Civil Law and UAE Crisis Law and Emergency Civil Liability Systems

1. Introduction

The UAE civil-law system does not treat a crisis, disaster, pandemic, natural catastrophe, government shutdown, war-related disruption, or other emergency as automatically eliminating civil liability.

Instead, the legal system asks several separate questions:

Was there an emergency or extraordinary event?

Was the event beyond the person's control?

Was the event foreseeable?

Did it make performance impossible or merely more difficult?

Did it actually cause the damage or contractual non-performance?

Could the person have avoided or mitigated the consequences?

Does a special crisis statute or government measure apply?

Does the contract contain a force-majeure or emergency clause?

Is the claim contractual or extra-contractual?

What compensation, suspension, reduction, termination or other remedy is appropriate?

The UAE therefore operates a risk-allocation model rather than an automatic crisis immunity model.

The new Federal Decree-Law No. 25 of 2025 promulgating the Civil Transactions Law entered into force on 1 June 2026. It contains specific provisions dealing with exceptional circumstances, force majeure and civil liability. (LEXAI)

2. Meaning of Crisis Law

“Crisis law” is not necessarily one single UAE statute. It is better understood as the collection of legal rules governing the consequences of extraordinary circumstances.

These may include:

pandemics;

epidemics;

natural disasters;

floods;

earthquakes;

extreme weather;

public-health emergencies;

government restrictions;

closure orders;

travel restrictions;

war or armed conflict;

cyber incidents affecting critical infrastructure;

supply-chain emergencies;

major economic disruptions;

evacuation orders;

emergency governmental measures.

The consequences may arise under:

Civil law + contract law + procedural law + sector-specific legislation + emergency legislation + government decisions.

3. Emergency Civil Liability

Emergency civil liability concerns the question:

When extraordinary circumstances cause injury, property damage, contractual non-performance or economic loss, who should bear the legal consequences?

The answer depends upon the type of liability.

Contractual liability

A crisis may affect whether a contractual obligation:

remains enforceable;

is temporarily suspended;

becomes impossible;

should be modified;

should be terminated;

gives rise to damages.

Extra-contractual liability

A crisis may affect whether a person is liable for:

personal injury;

property damage;

negligence;

unsafe premises;

environmental harm;

defective products;

failure to take reasonable precautions.

Procedural consequences

An emergency may also affect:

limitation periods;

court deadlines;

service;

hearings;

enforcement;

remote proceedings;

default judgments.

4. Current UAE Civil Transactions Law

The current Civil Transactions Law contains two particularly important concepts.

A. Exceptional circumstances — Article 224

Article 224 of the 2025 Civil Transactions Law provides that where exceptional, general and unforeseeable circumstances arise after contracting and make performance excessively onerous, threatening serious loss, the court may, after balancing the interests of the parties:

reduce the onerous obligation to a reasonable level; or

order rescission of the contract.

The provision also permits the court, depending upon circumstances, to:

order performance;

grant a grace period;

refuse rescission where performance occurs;

award compensation where justified. (LEXAI)

This is fundamentally a hardship mechanism.

5. Force Majeure — Article 236

Article 236 of the new Civil Transactions Law provides a separate rule.

Where force majeure makes performance of an obligation impossible:

the corresponding obligation is extinguished;

the contract is automatically rescinded.

Where impossibility is only partial, a party may invoke extinguishment of the corresponding obligation or seek rescission.

Where impossibility is temporary in a continuing contract, the parties may invoke:

extinguishment of the corresponding obligation;

modification of the contract; or

judicial rescission. (LEXAI)

This creates an important distinction:

Hardship deals principally with excessive onerousness; force majeure deals with impossibility.

6. Hardship Versus Force Majeure

This distinction is critical in UAE civil law.

7. Crisis Does Not Automatically Excuse Performance

A party cannot simply say:

“There was a crisis, therefore I am not liable.”

The court normally needs to examine causation.

For example:

Company A owes AED 5 million.

A pandemic occurs.

A claims that the pandemic prevented payment.

But if A had sufficient funds and could make payment electronically, the mere existence of the pandemic does not necessarily establish force majeure.

The question is:

Did the emergency actually prevent the relevant performance?

The current Civil Transactions Law separately recognizes external causes such as force majeure in civil liability. Article 249 provides that where a person proves that harm resulted from an external cause beyond their control, such as an act of God, sudden accident, force majeure, third-party act or act of the injured person, compensation liability may be excluded unless law or agreement provides otherwise. (UAE Legislation)

8. Crisis and Causation

Causation becomes particularly important during emergencies.

