The Role of Force Majeure and Hardship in the Termination of Iranian Oil Contracts: An Analysis of Judicial Practice and International Arbitration
Keywords:
Iranian oil contracts, force majeure, hardship, contract termination, international arbitrationAbstract
The oil industry in Iran, due to its capital-intensive and long-term nature, has consistently faced geopolitical risks, market volatility, and legal and political fluctuations. This reality significantly reinforces the necessity of drafting oil contracts in a manner that enables them to withstand crises and unforeseeable circumstances. The concepts of force majeure and hardship are recognized as fundamental tools for managing such conditions and ensuring contractual equilibrium. The absence of precise and explicit drafting of these concepts in Iranian oil contracts has resulted in costly disputes before domestic courts and international arbitral tribunals. This article aims to analyze the role of force majeure and hardship in the termination and adaptation of Iranian oil contracts and to examine international arbitral approaches to these concepts. It seeks to identify effective legal mechanisms for aligning oil contracts with global economic and political developments as well as domestic conditions, emphasizing the importance of accurate and anticipatory incorporation of these clauses in contractual texts. The present study endeavors to examine the legal status and functional significance of force majeure and hardship in Iranian oil contracts, reassess the gap between theoretical constructs and practical application, and propose corrective strategies and practical recommendations to strengthen contractual security and enhance the credibility of Iran’s oil contractual regime.
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Copyright (c) 2025 Abbas Kazemi Najafabadi, Seyyed Ghasem Zamani (Author); Mahmoud Jamshidvand
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