While macroeconomic fundamentals remain strong, with continued fiscal stability and a projected 2026 federal budget of AED 92.4 billion, businesses are increasingly reassessing legal risk in a more practical and operational way. According to Jayshree Gupta, Founding Partner at The Inhouse Co, this shift reflects a move toward proactive risk management, where issues such as logistics delays, payment defaults and regulatory exposure are addressed early using the UAE’s robust legal framework.

How are force majeure clauses evolving in the UAE?
Force majeure in the UAE is becoming more specific, more commercial and more scrutinised. One of the clearest effects of regional instability is the renewed importance of force majeure. In the past, many contracts used broad wording that looked reassuring but were rarely tested. Today, that approach is becoming harder to justify. Businesses are realising that a generic reference to events beyond a party’s control may not be enough where the actual disruption involves a delay at ports, route closure, sanctions concern, cyber incident, or war-risk surge that affects performance but does not make it literally impossible.

For example, where goods are delayed due to disruption of key shipping routes, a generic clause may lead to disputes over responsibility and mitigation. A more precise clause addressing route disruption, cost escalation and alternative sourcing provides clarity on whether the consequence is additional time, cost adjustment or termination rights. In today’s environment, that level of precision is no longer excessive; it is commercial common sense.

More UAE contracts are likely to combine classic force majeure wording with price adjustment clauses, renegotiation obligations and escalation procedures before termination. These clauses must reflect how the business operates. The lesson is simple: force majeure should no longer be drafted as an afterthought that sits at the end of a contract (I call it the fatigue of contract pages). It should be drafted by consulting the commercial team and a legal expert both, who both understand the actual supply chain and the actual business model.

Are commercial disputes and restructurings on the rise?
Commercial disputes and restructurings are rising, but the real issue is complexity. There is strong reason to expect a continued increase in commercial disputes and restructuring activity in the UAE. DIAC’s 2024 Annual Report recorded a sharp increase in aggregate amounts in dispute to AED 9.7 billion, with construction continuing to account for the largest share of new cases. That is significant not only because of the headline number, but because it reflects how quickly commercial strain can move into formal proceedings when payment pressure, project delay and governance issues start overlapping.

A delayed project may lead to a payment default, which then creates subcontractor claims, banking stress, employment issues and ultimately restructuring discussions. Similarly, internal disputes can also lead to operational and financial disruption if not addressed early. In other words, businesses should not think only in terms of a dispute or a restructuring.

For example, a contractor facing delays, rising costs and slow payments may quickly move from a contractual dispute to a cashflow issue. The response may not be limited to filing a claim, but should include preserving records, managing creditors, protecting key contracts and considering early settlement or restructuring.

Boards will need to adopt a more disciplined pre-distress mindset. That includes quarterly review of receivables, covenant pressure points, delegation of authority, related-party exposures and dispute settlement thresholds. Businesses that treat disputes as purely legal events usually react too late. We as legal experts, have a higher chance of resolving matters when boards reach out when they start to see the signs. Businesses that treat them as early financial and governance signals are more likely to retain control of the outcome.

What legal risks are emerging from ongoing supply chain disruptions?
Supply chain disruption is creating contractual, regulatory and insurance exposure all at once. If there is one issue that captures the commercial impact of regional tensions most clearly, it is supply chain disruption. Reuters reported in March 2026 that Gulf importers were racing to reroute supply chains after disruption linked to Hormuz; demand for other transport was increasing, congestion was developing at smaller ports, and rerouting was adding to costs. Those developments show both sides of the UAE story: real disruption, but also rapid adaptation.

For UAE businesses, the legal risks go beyond delivery delays. These include liability for late performance, price risk under fixed contracts, quality issues from substitutes, sanctions and counterparty exposure, and insurance gaps where policies may not respond as expected. For example, a UAE food importer facing rerouted shipments may deal with higher costs, delays and late inventory, leading to customer claims, margin loss, payroll pressure and lender concerns. Without proper documentation, it may also struggle to prove mitigation to insurers or counterparties.

This is exactly why supply-chain legal review is now a board issue, not just a procurement issue. Contracts must be more precise, with provisions for route changes, pricing and sourcing. Businesses should also identify single points of failure, as resilience depends on knowing where the chain may break.

How can companies strengthen resilience amid economic uncertainty?
Economic uncertainty means resilience must be built into governance, not only into contracts. Regional tension does not affect every sector equally. Some sectors, such as crypto-adjacent services and advisory work, may prove more resilient than hospitality, project-based industries or import-heavy businesses. Businesses have become more cautious with costs; settlement appetite may fall, credit cycles may lengthen, and counterparties increasingly ask for flexibility without always accepting corresponding legal risk. That is where governance matters.

A resilient company is always aware of the situation and knows which contracts are critical. It will have a live internal register showing notice dates, renewal windows, termination rights and governing law. It will have clear signatory and approval limits. It can quickly identify which matters should be settled, which should be escalated, and which need restructuring rather than confrontation. It also has a communications plan, because in a tense market, delays in internal decision-making often cause more damage than the original external shock.

For example, a company facing a revenue dip may react by freezing payments and halting projects. A more resilient approach is to review contracts, prioritise payments, communicate the plan, ensure compliance and structure settlements. The first approach creates disputes; the second reduces them. The future possibility is that more UAE businesses will formalise resilience planning as part of legal and board governance. That may include scenario planning, contract refresh programs, authority mapping, cyber and sanctions response templates, and real-time monitoring of counterparties under stress.

What UAE employment law changes are impacting workforce strategies?
UAE employment law is increasingly important to workforce strategy, and it protects employees in real and practical ways Workforce strategy is often under immediate pressure during uncertainty, but the UAE framework remains structured and protective. Under Federal Decree-Law No. 33 of 2021 and MOHRE requirements, employment contract changes must follow a formal process with employee consent and cannot be treated as unilateral decisions.

Businesses may seek to cut costs through salary reductions or unpaid leave, but under UAE law this cannot be done unilaterally. MOHRE has made it clear that such changes require employee agreement and proper documentation through the prescribed process, failing which employers risk non-compliance.

For example, where a company faces short-term cash pressure, it cannot simply impose salary cuts or forced leave. Any proposed changes must be agreed with employees, properly documented and implemented through the correct process, failing which a commercial issue may turn into employment complaints and regulatory risk.

How can businesses stay compliant in an increasingly complex regulatory landscape?
Compliance is becoming denser and businesses can no longer afford poor risk management. Even during geopolitical tension, serious legal exposure often arises from accumulated compliance failures. The UAE’s regulatory framework is becoming broader and more interconnected, with updated AML regulations carrying significant administrative and criminal penalties. In practice, businesses can no longer manage legal risk in isolation. For example, crypto or cross-border payment businesses may face increased scrutiny not just due to their sector, but because regulators, banks and counterparties expect stronger evidence of internal controls. This evolving framework enhances market credibility and rewards transparent operations.

Going forward, the focus is on evidenced compliance rather than policy-only compliance. Regulators and counterparties increasingly expect a clear audit trail on who approved decisions, what was amended, whether proper authority existed, and if filings were made on time. Businesses with an integrated compliance structure across legal, finance, HR and operations will be far better positioned than those operating through disconnected systems.