Suppose a hospital patient suffers injury during a pandemic.

There could be several possible causes:

disease itself;

hospital negligence;

shortage of medical resources;

government restrictions;

delayed treatment;

patient's pre-existing condition.

The court must determine whether the defendant's conduct legally caused the damage.

Thus:

Emergency ≠ automatic causation

and:

Emergency ≠ automatic immunity.

9. Duty to Mitigate

A crisis does not necessarily remove the obligation to take reasonable steps to avoid or reduce damage.

For example, a company facing a temporary government restriction might be expected, depending on the circumstances, to consider:

alternative suppliers;

remote performance;

alternative delivery methods;

substitute premises;

temporary suspension;

renegotiation;

insurance claims;

government relief;

reasonable notification to the counterparty.

The precise obligation depends upon the contract, applicable legislation and facts.

10. Government Emergency Measures

Government action can be particularly important.

An emergency may result in:

closure of businesses;

travel restrictions;

quarantine;

import/export restrictions;

restrictions on gatherings;

construction restrictions;

movement restrictions;

health and safety requirements.

A government prohibition may provide strong evidence that contractual performance was prevented.

But the court must still examine:

Government measure → Relevant obligation → Actual impediment → Duration → Causation → Consequence.

11. COVID-19 as a UAE Example

COVID-19 provides the most significant recent example of emergency civil-law disputes in the UAE.

Courts had to consider:

travel restrictions;

business closures;

construction delays;

commercial rent;

insurance claims;

property transactions;

procedural deadlines;

remote hearings;

contractual force majeure;

business interruption losses.

Importantly, courts did not adopt a universal rule that COVID-19 automatically constituted force majeure for every contract.

The effect depended upon:

contract wording;

applicable law;

nature of the obligation;

timing;

government restrictions;

actual causal effect;

foreseeability;

mitigation.

12. Case Law

Case 1 — Al Rihab Real Estate Company LLC v Emirates NBD Bank PJSC, [2020] DIFC CA 006

This is an important UAE pandemic-related authority.

The appellant attempted to rely on the pandemic and Article 249 of the UAE Civil Transactions Law concerning exceptional public events making performance excessively onerous.

The DIFC Court of Appeal rejected the argument in the circumstances because the UAE Civil Transactions Law was not applicable to DIFC proceedings. It also noted the extraordinary length of the pre-pandemic default. (DIFC Courts)

Principle

A party cannot simply invoke the UAE hardship provision in a DIFC proceeding without establishing that the provision is part of the applicable legal framework.

Importance

This case demonstrates:

Emergency doctrine is jurisdiction- and governing-law-specific.

A pandemic argument cannot be separated from the question of which law governs the dispute.

13. Case 2 — Lals Holdings Ltd v Emirates Insurance Company (PSC) & Siaci Insurance Brokers LLC, [2024] DIFC CA 002

This is one of the most important UAE COVID-19 business-interruption cases.

The claimants alleged substantial business-interruption losses caused by the COVID-19 pandemic and government measures. The insurance policies contained business-interruption provisions, and the dispute concerned whether the losses fell within the relevant coverage.

The DIFC Court of Appeal addressed the applicable DIFC-law framework and the interpretation of the insurance policies. (DIFC Courts)

Principle

An emergency does not itself determine insurance liability.

The court must examine:

policy language;

insured peril;

causation;

government measures;

exclusions;

coverage provisions.

Importance

The case illustrates the distinction between:

existence of a crisis

and

contractual responsibility for losses caused by that crisis.

14. Case 3 — Lals Holdings Ltd v Emirates Insurance Company (PSC) & Siaci Insurance Brokers LLC, [2022] DIFC CFI 073

The earlier CFI proceedings concerned COVID-19 business-interruption insurance claims involving alleged losses exceeding the applicable insurance limits.

The claimants sought indemnification for pandemic-related business interruption. (DIFC Courts)

Principle

Emergency economic loss must be analysed according to the precise contractual and statutory framework governing the relevant risk.

Importance

The case demonstrates why courts distinguish between:

pandemic occurrence;

government closure;

physical loss;

business interruption;

insured risk;

contractual coverage.

15. Case 4 — Mohammad Juma Khamis Buamaim v Falcon Golf Management Ltd, [2020] DIFC CFI 015

This case involved a procedural default arising during the COVID-19 emergency.

The DIFC Court considered the extraordinary circumstances surrounding the pandemic and concluded that the COVID-19 emergency and the situation it created constituted sufficient reason, in the circumstances, to set aside the default judgment. (DIFC Courts)

Principle

An emergency can influence the court's exercise of procedural discretion where strict enforcement of procedure would produce an unjust result.

