Does The Middle East Conflict Trigger Force Majeure In India?

The ongoing geopolitical tensions in the Middle East, particularly the conflict involving Iran, the United States, and Israel, have once again brought the concept of force majeure into sharp focus in commercial and investment contracts. Several Gulf nations, including Qatar, Kuwait, and Bahrain, have reportedly invoked force majeure in relation to oil and gas exports following attacks on refineries, logistical disruptions, and security risks affecting maritime routes. The potential blockade or disruption of the Strait of Hormuz, through which nearly 20% of global oil and LNG shipments pass, has heightened concerns across importing nations, including India.

In this context, an important legal question arises: Does a war or geopolitical conflict in the Middle East automatically trigger force majeure under Indian law, particularly in contracts involving Indian parties?

The answer is not straightforward. Under Indian law, the applicability of force majeure depends primarily on the contractual wording, the causal link between the event and non-performance, and the principles embodied in Sections 32 and 56 of the Indian Contract Act, 1872.

This article examines the legal position in India with reference to statutory provisions and judicial precedents, and analyses whether the present Middle East conflict could qualify as a force majeure event.

1. Nature and Function of Force Majeure Clauses in Commercial Contracts

A force majeure clause is a contractual mechanism that excuses a party from performance when an unforeseeable event beyond the control of the parties prevents the fulfillment of contractual obligations. Such clauses commonly cover events such as war, natural disasters, epidemics, governmental actions, embargoes, and supply chain disruptions.

The primary function of a force majeure clause is not to terminate the contract automatically, but to provide relief such as:

• suspension of obligations,
• extension of time,
• renegotiation,
• or termination in extreme cases.

In modern commercial practice, force majeure clauses are frequently found in:

• supply and distribution agreements,
• power purchase agreements,
• infrastructure contracts,
• oil and gas contracts,
• cross-border investment agreements.

Indian courts have consistently held that the force majeure clause is governed primarily by the terms of the contract itself, and only in the absence of such a clause do statutory principles apply.

2. Statutory Framework in India – Sections 32 and 56 of the Indian Contract Act, 1872

The Indian Contract Act, 1872 does not define force majeure expressly. However, the doctrine operates through:

Section 32 – Contingent Contracts

Where a contract depends on the occurrence of an uncertain future event, and that event becomes impossible, the contract becomes void.

Section 56 – Doctrine of Frustration / Supervening Impossibility

A contract becomes void when performance becomes impossible or unlawful due to an event which the promisor could not prevent.

The Supreme Court has clarified the distinction in Energy Watchdog v. CERC (2017) 14 SCC 80, holding that:

• If a contract contains a force majeure clause → Section 32 applies.
• If no clause exists → Section 56 may apply.
• Courts will not rewrite the contract merely because performance has become difficult.

Thus, the contractual clause prevails over the statutory doctrine wherever applicable.

3. Does War Automatically Qualify as Force Majeure?

A common misconception is that the existence of war automatically entitles a party to invoke force majeure. Indian courts have rejected this proposition.

In Alopi Parshad & Sons Ltd. v. Union of India, AIR 1960 SC 588, the Supreme Court held that:

A contract is not discharged merely because its performance has become onerous or more expensive due to wartime conditions. The Court emphasised that commercial hardship, price rise, or difficulty in performance does not amount to impossibility.

Similarly, in Energy Watchdog v. CERC (2017), the Supreme Court held that:

Force majeure cannot be invoked merely because performance has become commercially impracticable.

Therefore, even if the Middle East conflict causes:

• increase in oil prices,
• higher transportation costs,
• delays in shipment,

it may not constitute force majeure unless the contract specifically covers such contingencies.

4. Foreseeability and Alternative Performance – Lessons from International Jurisprudence

Courts often examine whether the event was truly unforeseeable and whether performance was still possible by alternative means.

In Tsakiroglou & Co. Ltd. v. Noblee Thorl GmbH [1962] AC 93 (HL) (Suez Canal case), the House of Lords held that:

Closure of the Suez Canal did not frustrate the contract because goods could still be transported through the Cape of Good Hope, even though at a higher cost. The principle emerging from this decision, often relied upon in Indian courts, is that performance must be impossible, not merely difficult or expensive.

Similarly, in Autopista Concesionada de Venezuela v. Venezuela (ICSID Case No. ARB/00/5), the tribunal rejected the force majeure defence because the alleged civil unrest was foreseeable and did not make performance impossible.

These principles are relevant to current Middle East disruptions, where:

• alternative shipping routes may exist,
• supply may still be available at higher cost,
• delays may occur but performance may not be impossible.

In such cases, force majeure may not succeed.

5. Impact of the Middle East Conflict on Indian Contracts

India is not a direct participant in the present conflict, yet its economy is significantly dependent on Middle East energy supplies. Disruption in oil and LNG shipments, particularly through the Strait of Hormuz, may affect:

• power projects,
• fertiliser contracts,
• infrastructure EPC contracts,
• long-term supply agreements,
• investment agreements.

Whether force majeure can be invoked in India will depend on:

1. Wording of the clause: Does it expressly include war, embargo, blockade, or supply disruption?
2. Geographical scope: Does the clause apply only to events in the country of performance, or globally?
3. Causal connection: Did the conflict actually prevent performance?
4. Mitigation efforts: Did the party attempt alternative sources or routes?
5. Notice and procedural compliance: Was force majeure invoked as per the contract?

Indian courts generally require strict compliance with contractual conditions before granting relief.

6. Misuse of Force Majeure and Judicial Scrutiny

Courts are cautious where force majeure is used as a defence to avoid commercial loss.

In Energy Watchdog v. CERC, the Supreme Court held that:

A party cannot avoid contractual obligations merely because performance has become unprofitable.

Many contracts also contain reasonable endeavours / mitigation clauses, requiring the affected party to:

• attempt alternative sourcing,
• use substitute routes,
• minimise losses.

Failure to do so may defeat a force majeure claim.

7. When the Middle East Conflict May Qualify as Force Majeure

The present conflict may qualify as force majeure in India if:

• the contract specifically includes war / blockade / government action,
• shipping routes become legally or physically impossible,
• performance cannot be achieved even with reasonable efforts,
• the event was not foreseeable at the time of contracting,
• proper notice is given.

It may not qualify where:

• performance is still possible at higher cost,
• delay alone is caused,
• risk allocation was already provided in the contract,
• the clause is narrowly drafted.

Conclusion

The ongoing Middle East conflict highlights the growing importance of force majeure in global commercial arrangements. However, under Indian law, war or geopolitical tension does not automatically trigger force majeure.

The legal position is well settled:

• Force majeure is primarily a matter of contract.
• Sections 32 and 56 of the Indian Contract Act apply only within defined limits.
• Courts require proof of actual impossibility, not mere hardship.
• Foreseeability, causation, and mitigation are critical factors.

Judicial precedents such as Alopi Parshad, Energy Watchdog, and international decisions like Tsakiroglou demonstrate that force majeure remains a narrow and carefully scrutinised defence, even in times of global crisis.

In an increasingly uncertain geopolitical environment, the present situation serves as a reminder that precise drafting of force majeure clauses and risk allocation provisions is essential, particularly in cross-border and energy-linked contracts involving India.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.