Force Majeure in the UAE: A Practical Guide for Businesses in Dubai
Unexpected disruptions can put business contracts under pressure. Supply chain interruptions, regulatory restrictions and operational challenges may affect delivery schedules and commercial relationships. For businesses operating in Dubai, understanding force majeure helps clarify contractual responsibilities and assess the options available when circumstances change.
Dubai’s Department of Economy and Tourism, Dubai Chambers and Baker McKenzie have developed a practical guide to help businesses navigate these issues under UAE law. Read the guide overview.
What Is Force Majeure?
Force majeure refers to an exceptional event beyond a contracting party’s control that makes contractual performance objectively impossible. An unexpected disruption alone is insufficient.
The assessment focuses on four conditions: whether the event was unforeseeable when the contract was signed, whether its consequences were unavoidable despite reasonable mitigation efforts, whether performance became objectively impossible, and whether the event directly caused that impossibility. Source: Dubai Department of Economy and Tourism.
Does Higher Cost Qualify?
Rising costs, lower profitability and delivery delays do not automatically constitute force majeure. If an alternative shipping route remains available, additional expense or transit time will generally not establish impossibility.
A different concept, hardship, may become relevant where an exceptional, unforeseeable event makes performance excessively burdensome and threatens substantial loss. It does not automatically release a business from its contractual obligations. Source: UAE Force Majeure Guide.
Why the Contract and Applicable Law Matter
Businesses should review the contract’s force majeure clause, particularly its notification deadlines, mitigation requirements and stated consequences. The guide also highlights the importance of assessing payment issues and preserving supporting evidence. Source: Dubai Department of Economy and Tourism.
The UAE’s new Civil Transactions Law, introduced through Federal Decree-Law No. 25 of 2025, entered into force on 1 June 2026. Source: UAE Legislation.
The contract date and governing law therefore require attention. Earlier contracts may remain subject to the previous framework, while contracts governed by DIFC, ADGM or foreign law require a separate assessment. Businesses should also avoid assuming that force majeure cancels existing debts: payment obligations that have already accrued generally remain payable unless the contract provides otherwise. Source: UAE Force Majeure Guide.
Practical Steps When Disruption Occurs
A structured response helps businesses assess their position and manage contractual risk:
Review the governing law and relevant contract clauses.
Identify the obligations affected by the disruption.
Preserve evidence of the event and its impact.
Follow contractual notice procedures.
Explore reasonable ways to reduce the disruption.
Consider renegotiation, mediation and appropriate dispute resolution channels.
These actions form part of the practical approach outlined in Dubai’s official business guidance. Source: Dubai Department of Economy and Tourism.
Before suspending performance or seeking termination, obtain advice tailored to the contract and circumstances. Incorrectly invoking force majeure can create exposure to breach-of-contract claims. Source: UAE Force Majeure Guide.