Importance

Crisis law therefore extends beyond substantive contractual liability.

It can affect:

procedural deadlines;

default judgments;

access to justice;

case management.

16. Case 5 — Lendro v Mr Lutis, [2020] DIFC SCT 166

This case concerned a property transaction affected by COVID-19 travel restrictions.

The court considered the inability of a party to travel and complete the transaction in the context of government travel restrictions and the contractual extension mechanism.

The court recognized that the pandemic and travel restrictions had created an unprecedented situation and found that the relevant delay was not attributable simply to one party's voluntary conduct. (DIFC Courts)

Principle

Where emergency government restrictions directly interfere with contractual performance, the court must distinguish between:

ordinary contractual delay; and

delay genuinely caused by the emergency.

Importance

It demonstrates the importance of actual causal connection.

17. Case 6 — Minni v Mithal, [2021] DIFC SCT 354

This dispute concerned tourism and accommodation arrangements affected by COVID-19.

The contract itself contained provisions addressing:

government regulations;

pandemic curtailment;

emergencies;

cancellation;

inability to provide facilities.

The defendant relied upon these provisions following COVID-related disruption. (DIFC Courts)

Principle

Where the parties themselves have contractually allocated emergency risk, the court will need to examine the contractual force-majeure and cancellation provisions.

Importance

This demonstrates:

Contractual force majeure and statutory force majeure must be analysed together.

18. Case 7 — DIFC Investments LLC v Mohammed Akbar Mohammed Zia, [2017] DIFC CFI 001

This case is important for the general force-majeure doctrine under DIFC law.

The Court considered Article 82 of the DIFC Contract Law, under which non-performance is excused where an impediment beyond the party's control could not reasonably have been anticipated or avoided.

The provision also excludes a mere obligation to pay from the force-majeure excuse. (DIFC Courts)

Principle

Force majeure generally requires more than inconvenience or financial difficulty.

Importance

The case provides an important distinction between:

impossibility/impediment to performance

and

difficulty in paying money.

19. Case 8 — MAG Development Services Ltd v The Collection Club Restaurant Ltd & Others, CFI 092/2024

This more recent DIFC decision concerned a force-majeure argument based upon the Dubai floods and financial hardship.

The defendants argued that the natural disaster created circumstances preventing performance.

The Court considered Article 82 of the DIFC Contract Law and emphasized that the statutory force-majeure defence does not generally excuse a mere obligation to pay money. (DIFC Courts)

The case is especially relevant to modern UAE crisis law because it moves the analysis beyond COVID-19 to natural-disaster events.

Principle

A natural disaster may constitute a force-majeure event, but the legal consequence still depends upon:

the nature of the obligation;

the governing law;

actual impossibility;

contractual provisions;

causation.

20. Case 9 — Collection Club Restaurant Ltd & Others v MAG Development Services Ltd, CA 006/2026

The DIFC Court of Appeal considered the force-majeure provisions in Article 82 of the DIFC Contract Law, including the distinction between temporary impediments and monetary obligations. (DIFC Courts)

Principle

Force majeure is not an unrestricted defence to contractual payment obligations.

Importance

This provides a useful contemporary example of how UAE courts continue to scrutinize emergency-based defences after the pandemic era.

21. Contractual Force Majeure Clauses

A well-drafted UAE commercial contract should specify:

what constitutes force majeure;

whether epidemics are included;

whether pandemics are included;

whether government orders are included;

whether natural disasters are included;

notification requirements;

evidence requirements;

mitigation duties;

temporary suspension;

termination rights;

allocation of additional costs.

For example:

“Neither party shall be liable for delay caused by a governmental prohibition, epidemic, pandemic, natural disaster or other event beyond reasonable control, provided that the affected party promptly notifies the other party and takes reasonable measures to mitigate the consequences.”

The effectiveness of such wording depends upon the applicable law and mandatory statutory provisions.

22. Crisis and Extra-Contractual Liability

Emergency conditions can also affect tort/delict liability.

Under the new Civil Transactions Law, Article 249 recognizes external causes beyond a person's control, including:

act of God;

sudden accident;

force majeure;

act of a third party;

act of the injured party.

Where such an external cause is established, compensation liability may be excluded unless the law or agreement provides otherwise. (UAE Legislation)

Therefore:

Wrongful act + damage + causation

must be analysed together with:

external cause + control + foreseeability + mitigation.

23. Emergency and Public Authority Liability

Emergency situations can create difficult questions concerning government officials and public authorities.

