates a tactical consideration for claimants: initiating proceedings promptly after the disruption event is critical, because delay may limit the economic value of any judicial adjustment awarded. A party that continues performing under an onerous contract for many months before filing a statement of claim (the pleading document initiating civil court proceedings) risks losing the bulk of its financial exposure to the hardship it seeks to cure.
For DIFC Courts litigation, the analytical path is different. The DIFC Courts apply their own Contract Law, and force majeure clauses are interpreted strictly in accordance with their contractual language. Courts give close attention to whether the clause specifies a list of triggering events or uses an open-ended definition. Clauses that list specific events (pandemics, war, government action) are typically interpreted ejusdem generis – unlisted events must be of the same general character as those listed. Broad clauses ("any event beyond reasonable control") are more likely to extend to novel disruptions, but they attract heightened scrutiny of whether the party took reasonable steps to mitigate.
The Abu Dhabi Global Market Courts (the ADGM's primary commercial court) follows similar principles, drawing heavily on English Court of Appeal and Supreme Court reasoning on frustration and force majeure. A party seeking to rely on force majeure before the ADGM Courts must provide commercial, documentary evidence – not merely assert that performance became difficult. The courts expect to see contemporaneous records: communications with suppliers, procurement attempts, regulatory correspondence, financial impact analyses. A well-maintained file built during the disruption event is often the difference between a successful and a failed force majeure claim.
For clients navigating disputes across these forums, the corporate disputes practice in the UAE provides structured guidance on forum selection and claim strategy from the outset of a disruption event.
Procedural mechanics: from notice to judgment enforcement
Understanding the procedural steps is as important as understanding the substantive doctrine. A client that has a strong substantive case can still lose on procedural grounds.
Under onshore UAE civil procedure rules, a party seeking to rely on force majeure typically has two routes. The first is to notify the counterparty in writing, citing the force majeure event, and to suspend or cease performance. The second is to file a claim before the competent court. The onshore civil procedure system requires the claimant to file through the court's electronic portal. Pay a court filing fee calculated as a proportion of the claim value. Additionally, serve the statement of claim on the defendant. The matter is then assigned to a circuit judge, and a mandatory conciliation stage applies in most commercial disputes before full merits hearings commence.
Interim relief is available in onshore UAE courts, including interim injunction orders to freeze performance obligations or preserve assets pending resolution of a force majeure dispute. Obtaining interim relief requires satisfying the court of urgency and risk of irreparable harm. In practice, courts are cautious about granting interim orders that effectively suspend a long-term commercial contract before the force majeure question is decided on the merits. The threshold for interim relief is higher in the onshore system than in the DIFC Courts.
At the DIFC Courts, interim injunctions are available on standard grounds drawn from English law. The court may grant injunctive relief on an urgent application, with or without notice to the opposing party in extreme cases. DIFC Courts procedural rules are detailed, and parties must comply with tight time limits for filing, service, and evidence exchange. A party seeking to assert or resist force majeure at the DIFC Courts should treat the preparation of its evidential file as a priority task from the moment a disruption event occurs.
Judgment enforcement is a distinct stage. An onshore UAE court judgment requires enforcement through the Ministry of Economy-regulated judicial enforcement system or, in some cases, the relevant emirate's execution court. Where assets are held within a free zone, enforcement may require a separate application to the relevant Free Zone Authority. DIFC Courts judgments benefit from a reciprocal enforcement regime with various DIFC-adjacent jurisdictions and, through the DIFC Courts' "conduit jurisdiction" mechanism, can in many cases be enforced in the Dubai onshore courts.
A party that obtains a favorable force majeure ruling. whether a declaration of excused performance or a hardship adjustment of the contract price – must then enforce the judgment or order through the appropriate mechanism. Practitioners consistently observe that enforcement, not the substantive ruling, is where international clients lose time and money. Anticipating the enforcement stage when selecting forum and governing law is a structural element of any well-designed dispute strategy.
To explore how litigation and arbitration strategies interact in the UAE context, the litigation and arbitration practice in the UAE provides a full overview of available dispute resolution pathways.
