SOLUTIONS LOOKING FORWORD

Moving forward, it seems that it will become more important than ever for claimants in a dispute to understand that it is unlikely that they will receive what they believe they are entitled to unless they have furnished their client with a claim that narrates a complete, logical and succinct story. If the claim submission is not substantiated by solid evidence, the latter of which flows naturally from a best practice contract administration process, the claimant will walk away with a less-than-expected settlement.

However, despite this emphasis on the heartless aspects of facts, logic and evidence, the importance of the human factor and emotional intelligence in disputes and how to interact with the team members whether internally within a party or with the opposing party cannot be understated. As Dale Carnegie, an American writer and developer of famous courses in self-improvement and interpersonal skills once said, "When dealing with people, remember you are not dealing with creatures of logic, but creatures of emotion."

With so many large and complex ongoing construction programs across many sectors in the Middle East combined with the current financial and economic climate, perhaps it is time for the parties within the construction supply chain to engage in open discussions on a case-by-case basis with the specialists in the contract administration and claims disciplines. By doing this, they can devise together bespoke and cost-effective solutions and services to improve these matters from all aspects.

GUEST COMMENTARY

"In our commentary last year, we observed it was 'business as usual' in terms of the type and size of disputes across the Middle East. That is equally true of 2019.

We continue to see a steady stream of more modest size disputes, the value of which reflects the general mid- to large-size projects that have been awarded in recent years. Although relatively lower in value, these disputes are crystallizing and advanced earlier than they would have historically, resulting in a more 'current' portfolio of disputes. Recent larger disputes have tended to originate in KSA, Qatar and from within Iraq.

Following the demise of Carillion in the UK, and the contribution of Middle East debt to that collapse, we expected to see Contractors taking action in relation to the:

•  Recovery of legacy 'tail end' debt (particularly unpaid retentions), and

•  Better management of 'current' levels of debt.

The portfolio of claims that we have seen over the last year appears to be a response to the latter. That is a healthy development; however, the increase in the former has not been as noticeable as we had anticipated. Whatever the reasons, unless action is taken in relation to claims relating to projects that were concluded (or terminated) after the Global Financial Crisis, they will shortly be at risk of being statute barred.

While arbitration remains the primary choice for dispute resolution across the Middle East, greater care and attention still needs to be taken to ensure that well-drafted Arbitration Agreements are incorporated into contracts so as to avoid challenges to jurisdiction and cases being referred to the local courts as a result.

Overall, claims management appears to have been tighter over the last year with a willingness to escalate matters to a formal dispute more quickly than in recent years."

MARK BLANKSBY
Partner, Projects & Construction - Clyde & Co. (UAE)