Government Invokes Force Majeure, Grants up to 4-Month Relief to Contractors Amid West Asia Crisis
In a bid to provide relief to contractors amid the fast-evolving West Asia situation, the government has allowed them to invoke ‘Force Majeure’ in view of disruptions, recognising “war” as a valid trigger under procurement rules. In an office memorandum, the Ministry of Finance said the prevailing conditions in West Asia should be treated as a war-like event for contractual purposes.
New Delhi, May 2: In a bid to provide relief to contractors amid the fast-evolving West Asia situation, the government has allowed them to invoke ‘Force Majeure’ in view of disruptions, recognising “war” as a valid trigger under procurement rules. In an office memorandum, the Ministry of Finance said the prevailing conditions in West Asia should be treated as a war-like event for contractual purposes, enabling relief to contractors impacted by delays.
Under the revised guidance, contracts with completion deadlines on or after February 28, 2026, that have been affected directly or indirectly by the West Asia disruptions may be granted an extension of at least two months and up to four months, without any penalty or additional cost to contractors. Donald Trump Warns of Possible Disruption to Global Oil Flows Amid Tensions Around Strait of Hormuz.
“Not with standing the punitive provisions contained in the contract for delay or breach of contract, the supplier would not be liable for imposition of any such sanction so long as the delay… is the result of an event covered in the FM clause,” the memorandum noted. Moreover, the government also reiterated that delays attributable to ‘Force Majeure' must be assessed on a case-by-case basis, with procuring entities required to re-fix delivery or completion timelines without imposing liquidated damages or denial clauses.
However, the relief comes with conditions. Invocation of Force Majeure will be considered valid only if contractors were not already in default as of February 27, 2026, and only for disruptions directly linked to the West Asia situation. Contracts may still be terminated by either party if Force Majeure conditions persist beyond 90 days, without any financial repercussions. “All contractual obligations shall revive upon completion of the period,” the ministry added. Iran Proposes 3-Stage Plan To Reopen Strait of Hormuz in Exchange for End to US Blockade: Report.
The clarification builds on provisions outlined in the “Manual for Procurement of Goods, 2024”, “Manual for Procurement of Consultancy Services, 2025”, “Manual for Procurement of Non-Consultancy Services, 2025” and “Manual for Procurement of Works, 2025”, which define Force Majeure as extraordinary events beyond human control, including war, strikes, riots and natural calamities.
(The above story first appeared on LatestLY on May 02, 2026 09:42 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).