To discuss how force majeure or hardship provisions apply to your contract situation in the UAE, contact us at info@ferrazwhitmore.com.
Cross-border implications for Asia and Middle East clients
A significant share of UAE-governed contracts are entered into by parties whose primary operations are in Asia – particularly Singapore, China, India, and Japan. These clients often operate in sectors where supply chain disruption is endemic: electronics, pharmaceuticals, construction materials, and energy. The doctrinal differences between UAE force majeure law and the regimes of their home jurisdictions create predictable friction points.
Under Singapore contract law, force majeure is almost entirely contractual, and the doctrine of frustration fills the gap where no force majeure clause exists. The Singapore Court of Appeal has maintained a restrictive approach to frustration, requiring a radical change in the obligation – not merely increased difficulty or expense. This parallels the UAE onshore position on force majeure, but with an important difference: Singapore law does not have a statutory hardship adjustment mechanism equivalent to the onshore UAE doctrine. A Singapore-based party to a UAE-governed contract gains access to the hardship adjustment doctrine by virtue of the governing law choice, even if it would have no equivalent relief at home. This is a material advantage that is frequently overlooked in contract negotiation.
Chinese contractual practice under Chinese commercial legislation recognises force majeure in statutory terms with conditions broadly similar to those in UAE civil legislation. However, Chinese courts have a wider acceptance of government policy changes and administrative actions as force majeure triggers than UAE courts typically apply. A Chinese counterparty that relied on government-issued force majeure certificates during a public health emergency may find that those certificates carry limited weight before Dubai Courts or the DIFC Courts. This assess impossibility by reference to the specific contract and the specific party's circumstances, not general government attestations.
Indian parties operating in the UAE market frequently encounter a mismatch between the common law doctrine of frustration (which terminates contracts) and the UAE hardship doctrine (which adjusts them). The preference in Indian commercial culture for relationship preservation over termination aligns well with the UAE hardship doctrine, but practitioners must advise clients that the hardship mechanism requires them to initiate judicial proceedings proactively. Waiting for the counterparty to act, or relying on informal renegotiation, does not preserve the right to seek a judicial adjustment – and the window for retrospective adjustment may narrow rapidly as time passes.
Japanese and South Korean counterparties tend to structure UAE-related supply and construction agreements with detailed force majeure clauses specifying notification periods (typically 14 to 30 days from the occurrence of the event). Evidence requirements, and consequences for delayed notification. UAE courts – both onshore and DIFC – treat failure to comply with contractual notification provisions seriously. A party that fails to send written notice within the contractually specified period may be held to have waived its right to invoke force majeure, even where the underlying event would otherwise have qualified. This is a point where the common law and civil law systems converge: notification compliance is treated as a substantive condition, not a mere formality.
The DED (Department of Economic Development) and the relevant Free Zone Authority are administrative bodies that interact with commercial disputes when a party's trading licence, regulatory status, or operational permit is involved. In supply chain disruption scenarios involving licensed traders or regulated service providers. Regulatory actions by the DED or a Free Zone Authority can themselves constitute force majeure triggers if they result in the suspension of the licence necessary for performance. This is a fact-specific determination, but the analytical framework is: has the regulatory action made performance legally impossible, or has it simply imposed new conditions that increase the cost of compliance? If the latter, the hardship doctrine is the more appropriate analytical vehicle.
For clients whose disputes span UAE and Singapore law. a common pattern in trade finance and commodities. an understanding of how the two regimes interact is addressed in the comparative analysis on force majeure and hardship under Singapore law.
Strategic recommendations and the regulatory outlook
The analysis above points to several concrete actions that businesses can take before and during a disruption event. This section sets out those steps in strategic terms, followed by observations on the regulatory direction of UAE commercial law.
Before disruption occurs. Contract drafting is the primary risk management tool. A force majeure clause that merely recites standard language. "events beyond reasonable control". provides limited protection in UAE proceedings because it does not specify the triggering conditions. The notification procedure. Alternatively, the consequences of sustained impossibility. A well-drafted clause should: identify specific categories of qualifying events relevant to the parties' sector. set a clear notification timeline and specify the form and content of the required notice. address partial impossibility separately from total impossibility. establish a maximum duration of suspension before either party may terminate. and specify the governing law and dispute forum explicitly.
