Hardship Under Article 130 of the Bahraini Civil Code: Managing Contractual Risk Amid Regional Disruptions
Regional developments, including armed conflict, sanctions and disruptions to key shipping routes, are creating uncertainty for businesses operating across the GCC. In Bahrain, the doctrine of hardship under Bahraini Civil Code Article 130 may provide relief where unforeseen circumstances arise after a contract has been signed and during its performance, making performance significantly more burdensome.
The doctrine of hardship under Bahraini law
Article 130 applies where exceptional and unforeseeable circumstances arise after a contract has been signed but before full performance, rendering performance excessively onerous, though not impossible.
In such circumstances, Bahraini courts may intervene to rebalance the contract. After considering the interests of both parties, the court may adjust the parties’ obligations, including by reducing the scope of performance or modifying the corresponding consideration. Any contractual attempt to exclude this statutory right is considered void.
Distinction from force majeure
The doctrine of hardship is distinct from force majeure, which is addressed under Articles 145 and 146 of the Civil Code.
Force majeure applies where performance becomes objectively impossible due to an external cause beyond the control of the obligor, resulting in the extinction of the obligation and automatic termination of the contract. If the impossibility is partial, the creditor may either require performance of the remaining obligation or seek termination. By contrast, Article 130 applies where performance remains legally and physically possible but imposes a disproportionate financial or operational burden on a party.
Where a contract expressly defines force majeure events and regulates their consequences, the contractual provisions will generally govern the parties’ rights and obligations in the first instance. In the current regional environment, events such as sanctions, supply chain disruptions or interruptions to key shipping routes may not necessarily prevent performance entirely but may significantly increase costs or operational challenges. In such circumstances, and subject to the relevant contractual provisions, the hardship doctrine may be relevant.
When courts may grant relief
Relief under Article 130 is discretionary and requires the party invoking it to demonstrate that:
- the circumstances were exceptional and unforeseeable
- they arose after the contract was signed
- performance has become excessively onerous, resulting in substantial loss
Where these conditions are met, the court may adjust contractual obligations or consideration to restore fairness while preserving the contract wherever possible.
Practical considerations for businesses
Businesses considering reliance on hardship or force majeure provisions should carefully review their contractual arrangements and applicable legal requirements. This may include:
- assessing whether performance is impossible or merely onerous
- reviewing relevant force majeure or hardship clauses
- complying with notice requirements and other procedural obligations
- documenting the impact of extraordinary events on contractual performance
Proactively reviewing contractual exposure and available remedies can help businesses manage legal and commercial risk during periods of disruption.
How we can assist
ASAR advises clients on contractual risk and dispute management under Bahraini law. Our team can assist with:
- reviewing contracts to assess the applicability of hardship or force majeure provisions
- advising on available remedies and strategies to mitigate potential losses
- assisting with negotiations or interim arrangements between counterparties
- representing clients before Bahraini courts or arbitral tribunals, where necessary
For further information or assistance, please contact Amal Lari (Partner) at ASAR Bahrain: alari@asarlegal.com.
