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Sun 5 Jun 2016 12:14 PM

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Middle East top for construction disputes in 2015

The Middle East overtook Asia as the region with the highest value of construction disputes in 2015, according to research conducted by Arcadis

Middle East top for construction disputes in 2015
Image for illustrative purpose only. (Getty Images)

The Middle East overtook Asia as the region with the highest value of construction disputes in 2015.

According to Arcadis’s Global Construction Disputes: Don’t get left behind report, the Middle East saw its dispute value increase by almost 7% last year, its highest value since 2011.

The report, which studies the duration, value, common causes, and methods of resolution of construction disputes across the globe, found that disputes in the Middle East accounted for $82m.

Asia ranked in second place at $67m. In North America, the United Kingdom, and Continental Europe, dispute values dipped to an average of $25m.

Commenting on the findings, Craig Beeson, Arcadis’s head of contract solutions in the Middle East, said: “In an economic environment impacted by the oil price, the market continued to see a restriction in decision making within the industry.

“The drove a lack of appropriate delegation to project management consultants and client representatives, thereby prolonging critical commercial decisions and generating cash flow issues related to instructed variations.”

Failure to properly administer the contract held on to the regional top spot as the main cause of construction disputes, followed by poorly drafted or incomplete and unsubstantiated claims.

In the Middle East, the proportion of disputes caused by issues related to joint ventures fell by almost 10% in 2015 to 32.3%.

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