Arbitration Force Majeure Claims in UAE: Covid-19 and Beyond

By Nour Attorneys / 26 July 2025

Arbitration Force Majeure Claims in UAE: Covid-19 and Beyond

The onset of the COVID-19 pandemic has radically transformed the landscape of contractual obligations and dispute resolution in the United Arab Emirates (UAE). One of the most significant legal constructs tested during this period has been the force majeure doctrine, particularly within the context of arbitration. In the face of unexpected and disruptive events such as the pandemic, parties engaged in commercial contracts have increasingly sought to deploy force majeure claims to neutralize their liability for non-performance or delayed performance. For arbitrators and legal practitioners, understanding the structural underpinnings and asymmetric implications of force majeure claims in UAE arbitration is crucial to effectively engineer dispute resolution strategies.

This article seeks to architect a comprehensive analysis of arbitration force majeure claims in the UAE with a keen focus on the COVID-19 pandemic and its aftermath. We will dissect the relevant provisions under the UAE Civil Code, the role of contractual force majeure clauses, and the emerging legal discourse surrounding the hardship doctrine. Furthermore, this article will examine strategic approaches to asserting and defending force majeure claims in arbitration, highlighting the adversarial nature of such claims and the vital role of carefully crafted contractual language. By deploying a detailed legal framework and practical insights, this discussion aims to equip stakeholders with the necessary tools to navigate the complexities of force majeure in UAE arbitration effectively.

Within the broader scope of dispute resolution, arbitration remains a favored mechanism for resolving commercial disputes in the UAE, given its neutrality, flexibility, and enforceability. As businesses continue to grapple with the asymmetric effects of global disruptions, the invocation of force majeure claims in arbitration proceedings has surged, necessitating a deeper understanding of how UAE law and arbitral tribunals interpret and apply these claims. Nour Attorneys, with extensive experience in international arbitration and commercial litigation, is ideally positioned to engineer rigorous legal strategies that address these challenges. Through this article, we aim to provide an authoritative reference for practitioners, clients, and arbitrators engaging with force majeure issues in the evolving UAE legal landscape.

UAE LEGAL FRAMEWORK FOR FORCE MAJEURE IN ARBITRATION

The legal architecture governing force majeure claims in the UAE is primarily rooted in the UAE Civil Code (Federal Law No. 5 of 1985), which articulates the foundational principles relating to contracts and obligations. Article 273 of the Civil Code defines force majeure as an external, uncontrollable, and unavoidable event that renders a debtor unable to fulfill their contractual obligations. This provision serves as the backbone for force majeure claims in both judicial and arbitral settings, providing a structural framework within which parties can engineer their claims.

In arbitration, the application of UAE Civil Code provisions is often supplemented or modified by the contractual force majeure clauses agreed upon by parties. These clauses typically delineate the scope, notice requirements, and consequences of invoking force majeure, thereby allowing the parties to architect tailored risk allocation mechanisms. It is common for contracts governed by UAE law to include detailed force majeure clauses that may extend beyond the statutory definition, capturing events such as pandemics, government actions, and supply chain disruptions.

The COVID-19 pandemic has tested these legal constructs, exposing asymmetries in how force majeure claims are interpreted and enforced. The pandemic’s global reach and prolonged impact raise questions about the duration and extent of force majeure events, as well as the interplay between force majeure and hardship doctrines. Importantly, UAE courts and arbitral tribunals have had to navigate the adversarial dynamics between parties asserting force majeure to escape liability and those seeking to enforce contractual performance despite disruptions. In this context, the deployment of expert evidence and contractual interpretation plays a pivotal role in neutralizing spurious claims and upholding contractual stability.

The enforceability of force majeure claims in UAE arbitration is also influenced by the governing arbitration rules and the chosen arbitral seat. For instance, when arbitration is seated in the UAE, the Federal Arbitration Law (Federal Law No. 6 of 2018) provides procedural guidance but defers substantive contract law matters to the applicable law chosen by the parties, often UAE law. This duality requires arbitrators to skillfully engineer their analysis, balancing procedural neutrality with substantive legal principles. Moreover, parties may agree on institutional rules such as those of the Dubai International Arbitration Centre (DIAC) or the International Chamber of Commerce (ICC), which may include specific provisions impacting the treatment of force majeure claims.

