Force Majeure under English Law in the shadow of the Iran Conflict: Drafting, Invocation and Emerging Risk Allocation

Force majeure clauses have long been a familiar feature of commercial contracts governed by English law. Recent geopolitical developments, particularly the 2026 Iran conflict and associated disruption to global energy and shipping markets, have brought these provisions into sharp focus. For commercial litigators and in-house counsel, the current environment underscores both the doctrinal limits of force majeure under English law and the practical importance of careful drafting and evidential discipline when invoking such clauses.

1. The Starting Point: There is no doctrine, only drafting

A fundamental point which is often overlooked outside specialist circles is that English law does not recognise force majeure as a free-standing legal doctrine. Its operation is entirely contractual.

As such, a force majeure clause is best viewed as a contractual risk allocation mechanism: it defines specified supervening events and prescribes their consequences (typically suspension, extension of time, or termination).

Absent such a clause, a party must fall back on the doctrine of frustration, an exacting test requiring performance to be rendered impossible or radically different, and rarely satisfied in modern commercial cases.

The practical implication is clear: everything turns on construction. The court’s task is not to ask whether an event is, in the abstract, “force majeure”, but whether it falls within the force majeure clause as drafted.

2. Key Elements of a Typical Clause

Although drafting varies, most English law force majeure clauses require:

• A specified or catch-all event: (“war”, “acts of government”, “failure of utilities”);

• Causation: the event must “prevent”, “hinder” or “delay” performance;

• Mitigation obligations: reasonable steps must be taken to avoid or reduce impact;

• Notice requirements: strict compliance is usually a condition precedent;

• Consequences: suspension, time extension, or termination rights.

Each of these elements has become contentious in the context of the Iran conflict and the very specific geography of the region.

3. The Iran Conflict and how Force Majeure has been tested

The ongoing conflict, centred on attacks across the Gulf region and wider disruption to the Strait of Hormuz and beyond, has produced precisely the type of systemic shock that Force Majeure clauses are designed to address. Shipping, energy supply, and industrial production have all been materially affected to the extent that Governments are taking radical action to release oil reserves to help offset the shortfall as well as deploy military forces to the region in an attempt to reopen shipping lanes.

(a) Direct invocation of Force Majeure

There has already been a wave of force majeure declarations across the energy and commodities sectors. QatarEnergy halted LNG production following attacks and declared force majeure on shipments, this most significantly caused Shell to similarly declare a force majeure event in respect of deliveries it was expecting from QatarEnergy. Bahrain’s state energy company (Bapco Energies) was forced to invoke force majeure after refinery damage caused by an Iranian rocket and other major oil and gas companies have followed suit with disruptions cascading downstream.  

Where it becomes more interesting, and likely more contentious, is where we have seen secondary producers, dependant on the supply of oil and gas, declaring force majeure events as a result of the conflict. Hindalco Industries, an Indian based extruded Aluminium producer, for instance, has declared a force majeure event as they are seemingly unable to obtain the gas they need for aluminium production.

These examples illustrate a key point: force majeure is propagating through the length of contractual supply chains. A supplier’s inability to perform, if contractually excused, may itself trigger downstream force majeure claims, but always subject to drafting.

(b) Indirect Effects: Energy Prices

Not all disruptions are clear-cut. In the UK, the conflict has caused a dramatic increases in energy costs, placing pressure on energy-intensive industries such as the aforementioned aluminium industry, but also steel, chemicals, transport, and construction.

The critical legal question is whether increased cost, even in extreme cases, engages force majeure clauses. Under English law, the answer is almost universally “no” unless the clause expressly provides otherwise. Courts have consistently drawn a distinction between impossibility and/or prevention and mere commercial difficulty. This has remained the case since the embryonic days of force majeure clauses in the case of Taylor v Caldwell, 122 E.R. 309; 3 B. & S. 826 (1863).

This presumption is likely to be tested in current disputes however, particularly where gas shortages or regulatory prioritisation of domestic supply effectively constrain industrial activity, in some cases, entirely.

4. Foreseeability and the War paradigm

A further emerging issue is foreseeability and definition. Even where “war” is an expressly listed force majeure event, it does not follow that the clause will apply in all circumstances.

