Background
The global construction and logistics landscape in 2026 continues to be defined by volatility, shifting from the systemic shocks of the pandemic era to the acute disruptions caused by regional conflicts, particularly in the Middle East. These geopolitical tensions have introduced a complex web of challenges, including shipping diversions, port closures, and fluctuating energy costs, which directly impact the procurement and delivery of long-lead items. For contractors and employers alike, these events serve as a critical test of Force Majeure (FM) provisions within standard and bespoke contract forms.
Key Issues
Under English law, Force Majeure is a contractual creation rather than a statutory right. Consequently, a party’s entitlement to an Extension of Time (EOT) or relief from liquidated damages (LADs) depends entirely on the specific language drafted into the agreement. Current disputes often hinge on the distinction between performance being rendered impossible versus merely more expensive or difficult. In the context of Middle Eastern disruption, practitioners must navigate the intersection of physical impediments and the regulatory overlay of sanctions and export controls, which can fluctuate with minimal notice.
Furthermore, the threshold for relief—whether the event must ‘prevent’, ‘hinder’, or ‘delay’ performance—remains a primary point of contention. While ‘prevent’ implies a physical or legal impossibility, ‘hinder’ may offer a broader scope for relief where performance is significantly impeded. Establishing a clear causal link between the conflict and the specific delay is essential for any successful claim for prolongation costs or relief from performance.
Analysis of Legal Developments
The legal framework surrounding these clauses has matured significantly. The Supreme Court ruling in RTI Ltd v MUR Shipping BV [2024] has redefined how tribunals and courts view the duty to mitigate. The court held that where a contract requires a party to exercise ‘reasonable endeavours’ to overcome a Force Majeure event, this does not typically require the affected party to accept non-contractual performance, such as payment in a different currency, unless the contract explicitly dictates otherwise.
For construction practitioners using FIDIC, JCT, or NEC forms, this reinforces the necessity of precise drafting. In FIDIC 2017 suite contracts, for instance, the definition of an ‘Exceptional Event’ (formerly Force Majeure) requires the event to be beyond a party’s control and one which could not have been reasonably provided against before entering the contract. As conflicts persist, the ‘foreseeability’ of such disruptions becomes a higher hurdle for new contracts signed in 2025 and 2026.
Practical Implications
Parties currently managing active projects must take proactive steps to safeguard their positions. The first priority is to conduct a forensic review of all critical supplier and customer contracts to map out FM triggers, notice periods, and mitigation requirements. Failure to adhere to strict notice provisions is a frequent cause for the dismissal of otherwise valid entitlement claims in international arbitration forums such as the ICC or DIAC.
Project managers should ensure the contemporaneous recording of all evidence, including carrier advisories, port notices, and insurance correspondence. This data is vital for a robust delay analysis, whether utilizing Time Impact Analysis (TIA) or a collapsed as-built methodology, to demonstrate the actual impact on the critical path. Documentation must also reflect all attempts at mitigation, such as exploring alternative shipping routes or substitute suppliers, to satisfy the ‘reasonable endeavours’ standard often found in modern contracts.
Finally, for upcoming tenders, it is no longer sufficient to rely on generic FM definitions. Clauses should be refreshed to include specific triggers for sanctions, export controls, and cyber-disruption. The inclusion of hardship or price review clauses may also be necessary to address the commercial reality of energy price spikes, which FM clauses typically do not cover.
We invite clients and practitioners to contact Equitas Consulting to discuss how these evolving principles impact your current project portfolios or to assist in the quantum and delay analysis of ongoing disruption claims.