CONTRACTUAL FORCE MAJEURE CLAUSES AND THE IMPACT OF COVID-19

Contractual clauses governing force majeure are the principal instruments through which parties engineer their risk management strategies. In the UAE, these clauses often form the structural basis for arbitration force majeure claims, as parties tailor the language to address specific contingencies. The drafting of such clauses is a critical exercise in anticipating asymmetric risks and adversarial disputes, especially in light of unprecedented events like COVID-19.

Typically, force majeure clauses enumerate specific events considered force majeure, such as natural disasters, wars, strikes, and governmental acts. Post-COVID-19, many contracts have been amended or newly drafted to explicitly include pandemics, epidemics, and related governmental restrictions, reflecting an evolving recognition of the pandemic’s disruptive potential. The specificity of these clauses directly impacts the strength of a claim; vague or overly broad clauses may be subject to restrictive interpretation by arbitral tribunals or courts.

The COVID-19 pandemic has brought into sharp focus the importance of procedural requirements embedded in force majeure clauses, such as notice obligations and mitigation duties. Many contracts require the affected party to notify the counterparty of the force majeure event promptly and to take reasonable steps to mitigate the impact. Failure to comply with these procedural elements can result in the neutralization of a force majeure claim, even if the event itself qualifies as force majeure under the clause or the Civil Code.

The asymmetric consequences of enforcing force majeure clauses manifest acutely in arbitration, where parties often adopt adversarial stances, seeking to engineer favorable outcomes through the interpretation of contractual language and factual presentation. For instance, suppliers may claim force majeure to avoid liability for delayed deliveries, while purchasers may challenge the invocation to enforce contractual performance or claim damages. Such disputes require arbitrators to carefully architect their analysis, considering the wording of the clause, the factual matrix, and the broader legal context.

In addition to clause wording, the pandemic has triggered renewed interest in the hardship doctrine, which addresses situations where performance, while not impossible, has become excessively onerous. Although hardship is not explicitly codified in UAE law, its recognition in arbitration has become a structural component of dispute resolution strategies post-COVID-19. Parties often seek to deploy hardship claims in conjunction with or as alternatives to force majeure, further complicating arbitration proceedings.

THE HARDSHIP DOCTRINE AND ITS APPLICATION IN UAE ARBITRATION

The doctrine of hardship occupies a critical place in the discussion of contractual non-performance in the UAE, particularly as parties grapple with the long-term economic impacts of COVID-19. Unlike force majeure, which generally requires impossibility of performance, hardship involves a substantial and unforeseen change in circumstances that renders performance excessively burdensome but not impossible.

Although the UAE Civil Code does not explicitly provide for hardship, UAE arbitral tribunals frequently engineer solutions based on principles of good faith and equity, often referencing international instruments such as the UNIDROIT Principles of International Commercial Contracts. These principles enable arbitrators to adapt contracts to re-balance obligations or, in exceptional cases, to terminate contracts. The adversarial nature of arbitration means that hardship claims often provoke asymmetric responses, with one party seeking renegotiation or relief and the other resisting, emphasizing contractual sanctity.

The impact of COVID-19 has elevated hardship claims as a strategic alternative or supplement to force majeure claims. Where parties cannot demonstrate impossibility due to government exemptions or partial operational capacities, they may assert that the pandemic has caused an excessive increase in costs or other structural impediments to performance. Arbitrators must carefully engineer their assessments to distinguish between genuine hardship and mere economic difficulties, ensuring that relief is granted only where justified.

The acceptance of hardship claims also depends heavily on contractual language. Clauses that expressly provide for hardship or price adjustment mechanisms enable arbitrators to deploy equitable remedies more readily. In the absence of such clauses, arbitrators rely on general principles of contract law and the factual circumstances. This reliance on equitable principles introduces a degree of unpredictability, requiring sophisticated legal advocacy and strategic planning to navigate the adversarial environment effectively.

UAE arbitration practice post-COVID-19 also reveals an increasing trend towards combining force majeure and hardship claims, requiring arbitrators to architect their rulings with nuanced differentiation. The structural interplay between these doctrines necessitates a thorough factual investigation and legal analysis to neutralize unfounded claims and maintain contractual balance. Given the complexity and potential for asymmetric outcomes, parties are advised to carefully engineer their contractual provisions and dispute resolution clauses to address both doctrines comprehensively.

