In international business, a war lets you stop working, but it doesn't stop your obligation to keep paying back the bank.
SSRN · March 18, 2026 · 6417439
The Takeaway
Most people assume 'Acts of God' or war provide a total legal pause on contracts. This paper reveals a 'Debt Service Asymmetry' where companies are legally stuck paying back loans for projects they are prohibited from operating, effectively turning war into a financial signaling tool for sovereign states.
From the abstract
The escalation of military conflict involving the United States, Israel, and Iran in early 2026 has triggered an unprecedented cluster of force majeure declarations across energy contracts, shipping obligations, and infrastructure investment commitments in the Gulf region. While force majeure provisions allow commercial delivery obligations to be suspended under conditions of war or political disruption, the underlying financing obligations embedded in project finance structures remain legally a