Where the parties are operating under onshore UAE law, the drafter should consider whether to include a contractual hardship clause that supplements the statutory doctrine. A contractual hardship provision can set more precise thresholds, specify a mandatory renegotiation period, and establish a formula for adjustment rather than leaving the outcome to judicial discretion. The DIFC Courts and ADGM courts enforce such contractual provisions consistently, and the onshore courts. while they retain inherent authority under the statutory hardship doctrine. will generally respect a well-drafted contractual allocation of hardship risk.
At the moment of disruption. The priority is documentation. From the day a potential force majeure or hardship event occurs, the affected party should begin building an evidential file: internal communications identifying the event and its operational impact. correspondence with suppliers. Regulators. Additionally, counterparties. financial records quantifying the cost increase or loss of revenue attributable to the event. and any regulatory correspondence from the DED, a Free Zone Authority, or government body. This file will form the evidentiary backbone of any subsequent court filing or arbitration submission.
The second priority is notification. If the contract specifies a notification period, that period must be treated as a hard deadline. Missing it risks waiver. If no contractual notification requirement exists, written notice should still be sent promptly – within days of the event, not weeks. The notice should describe the event, its effect on performance, the steps taken to mitigate, and the expected duration. Vague or delayed notices invite the counterparty to argue that the event was manageable or that the notifying party failed to mitigate.
The third priority is legal assessment. The affected party should obtain a rapid legal analysis of whether the event satisfies the threshold conditions under the applicable law. onshore UAE law. DIFC Contract Law. Alternatively, ADGM contract principles. and what the available remedies are. This assessment should include an analysis of the counterparty's likely position and the forum and procedure for any resulting dispute. Early legal involvement consistently produces better outcomes than reactive instruction after the dispute has escalated.
If negotiations fail. Where informal renegotiation does not produce an agreed variation, the choice of forum becomes critical. For disputes involving parties with assets in the DIFC free zone, or where the contract specifies DIFC Courts jurisdiction, the DIFC procedural system provides structured interim relief options and a predictable timeline. For onshore disputes, the conciliation stage provides a structured opportunity for settlement before full litigation commences. Arbitration – whether under ICC, DIAC. Alternatively, LCIA rules – provides confidentiality and enforceability advantages. Particularly where one party's assets are located outside the UAE and enforcement of a local court judgment would require additional steps.
The regulatory outlook. UAE commercial legislation has undergone significant amendment in recent years, with reforms aimed at aligning the onshore commercial system more closely with international standards. Practitioners and legal commentators observe that UAE courts have become more sophisticated in their analysis of complex commercial contracts. Additionally. That younger generations of judges. many with exposure to international commercial arbitration practice. are applying force majeure and hardship doctrines with greater nuance than was common a decade ago. The trend is toward a more contextual analysis that weighs the commercial context of the contract alongside the statutory text, rather than applying the formal impossibility test mechanically.
At the DIFC Courts and ADGM Courts, the trajectory is toward further alignment with English commercial law developments, including the post-pandemic judicial analysis of force majeure clauses by the English courts. The DIFC Courts have demonstrated willingness to engage with English Court of Appeal reasoning on a persuasive basis. This means that developments in English commercial law. particularly the increasingly detailed analysis of "reasonable steps to overcome" and "proximate causation" in force majeure disputes. are likely to influence DIFC Courts outcomes in the coming years.
For businesses with long-term commitments in the UAE market, monitoring both the legislative reform trajectory and the developing court practice is a structural compliance task, not a one-time exercise.
For a tailored strategy on force majeure and hardship contract disputes in the UAE, reach out to info@ferrazwhitmore.com.
Self-assessment checklist before invoking force majeure or hardship in the UAE
The following conditions should be verified before a party formally invokes force majeure or hardship under UAE law. This checklist applies to both onshore and DIFC/ADGM-governed contracts, with noted differences.
