Ankita Dhawan, Founder of Consilium Advisors, explains how force majeure clauses in the UAE are evolving from standard contractual provisions into critical legal safeguards amid geopolitical and supply chain disruptions. With courts demanding stricter proof of impossibility and businesses reworking contracts to address emerging risks, companies are also strengthening resilience, restructuring strategies, and adopting proactive compliance to navigate an increasingly complex regulatory landscape.

How are force majeure clauses evolving in the UAE?
Force majeure clauses are being invoked across the region to protect against liability for non-performance due to an event that is external, unforeseeable, and unavoidable, such that performance becomes impossible. This is significant, because it moves force majeure from contractual boilerplate to live litigation risk. Notably, in the UAE, it isn’t just a contractual provision, but codified in law and even preserved under the new Civil Transactions Law (which comes into force on 1 June 2026).

From a global litgation lens, COVID related precedents are instructive. Courts around the world have grown increasingly sceptical and they now demand a surgical, direct causal link between the event and the failure to perform. Mere difficulty is not impossibility. It will be interesting how UAE courts interpret the difficulty vs impossibility “debate” in the light of recent events.

We are also seeing a strategic shift in the drafting of agreements. New clauses are being aggressively added — and existing ones amended — to move beyond traditional “acts of God” language to explicitly include acts of war, geopolitical conflict, and cyber-warfare.

Are commercial disputes and restructurings on the rise?
Globally, the full economic effects of the geopolitical tensions will only now begin to materialise, as the last containers that freely transited the Strait of Hormuz before the conflict and were at sea reach their destinations. The IEA has characterised this as the largest supply disruption in the history of the global oil market.

In the immediate term, strictly from the lens of the UAE, it is crucial to note that it has meaningful structural buffers: a diversified GDP, deep fiscal reserves, strong defenses and the institutional weight of DIFC and ADGM, that provide insulation against systemic distress. In the medium term, from the lens of the global economy, as companies absorb these cascading economic shocks, consolidation, restructuring, and dealmaking are expected to rise.

It will be interesting to see how regulators globally engage with the “failing firm” defence, where competitors seek regulatory approval for combinations on the basis that one party would exit the market regardless, arguing the combination preserves rather than eliminates competition.

How can companies strengthen resilience amid economic uncertainty?
Resilience is increasingly a policy and regulatory problem, not just an operational one. The companies best positioned through this period will be those that treat it that way. On the commercial side, the immediate priority is contract hygiene: not just reviewing force majeure, but also termination clauses, notice obligations, and insurance coverage gaps, particularly war-risk exposure.

Business continuity planning is equally critical: what happens if a key Tier-1 vendor goes dark, a correspondent banking relationship is suspended, or data access is disrupted? The question is not whether to have a plan, but whether it is current, tested, and stress-mapped against scenarios now visible in the operating environment — airspace closure, port suspension, undersea cable damage, data centre outage.

On the regulatory side, the single most valuable thing a business can do right now is engage regulators before they need to. The cost of proactive engagement is always lower than the cost of reactive remediation.

How can businesses stay compliant in an increasingly complex regulatory landscape?
Three principles apply. First, maintain active regulatory relationships, not passive monitoring. Second, build scenario-specific compliance triggers into governance frameworks, so that a defined external event, an airspace closure, a sanctions designation, a declared emergency, automatically activates a predetermined compliance response rather than requiring ad hoc escalation. Third, invest in regulatory and policy horizon-scanning that anticipates obligations rather than discovers them at enforcement.