Middle East’s construction disputes get resolved more swiftly: Arcadis report

arcadis 23Party to party negotiation is the preferred method for resolving disputes across the region. (Image source: Ivan/Flickr)Ongoing liquidity disputes within the Middle East construction market continue are resolving more swiftly, according to the latest research from Arcadis, Amsterdam-based global design, engineering and management consulting solution provider

The company’s “2018 Global Construction Disputes Report” examines some of the most common causes of dispute on construction projects, as well as the average duration and value of disputes and the method of dispute resolution most commonly deployed.

According to the report, over the last year, the average length of time needed to resolve a dispute in the Middle East fell to about 13.5 months. This trend towards swifter resolution was also observed last year, which reflects the industry’s focus on trying to improve liquidity across the wider supply chain.

However, the average value of disputes increased over the last year, rising to US$91mn, mainly due to a small number of high-value disputes and a flow of ‘mid value’ final account claims, said Arcadis.

“A failure to make interim awards on extensions of time and compensation emerged as the most common cause of disputes on construction projects in the Middle East. This was a new trend however it was very closely followed by a failure to properly administer the terms of the contract which has been a recurring issue in previous years,” the report has identified.

Rob Nelson-Williams, regional head of contract solutions at Arcadis Middle East, commented, “In analysing the causes of disputes on construction projects in the Middle East, we continue to see a lot of the same issues crop up. This underlines the need to get the basics right and the importance of seasoned technical and commercial advice when it comes to contracts or claims strategy.”

“Over the next 12 to 18 months, major regional construction related events loom ever closer. As pressure increases to meet fixed deadlines, the need to make smart decisions around contract and procurement strategies will be even more important. Embracing lessons from the past is key to reducing the risk of disputes but also in helping the industry move towards a more harmonious and less confrontational contracting environment for all parties,” concluded Nelson-Williams.

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