The new Civil Transactions Law specifically addresses acts performed by public officials in implementation of law or superior orders.

Article 251 provides conditions under which an official may avoid personal liability where the official:

acted pursuant to law or an order;

had reasonable grounds for believing the action lawful;

exercised due care and caution.

The court may instead award compensation against the person legally responsible for the harm. (UAE Legislation)

This illustrates the importance of distinguishing:

individual official responsibility

from

institutional/public responsibility.

24. Emergency Necessity and Civil Liability

The new Civil Transactions Law also recognizes a form of necessity.

Article 252 addresses a person causing harm in order to avert a greater imminent harm.

Such a person is not automatically liable for full compensation; the court may determine compensation according to the requirements of justice. (LEXAI)

This is important during emergencies.

Example

During a flood, Company A destroys part of a neighbouring structure to prevent water from entering a hospital.

The question becomes:

Was the danger imminent?

Was the action necessary?

Was there a less harmful alternative?

Was the response proportionate?

Emergency civil liability therefore incorporates necessity and proportionality.

25. Emergency and Compensation

Under the new Civil Transactions Law, compensation is generally assessed by reference to the loss suffered and lost profit where it is the natural consequence of the harmful act.

The new law also permits, depending on circumstances:

monetary compensation;

restoration of the previous position;

specific corrective measures;

instalments;

periodic income;

reconsideration where damage worsens. (LEXAI)

Therefore, emergency compensation should not be viewed simply as:

Damage = automatic full payment

Instead, courts consider the legally recognized scope of damage and causation.

26. Crisis Law and Insurance

Insurance is particularly important during emergencies.

A pandemic or natural disaster may generate claims under:

business-interruption insurance;

property insurance;

liability insurance;

health insurance;

construction insurance;

travel insurance;

event cancellation insurance.

But the existence of the emergency does not itself establish coverage.

The court must examine:

Policy → Insured event → Exclusions → Causation → Loss → Coverage limit → Claim procedure.

The Lals Holdings litigation demonstrates precisely this problem in the COVID-19 context. (DIFC Courts)

27. Crisis Law and Construction Contracts

Construction disputes frequently involve emergency events.

Examples include:

pandemic shutdowns;

labour restrictions;

import restrictions;

material shortages;

floods;

extreme weather;

government closure orders.

A contractor may claim:

extension of time;

additional costs;

suspension;

compensation;

termination.

But the contractor generally needs to establish the connection between the emergency and the delay/loss.

A useful formula is:

Emergency Event → Critical Delay → Contractual Obligation → Causation → Notice → Mitigation → Entitlement

28. Crisis Law and Lease Contracts

Emergency events can affect:

rent;

possession;

access;

use of premises;

business interruption;

repairs;

termination.

The current Civil Transactions Law also contains specific force-majeure provisions in particular contractual contexts. For example, the new law provides a specific rule concerning agricultural leases where force majeure prevents cultivation. (LEXAI)

This shows that general emergency principles may operate alongside sector-specific contractual provisions.

29. Crisis Law and Financial Obligations

A particularly important distinction is:

Temporary inability to pay

versus

Legal impossibility of performance.

A debtor might suffer:

reduced revenue;

loss of customers;

increased expenses;

temporary cash-flow problems.

That does not necessarily establish force majeure.

The courts have repeatedly distinguished financial difficulty from genuine legal or physical impossibility in force-majeure analysis. The DIFC decisions in DIFC Investments v Zia and MAG Development Services v Collection Club illustrate this distinction. (DIFC Courts)

30. Crisis Law and Limitation Periods

Emergency conditions can also affect procedural rights.

During COVID-19, courts had to deal with:

physical court closures;

remote hearings;

electronic filing;

procedural deadlines;

service;

default judgments.

Buamaim v Falcon Golf Management illustrates that courts may consider the practical realities of an emergency when exercising procedural discretion. (DIFC Courts)

However, a litigant should not assume that an emergency automatically suspends every limitation period or procedural deadline. The applicable legislation, judicial orders and specific court rules must be examined.

31. Crisis Law and Digital Justice

Emergency conditions accelerated:

remote hearings;

electronic filing;

electronic service;

virtual mediation;

digital signatures;

electronic evidence.

This creates a modern concept of:

Digital emergency justice.

The purpose is to ensure that an emergency affecting physical movement does not completely interrupt access to justice.

32. Crisis Law and Corporate Liability

Companies may face emergency-related claims involving:

employees;

customers;

suppliers;

lenders;

shareholders;

insurers;

government authorities.

A crisis does not normally eliminate separate corporate personality.