- External event: the disruption originates entirely outside your organisation and the specific contract – not from internal operational failures, financing difficulties, or commercial miscalculation.
- Unpredictability: the event was not reasonably foreseeable at the date of contract signature. Sector-specific cyclical risks (price volatility, regulatory change in heavily regulated industries) are generally not treated as unforeseeable.
- Impossibility or exceptional burden: for force majeure, performance must be legally or physically impossible – not merely more expensive. For hardship (onshore only), performance must be so disproportionately burdensome that enforcement would be inequitable.
- Mitigation steps documented: the party must have taken and documented all reasonable steps to overcome or work around the disruption. Courts – both onshore and DIFC – will examine the mitigation record closely.
- Notice sent within contractual deadline: written notice must comply with the contractual notification clause. If no clause exists, notice should have been sent promptly after the event was identified.
- Correct forum identified: the applicable governing law (onshore UAE, DIFC, or ADGM) determines which doctrines are available. The procedural rules for filing a statement of claim, seeking an interim injunction, and enforcing a judgment differ materially across these systems.
If these conditions are not all satisfied, the more appropriate strategic path may be to seek a negotiated contractual variation, consider mediation under UAE mediation rules. Alternatively. Review whether a restructuring of the commercial relationship. rather than a formal legal claim. better serves the client's interests.
Frequently asked questions
Q: Does a UAE force majeure clause automatically excuse non-performance, or does a court need to confirm it?
A: Under onshore UAE law, a party may suspend performance and notify the counterparty of a force majeure event without first obtaining a court order. However, if the counterparty disputes the claim – which is common – the question of whether the conditions for force majeure are met will be decided by the competent court or arbitral tribunal. For DIFC and ADGM-governed contracts, the same principle applies: the party bears the burden of establishing that all conditions in the clause are satisfied. A court declaration is not required to invoke force majeure, but it may be necessary to defend against claims for breach of contract or damages.
Q: How long does a UAE court typically take to resolve a force majeure or hardship dispute?
A: Onshore Dubai Court proceedings in commercial disputes typically take between 12 and 24 months from filing the statement of claim to a first-instance judgment. With additional time for appeals to the Court of Appeal and Court of Cassation. DIFC Courts proceedings are generally faster for straightforward cases, with timelines of 9 to 18 months common in contested commercial matters. Arbitration under DIAC or ICC rules in the UAE can produce awards within 12 to 18 months, depending on the complexity of the dispute and the availability of the tribunal. Engaging a lawyer in UAE proceedings early – before the dispute is formally filed – can significantly reduce the overall timeline by narrowing the issues in dispute and facilitating early settlement.
Q: Is it a misconception that force majeure and hardship are the same thing under UAE law?
A: Yes – this is one of the most common misconceptions among international clients operating in the UAE. Force majeure applies when performance is impossible and extinguishes the obligation entirely. Hardship applies when performance is possible but disproportionately onerous, and the remedy is judicial adjustment of the contract terms – not termination. A party that seeks termination on hardship grounds alone is likely to fail before an onshore UAE court. The correct approach is to identify which doctrine applies to the specific situation and to tailor the claim accordingly. Working with a law firm in UAE proceedings that understands both regimes is essential to selecting the right legal vehicle from the outset.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our commercial litigation and dispute resolution practice covers force majeure and hardship disputes across UAE onshore courts. The DIFC Courts. Additionally, the ADGM Courts, as well as international arbitration proceedings under ICC, DIAC, and LCIA rules. We combine Portuguese civil law expertise – directly relevant to UAE onshore contract doctrine, which shares civil law origins – with English common law tradition, which underpins the DIFC and ADGM legal systems. This dual-tradition positioning allows us to advise clients on both regimes without switching counsel mid-dispute. Our attorneys have advised on force majeure and hardship matters across the Asia-Pacific, Middle East, and European markets, supporting clients in sectors including energy, construction, trade finance, and technology. As an international law firm with deep knowledge of UAE commercial law, Ferraz & Whitmore advises international entrepreneurs, institutional investors, and in-house legal teams seeking results-oriented counsel across multiple legal systems. To discuss your specific situation in the UAE, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.