8
THE BRIEFING
Arbitration
The Calm Before the Storm MIDDLE EAST
Mark Raymont and Nesreen Osman of Pinsent Masons Middle East say that while the expected deluge of litigation and arbitration proceedings has not, so far, transpired, there are increasing signs that formal claims may be on the way for the Middle East’s construction sector January 2022 | MEConstructionNews.com
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hilst construction projects in the Middle East have been living with the effects of COVID-19 since at least January 2020, there are probably several different reasons for parties holding fire on starting court/arbitration proceedings, including: Lack of funds: Prior to the COVID-19 pandemic, projects in the Middle East were already suffering financially from low oil prices. The pandemic exacerbated the situation and led to even further strain on finances. Parties are therefore actively seeking to avoid - where possible - expending such cash as is available on chasing claims in
lengthy court or arbitration proceedings. Lack of appetite: Analysing delay and disruption claims is not straightforward in the context of COVID-19 claims. There are many reasons for this including the way in which the various protective measures and restrictions were introduced by governments, regulatory authorities and project teams and the ambiguity as to the effect/scope of restrictions which has increased the challenges of establishing loss/ entitlements. In the circumstances, there has so far been a lack of appetite for commencing formal proceedings unless there is no other alternative. Cultural norms of leaving claims to end of project: There is a tendency in the Middle East for claims to be left