While some may argue that it is a recent development that parties that contract against a backdrop of instability may find it hard to rely on force majeure, it has actually been a feature since at least the early 20^th Century. Bailhache J. in Matsoukis v Priestman & Co [1915] 1 KB 240 established the principle that predictability of economic hardships, when negotiating, impacts upon a parties ability to rely on force majeure. Recent commentary continues to highlight that where parties contract against a backdrop of known geopolitical instability, reliance on force majeure may be curtailed. Courts have emphasised that events must be, in substance, unexpected at the time of contracting.

In the Iran context, this will likely create a divide between two types of contract, (i) those post-dating February 2026, and (ii) those pre-dating February 2026. However, an escalation or change in the nature of the conflict may still prove sufficient to rely on force majeure. The analysis in cases such as these are intensely fact sensitive.

5. Causation: Is something “Prevented” or “Hindered”

The choice of causal language in force majeure clauses is critical. “Prevented” naturally sets a higher bar where as “Hindered” or “Delayed” provides a broader gateway to claim there is a qualifying event.

Again, this will be fact specific and often involve a detailed interplay between context, understood risks of the parties, and insurance terms and coverage. In the shipping context, for example, vessels unable to transit the Strait of Hormuz due to military warnings may satisfy a “prevented” threshold even though transit is technically possible.

By contrast, increased costs or reduced profitability, even if severe, are unlikely to do so. The Commercial Court has historically required “very significant” difficulty before excusing even payment obligations (see: Foxton J. in Litasco SA v Der Mond Oil & Gas Africa SA & another [2023] EWHC 2866 (Comm)).

6. Mitigation and Reasonable Endeavours: You can’t just sit there

Force majeure is not a clause that enables a party to simply down tools. Most clauses require the affected party to take reasonable steps to mitigate the impact of the event.

In the current environment, this raises complex evidential questions. In Iran for instance:

• Could alternative supply routes have been used which avoided the Gulf?;

• Are there substitute suppliers available, even if these are at a higher costs?;

• Was it a reasonable expectation that stockpiling or hedging would be needed?

In these circumstances, the burden of proof will rest solely with the party invoking the clause. Evidence, and particularly evidence of mitigation, is going to be critical for proving a claim.

7. Payment Obligations and Financial Performance

One of the most commercially significant issues, particularly in long-term supply agreements, is whether force majeure excuses a party from payment. Under English law, the position has usually been that it does not, absent any clear wording to that effect. Even where performance is hindered, courts are reluctant to relieve parties of accrued payment liabilities.

This creates a divergence between operational and financial risk. A supplier may be excused from delivery obligations, but still required to meet payment obligations under related contracts. In volatile energy markets, such as the present, this asymmetry is a fertile ground for disputes.

8. Interaction with War Risk and Insurance Provisions

The Iran conflict has also highlighted the interaction between force majeure and war risk clauses, ie, CONWARTIME and VOYWAR and insurance arrangements.

The effective closure of the Strait of Hormuz has triggered reassessment of war risk cover and, in some cases, cancellation or repricing of policies, sometimes with incredibly high premiums.

Critically, force majeure clauses do not operate in isolation. War risk clauses may shift responsibility for routing decisions or additional costs and insurance provisions may determine whether losses are recoverable, but it will depend on a complete reading of all relevant contracts to navigate a party through the relevant clauses.

9. Drafting practicalities

The current situation in Iran reinforces several drafting points for those advising on English law contracts:

• Define events precisely: Include (or exclude) “war”, “acts of terrorism”, “sanctions”, and “supply chain disruption” with care;

• Address causation explicitly: Consider whether “hindrance” or “delay” should suffice, rather than strict prevention;

• Deal with economic hardship: If price volatility is a concern, incorporate price adjustment or hardship mechanisms alongside force majeure;

• Clarify payment obligations: State expressly whether payment obligations are suspended;

• Align with insurance and war risk clauses: Ensure consistency across contractual frameworks;

• Include robust notice and mitigation provisions: These are often determinative in practice.

10. Conclusion

The Iran conflict has once again challenged force majeure as COVID previously did. It demonstrates, once again, that under English law the doctrine offers no general escape from bad bargains or adverse market conditions. Instead, it rewards careful drafting and disciplined invocation. For counsel, the central task is not merely to identify whether a geopolitical event has occurred, but to map that event onto the precise contractual language agreed, often years earlier, and in very different circumstances.

In that sense, the current wave of disputes is less about the novelty of force majeure than about the enduring principles of contractual construction in English law.

Kyle Lecuona

Barrister

London

The above article does not constitute legal advice. Every dispute is unique and expert advice should be sought in respect of your specific circumstances.