Delhi Govt invokes force majeure clause for West Asia-hit contracts

The Delhi Government has adopted the Centre’s guidelines allowing government departments and agencies to invoke the Force Majeure clause (FMC) in procurement and works contracts disrupted by the ongoing conflict in West Asia. The move offers relief to contractors, suppliers and service providers facing delays beyond their control.

In an order issued on July 14, the Finance Department of the Government of NCT of Delhi circulated an office memorandum issued by the Ministry of Finance’s Department of Expenditure to all departments, autonomous bodies, the Municipal Corporation of Delhi (MCD), the New Delhi Municipal Council (NDMC), the Delhi Cantonment Board and other agencies for compliance.

The office memorandum clarifies that the ongoing conflict in West Asia will be treated as a “war” for the purpose of invoking the Force Majeure Clause in government contracts where the situation has directly or indirectly disrupted contractual obligations.

Under the guidelines, procuring entities may extend deadlines for contractual obligations due on or after February 28, 2026, by at least two months and up to four months. The extension may be granted without imposing liquidated damages, penalties or other punitive measures, subject to examination on a case-by-case basis.

The Centre has, however, prescribed conditions for invoking force majeure. Contractors, suppliers, consultants and service providers must not have already been in default as of February 27, 2026, and the delay must be directly attributable to disruptions caused by the prevailing situation in West Asia. The authorities have also clarified that force majeure does not excuse all contractual non-performance, but only those obligations affected by the conflict.

The memorandum reiterates that a force majeure event refers to extraordinary circumstances beyond human control, including natural calamities, war, riots and strikes. It only suspends contractual obligations for the duration of the event. It also requires affected parties to notify the other party within a reasonable period, preferably within 14 days of the occurrence, and bars retrospective claims.

The existing procurement manuals also provide that where delays arise solely because of a valid force majeure event, the delivery or completion period should be revised without imposing penalties, provided the prescribed procedure is followed.

The Delhi Finance Department has forwarded the Centre’s directions to all government departments and civic agencies, directing them to take the necessary action in applicable procurement and works contracts.