2026-03-10
Construction disputes rarely start with lawyers.
They start with the market.
A shipment that does not arrive.
Steel prices that suddenly increase.
A project schedule that quietly begins to slip.
Weeks later, the issue becomes a contractual dispute.
Across the Gulf region, construction projects are increasingly exposed to two structural pressures:
- supply chain disruption
- price escalation in key materials
Yet the legal challenge is not simply economic.
The real question is how the contract classifies these events.
Is this:
- a normal commercial risk borne by the contractor?
- an exceptional circumstance disturbing the economic balance of the contract?
- or an exceptional event under FIDIC?
The answer determines everything: entitlement to time, entitlement to money, and sometimes whether a dispute arises at all.
We have recently published a legal paper examining these issues in the context of construction projects in the Gulf region.
The paper explores:
- the legal framework governing economic imbalance in construction contracts
- the limits of force majeure in price escalation disputes
- the role of Article 249 (exceptional circumstances) under civil law systems
- how FIDIC clauses interact with supply chain disruptions
- why many contractor claims fail despite having a strong legal basis
The study also includes practical tools used in real disputes:
- a claim notification timeline
- a contractor decision tree
- a claims preparation checklist
- guidance on negotiation before disputes escalate
The objective is not academic. It is practical: to help contractors, engineers, and project teams understand how market disruptions become legal disputes — and how they can be managed before they reach arbitration.
The full paper is attached below.
I would be interested to hear from others in the industry: How are current supply chain and price escalation risks affecting your projects?
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