STRATEGIC APPROACHES TO ASSERTING AND DEFENDING FORCE MAJEURE CLAIMS IN ARBITRATION

Effectively deploying a force majeure claim in UAE arbitration requires a strategic and well-engineered approach that anticipates adversarial challenges and structural legal requirements. Parties must architect their claims on a rigorous factual and legal foundation, ensuring compliance with both statutory and contractual conditions. Key to this strategy is the meticulous documentation of the force majeure event, its impact on contractual performance, and the steps taken to mitigate damages.

From the claimant’s perspective, demonstrating that the event qualifies as force majeure under the applicable UAE Civil Code and the contractual clause is paramount. This includes establishing that the event was external, unforeseeable, and beyond the party’s control. It is essential to engineer a clear causal link between the force majeure event and the non-performance or delay. Additionally, adherence to procedural requirements such as timely notice is crucial to maintain the integrity of the claim.

Respondents, on the other hand, often seek to neutralize force majeure claims by challenging the existence or impact of the event, the claimant’s compliance with notice provisions, or the availability of alternative performance options. They may also argue that the event does not render performance impossible but merely more difficult or costly, invoking the asymmetric distinction between force majeure and hardship. Engineering a comprehensive defense involves detailed factual investigation and contractual interpretation to expose weaknesses in the claimant’s position.

Arbitrators play a central role in balancing these adversarial contentions. They must deploy a structured analytical framework that integrates the Civil Code provisions, contractual clauses, and relevant international principles. The interpretation of ambiguous clauses requires a purposive approach, construing the parties’ intentions within the context of the pandemic’s impact. Arbitrators also engineer remedies tailored to the circumstances, ranging from excuse of performance to contract adaptation or termination.

The strategic deployment of force majeure claims also intersects with broader dispute resolution tactics, including settlement negotiations and mediation. Parties may engineer early neutralization of disputes through alternative dispute resolution mechanisms, preserving commercial relationships. However, in cases where arbitration is inevitable, a deep understanding of the structural and asymmetric dynamics of force majeure claims is indispensable.

For businesses operating in the UAE, engaging expert legal counsel with comprehensive experience in international arbitration and commercial litigation is critical to architecting effective strategies. Nour Attorneys offers specialized arbitration services and international arbitration expertise to navigate complex force majeure claims. Our team engineers tailored legal solutions that address contract drafting, dispute resolution, and litigation risks, helping clients maintain resilience in adversarial settings.

CONCLUSION

The COVID-19 pandemic has fundamentally reshaped the landscape for arbitration force majeure claims in the UAE, underscoring the need for a sophisticated understanding of both statutory provisions and contractual frameworks. The UAE Civil Code provides a structural foundation for force majeure claims, but the increasing complexity of disputes necessitates careful engineering of contractual clauses and dispute resolution strategies. The interplay between force majeure and the hardship doctrine introduces further layers of legal nuance, requiring parties and arbitrators to deploy nuanced analysis and equitable principles.

In UAE arbitration, the asymmetric and adversarial nature of force majeure claims demands a strategic approach that balances the interests of both parties while safeguarding contractual stability. The ongoing evolution of case law and arbitration practice post-COVID-19 highlights the importance of anticipatory contract drafting and dispute resolution planning. By architecting clear, precise force majeure provisions and preparing for potential disputes, parties can effectively neutralize risks associated with unforeseen global disruptions.

Nour Attorneys stands ready to engineer comprehensive legal strategies that address these challenges across the full spectrum of commercial litigation and arbitration. Our expertise in contract drafting, corporate law, and dispute resolution equips clients to confront force majeure claims with confidence and precision in the UAE context.

Related Services: Explore our Force Majeure Clause Uae and Arbitration Uae Compliance services for practical legal support in this area.

Disclaimer: This article is for informational purposes only and does not constitute legal advice.

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To engineer effective strategies and architect tailored solutions for arbitration force majeure claims in the UAE, contact Nour Attorneys today. Our team of experienced arbitration and commercial litigation lawyers is prepared to deploy comprehensive legal expertise to neutralize contractual risks in adversarial environments. Visit our Dispute Resolution Services page for more information or schedule a consultation.

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