Force Majeure: Preserving Contractor Rights During The Qatar Diplomatic Crisis; What You Need To Know

On 5 and 6 June 2017, the United Arab Emirates (UAE), Kingdom of Saudi Arabia (Saudi), Egypt, Bahrain, Yemen and the Maldives all separately announced that they were severing diplomatic relations with Qatar. In the days that followed, Mauritius, Libya and Mauritania all followed suit. The measures taken by the UAE and Saudi are particularly restrictive with the closure of all land, air and sea routes to or from Qatar, including prohibiting Qatar Airlines from flying in UAE or Saudi airspace. While the legality of the actions taken by UAE and Saudi is far from certain1, for the time being, Qatar appears to intend to comply with the prohibition. As a result, the sudden and comprehensive ban on major transportation routes to and from Qatar will significantly affect the ability of contractors in Qatar to perform their obligations under existing contracts. This article examines one of the key defenses available to a contractor who is unable to perform its contractual obligations—the defense of force majeure.

What is Force Majeure

Force majeure is a legal doctrine that provides relief (a shield) to a party whom is unable to fulfill its contractual obligations due to circumstances beyond that party's control. Force majeure relief may be available either: (1) pursuant to the express terms of a contract; or (2) in some cases, by virtue of the local law applicable in the place of performance of the contract.

Force majeure clauses may contain either an exclusive or inclusive definition of events that would constitute force majeure. An exclusive force majeure clause provides an exhaustive list of events or circumstances that may provide relief to an affected party. An inclusive force majeure clause provides an indicative list of events that may constitute force majeure. Force majeure clauses tend to be interpreted narrowly; that is, only the events listed and events similar to those listed will be covered.

The types of events that will give rise to relief are not codified under Qatari law and are therefore left to the parties to contractually agree. However, the doctrine of force majeure is recognized under Law No. 22 of 2004 (the Qatari Civil Code). Articles 204 and 258 both articulate the concept of force majeure and provide relief to the non-performing party in circumstances where another party's loss can be attributed to an external cause2, or, more in-line with the traditional concept of force majeure, where the non-performance itself is due to an...