The Finance Ministry has allowed central government procuring entities to invoke the Force Majeure Clause (FMC) in contracts affected by the ongoing West Asia conflict, treating the situation as “war” for procurement purposes and permitting deadline extensions without penalties.
The move is expected to provide relief to contractors and vendors facing supply-chain bottlenecks, shipping delays and project execution hurdles linked to the prolonged geopolitical tensions in West Asia.
Under the order, completion dates for obligations due on or after February 28, 2026, may be extended by a minimum of two months and up to four months, with no additional cost or penalty imposed on contractors, suppliers, consultants or service providers.
The ministry clarified that Force Majeure claims will be valid only if parties were not already in default of contractual obligations as of February 27, 2026. It also said the provision does not excuse all instances of non-performance, but only those directly attributable to disruptions caused by the West Asia conflict. Normal contractual obligations will resume once the relief period ends.
The memorandum, issued by the department of expenditure on April 29, said disruptions arising directly or consequentially from the prevailing West Asia situation that impact contractual obligations in goods and services contracts, as well as construction and works contracts with government agencies, may qualify for Force Majeure relief.
The memorandum reiterated existing procurement manual provisions under which Force Majeure covers extraordinary events beyond human control, including war, riots, strikes and natural calamities. Such clauses suspend contractual liability temporarily rather than cancel obligations outright, and claims must be notified within a reasonable time.
TOPICSTradeThis article was first uploaded on May two, twenty twenty-six, at forty-two minutes past twelve in the am.