Costas Apokides
Principal – Litigation Department
Introduction
The world of international trade has always been accompanied by risk. Yet few events can disrupt a business as quickly as a geopolitical crisis beyond anyone’s control.
Since operating as a significant commercial hub in the region, Cyprus is particularly sensitive to developments in the Middle East. Owing to both its geographical proximity and its business ties with the region, any escalation of tensions in the Middle East, inevitably echoes through the Cypriot market.
Beyond social disruption such crises cause, the impact on businesses is tangible and specific: delivery delays, inability to perform contractual obligations, and unforeseen costs. In periods of such instability, these consequences are almost expected, requiring immediate strategic management.
What can a business do when circumstances move beyond its control? Who bears responsibility? And what legal steps are necessary to protect its interests and contractual obligations?
Force Majeure
There is a legal mechanism that can determine responsibility when circumstances exceed the parties’ control: the Force Majeure clause, also known as “superior force.”
Force Majeure refers to unforeseeable events, occurring beyond the control of the contracting parties, that render the performance of a contract impossible. In Cyprus, there is no statutory definition; the concept is grounded in common law principles and court practice.
As a general rule, a Force Majeure clause must be expressly included in the contract. Without such a clause, invoking the doctrine is extremely difficult, unless the event leads to what English law describes as frustration: the automatic discharge from contractual obligations when performance of a contract becomes illegal or practically impossible due to an unforeseen change of circumstances.
Typically, a Force Majeure clause covers wars and military actions, natural disasters, pandemics, or government prohibitions preventing business operations, as well as any extreme situation that could not reasonably have been foreseen at the time of contracting. In most cases, it operates suspensively: obligations are paused for as long as the event continues and resume once conditions normalize. Full exemption from liability or permanent termination depends entirely on the wording of the clause and the severity of the event.
In Cyprus, such clauses appear in the vast majority of commercial agreements. While most businesses have incorporated them into their contracts, they have often done so as a matter of routine, without giving due consideration to their scope, implications, or practical consequences.
What It Covers and What It Does Not
Force Majeure clauses are not a shield against every difficulty. For such a clause to apply, the event must be unforeseeable, beyond the parties’ control, and sufficiently serious to render contractual performance impossible or practically unfeasible.
Financial hardship, payment delays, or problems that could reasonably have been anticipated at the time of contracting will usually not fall within the scope of Force Majeure; even if a geopolitical crisis exacerbates them.
The effectiveness of the clause depends largely on the precision of its wording. It should clearly identify the events that trigger its application, outline the treatment of contractual obligations during their duration, and determine the remedies available once the event has ceased. Without such precision, the clause risks proving ineffective precisely when it is most needed.
What Businesses Should Do Now
The first step is a careful review of existing contracts. Which agreements include a Force Majeure clause? What events fall within its scope? What procedures must be followed to invoke it? For contracts involving partners in the Middle East, this knowledge is essential.
At the same time, businesses should proactively identify which deliveries, services, or projects are most vulnerable. Which suppliers or transport routes are most exposed? Which risks, delays, cancellations, prohibitions are most likely? Mapping this exposure provides a clear picture of where the company stands.
If the need arises to invoke Force Majeure, timing becomes critical. Most clauses require prompt notification to the counterparty as soon as the event becomes known. Delay in giving notice may weaken the company’s position, particularly if it is argued that the business failed to take reasonable steps to mitigate the consequences.
However, invoking Force Majeure alone is rarely sufficient. A company must demonstrate that it has taken active steps to address the situation, such as seeking alternative suppliers, modifying transport routes, or adapting services where possible. Inaction can significantly weaken its legal standing.
It is also important to remember that suspension of obligations is not indefinite. If the crisis persists, the contract may provide for termination or renegotiation after a specified period. Continuous monitoring of developments and timely legal advice are therefore essential.
The present circumstances are undoubtedly challenging. Nevertheless, difficulty should not result in hesitation or paralysis. Protective mechanisms are available, and businesses that respond promptly are better positioned to limit their damages.
Disclaimer
This publication has been prepared as a general guide and for information purposes only. It is not a substitution for professional advice. One must not rely on it without receiving independent advice based on the particular facts of his/her own case. no responsibility can be accepted by the author or the publishers for any loss occasioned by acting or refraining from acting on the basis of this publication.
March 2026
Author
Costas Apokides
Principal – Litigation Department
Costas.Apokides@kinanis.com