The company remains responsible for its legally attributable obligations unless a statutory or contractual defence applies.

Directors may separately face liability where their own conduct constitutes:

breach of duty;

fraud;

negligence;

unauthorized conduct;

statutory violation.

33. Crisis Law and Data/Cyber Liability

Modern emergencies increasingly involve cyber and data risks.

For example:

hospitals may become ransomware targets;

government systems may experience cyberattacks;

emergency databases may process sensitive information;

businesses may rapidly move employees to remote systems.

A crisis does not automatically eliminate data-protection duties.

The legal analysis may involve:

Emergency → Security obligation → Reasonable safeguards → Breach → Causation → Damage → Liability

Thus, emergency law must increasingly interact with cybersecurity and data-protection law.

34. Crisis Law and Public Policy

Certain legal rules cannot simply be contracted away.

The new Civil Transactions Law recognizes mandatory rules and public-order limitations within its general framework. (LEXAI)

Consequently, a force-majeure clause cannot necessarily override:

mandatory legislation;

public-order rules;

statutory protections;

sector-specific emergency regulations.

35. Important Distinction: Crisis Event vs Legal Consequence

This is one of the most important examination points.

Stage 1

Crisis occurs

↓

Stage 2

Legal relevance established

↓

Stage 3

Contract/statute examined

↓

Stage 4

Impossibility or hardship established

↓

Stage 5

Causation established

↓

Stage 6

Liability/remedy determined

Therefore:

A crisis is a factual event; force majeure, hardship, exemption and compensation are legal consequences that must independently be established.

36. Comparative Framework

37. Practical Test for UAE Emergency Civil Liability

A court can conceptually apply the following sequence:

1. Identify the emergency

What happened?

2. Identify the relevant legal rule

Is the issue governed by:

Civil Transactions Law?

special emergency legislation?

contract?

insurance law?

procedural law?

local emirate law?

DIFC/ADGM law?

3. Determine foreseeability

Could the event reasonably have been anticipated?

4. Determine control

Could the party control or avoid it?

5. Determine causation

Did the event actually cause the non-performance or damage?

6. Determine impossibility or hardship

Was performance:

impossible?

partially impossible?

temporarily impossible?

merely more expensive?

7. Examine mitigation

Could reasonable measures have reduced the consequences?

8. Determine remedy

Possible outcomes include:

exemption;

suspension;

modification;

reduction;

rescission;

termination;

damages;

restitution;

continuation of performance.

38. Major Legal Principles from the Case Law

The cases collectively establish several useful principles.

Principle 1

COVID-19 is not automatically force majeure for every contract.

Principle 2

The governing law must be established first.

Principle 3

Actual causal impact matters.

Principle 4

Financial difficulty is not necessarily impossibility.

Principle 5

Government restrictions may be highly relevant evidence of an external impediment.

Principle 6

Contractual force-majeure clauses must be examined carefully.

Principle 7

Insurance liability depends on policy wording and causation.

Principle 8

Courts may take emergencies into account when exercising procedural discretion.

Principle 9

Hardship and force majeure are legally distinct.

Principle 10

Emergency circumstances can affect remedy without automatically eliminating liability.

39. Key Case-Law Table

40. Conclusion

UAE crisis law and emergency civil liability are based on controlled legal adjustment rather than blanket immunity.

The current Civil Transactions Law is particularly important because it expressly distinguishes between:

Exceptional circumstances

Where performance remains possible but becomes excessively onerous and threatens serious loss.

Force majeure

Where performance becomes impossible.

External cause

Where an event beyond the person's control causes damage.

Necessity

Where harm is caused to avert a greater imminent harm.

The COVID-19 and Dubai-flood cases demonstrate that UAE courts examine the actual legal and factual consequences of an emergency, rather than treating the mere existence of a crisis as a complete defence. The current 2026 framework therefore follows a structured approach:

Crisis Event → Applicable Law → Contractual Allocation → Foreseeability → Control → Causation → Impossibility/Hardship → Mitigation → Liability → Remedy

For examination purposes, the core formula is:

Emergency ≠ Automatic Immunity

Hardship ≠ Force Majeure

Financial Difficulty ≠ Impossibility

Crisis Event + Causation + Legal Requirements = Possible Civil Relief

The transition to the 2025 Civil Transactions Law from 1 June 2026 is particularly significant for current UAE research because older cases interpreting Articles 249 and 273 of the repealed 1985 Civil Code should now be used with care; the new law contains corresponding provisions at Articles 224 and 236, together with updated civil-liability provisions. (LEXAI)