Force Majeure!

What to Know

• GCC force majeure clauses can determine whether regional conflict disrupts project revenues.
• Relief depends on contract language, political risk definitions and notice compliance.
• Missing force majeure notice deadlines can eliminate valuable contractual protections.

The escalation of hostilities between the United States, Israel and Iran, drawing in the wider Gulf region and placing the Strait of Hormuz under threat of closure, has prompted every developer with exposure to Gulf Cooperation Council infrastructure to do precisely what their predecessors did during the COVID-19 pandemic – reach for the force majeure clause in their concession agreements. The reflex is entirely understandable. The difficulty, as the pandemic made painfully clear, is that the devil is very much in the detail, the relief available being peculiarly specific to the contractual terms each project negotiated, differing materially from one jurisdiction to the next and from one procurer to