Annual study from Arcadis sheds light on the latest trends around disputes in the regional construction market. The results offer insight on the most common causes, most effective solutions and the average length and value of a dispute.
Ongoing liquidity issues within the Middle East construction market, due to the lagging effects of recent low oil prices, has led to an active claims and disputes market over the last twelve months.
A selection of the key findings from this year’s study include the below:
1. Average length of time needed to resolve a dispute is decreasing:
Over the last year, the average length of time needed to resolve a dispute in the Middle East fell to just 13.5 months. This trend towards swifter resolution was also observed last year and reflects the industry’s focus on trying to improve liquidity across the wider supply chain.
2. Average value of disputes is rising:
Over the last 12 months, the average value of a construction dispute handled increased to $91m. This was due to a small number of high-value disputes and a steady flow of ‘mid value’ final account claims.
3. Basic contract understanding is still at the heart of most disputes:
A failure to properly administer the terms of the contract remained a major cause of disputes on construction projects over the last year. This once again underlines the need to get the basics right, and the importance of seasoned commercial advice when it comes to contract and claims strategy.
4. Party-to-party negotiation still the preferred method for resolving disputes:
Consistent with previous years, party to party negotiation and arbitration remained the two most common methods of dispute resolution in the Middle East.
You can view the full findings by downloading this year’s report at the link below.
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