The Regulation of Force Majeure in the Contract Laws of Gulf States: Private Law as Investment Law

Abstract

Gulf nations have entered into relatively few bilateral investment treaties. Foreign investors
and transnational commercial actors therefore rely on a combination of Gulf Cooperation Council
(GCC) private laws as well as foreign private laws (including common law) in their contractual
relationships with government entities and other private actors; contracts and contract law are
hence central to investment protection. Force majeure is regulated by both statute (civil codes),
except for Saudi Arabia, as well as an emerging body of case law in the Gulf states. Although the
private laws of GCC states were modeled under the Egyptian Civil Code of 1948 and the case law
of the Egyptian Court of Cassation is still somewhat evident, although far less than past times, GCC
member states have developed a common understanding of force majeure that is consistent with
international practice. They all distinguish between unforeseen acts that render performance of at
least one party’s obligation impossible from those where performance is difficult but certainly
possible. A clear consensus has emerged whereby the parties cannot determine by contract situations
giving rise to force majeure.