Introduction: Why Water Project Disputes Require Specialized Arbitration Expertise
Water infrastructure—especially desalination plants, wastewater treatment facilities, transmission pipelines, pump stations, and water management networks—is central to the economic and social stability of countries across the Middle East, Africa, and Asia.
Saudi Arabia, the UAE, Qatar, Egypt, Oman, and Kuwait, among others, invest billions of dollars annually in:
- reverse osmosis (RO) desalination plants,
- seawater cooling systems,
- water transmission networks,
- mega-scale wastewater treatment plants,
- public–private partnership (PPP) water projects,
- utility modernization and digital water management.
Because of the immense engineering complexity and financial stakes, disputes in the water sector frequently escalate to international arbitration. These disputes involve:
- performance failures,
- water quality deviations,
- membrane or equipment malfunction,
- delays in commissioning,
- variations and scope expansion,
- contractual uncertainties,
- regulatory compliance issues.
LEXARB specializes in resolving these disputes through expert legal representation, technical understanding, and strategic arbitration advocacy tailored to the unique challenges of water and desalination projects.
- The Nature of Disputes in Water and Desalination Projects
Water projects involve multiple layers of engineering, procurement, construction, testing, regulatory approvals, and long-term operations. As a result, disputes commonly occur in several areas.
- Desalination Plant Disputes (RO, MSF, MED)
Reverse Osmosis (RO) plants are now the dominant technology in the GCC.
Disputes often revolve around:
- membrane fouling or premature failure,
- energy consumption levels exceeding design guarantees,
- production capacity below contractual thresholds,
- inconsistent permeate quality,
- high salinity rejection issues,
- startup and commissioning delays,
- seawater intake system failures,
- pre-treatment inefficiencies.
In MSF (Multi-Stage Flash) and MED (Multi-Effect Distillation) plants, disputes may relate to:
- thermal performance shortfalls,
- corrosion,
- scaling issues,
- evaporation chamber defects.
- Water Transmission Pipeline Disputes
Large-scale pipelines (often hundreds of kilometers long) face disputes relating to:
- pipe joint failures,
- pressure testing deficiencies,
- right-of-way delays,
- geotechnical risks,
- valve and pump station failures,
- corrosion protection issues,
- GIS integration disputes.
- Wastewater Treatment Plant (WWTP) Disputes
These involve:
- effluent quality discrepancies,
- biochemical oxygen demand (BOD/COD) inconsistencies,
- equipment performance failures (blowers, aeration systems),
- odor control system failures,
- SCADA and automation issues,
- delays in achieving performance guarantees.
- PPP & Concession Water Project Disputes
Common areas of conflict include:
- tariff adjustment disagreements,
- cost recovery issues,
- penalties for non-performance,
- revenue-sharing disputes,
- renegotiation triggered by regulatory changes,
- asset handover disagreements.
- Disputes Between Government Entities and EPC Contractors
Given the strategic importance of water security, disputes involving ministries, utilities, and EPC contractors can be particularly complex.
- Why Arbitration Is the Preferred Mechanism for Water Sector Disputes
- Technical Complexity Requires Specialized Arbitrators
Water project disputes involve:
- chemical engineering,
- marine engineering,
- membrane technology,
- hydraulic modeling,
- energy systems,
- civil and MEP engineering.
Only arbitration allows parties to appoint decision-makers with relevant expertise.
- Confidentiality Protects Sensitive State Infrastructure
Water infrastructure is critical national infrastructure. Arbitration protects:
- security-sensitive documents,
- government risk assessments,
- operational data,
- pricing and tariff arrangements.
- Cross-Border Infrastructure Requires a Neutral Forum
Desalination and water projects frequently involve:
- EPC contractors from Europe or Asia,
- financiers from the Gulf,
- equipment suppliers from the US or Japan,
- regulatory authorities from the host country.
Arbitration offers a neutral and enforceable solution.
- Flexibility in Managing Multi-Party Disputes
Water projects involve:
- contractors,
- subcontractors,
- suppliers,
- consultants,
- operators,
- regulators.
Arbitration allows multi-party consolidation and flexible procedures.
- How LEXARB Manages Water Project Arbitration
LEXARB brings a unique combination of legal, engineering, and sector-specific insight.
- Early Evaluation of Technical and Legal Factors
LEXARB assesses:
- the root cause of performance failures,
- compliance with notice provisions,
- entitlement to extensions of time,
- regulatory obligations,
- environmental constraints,
- impact on commercial operation dates (COD),
- quantification of damages.
- Coordination with Technical Experts
Water disputes require expert input from:
- desalination specialists,
- chemical and process engineers,
- hydraulic modelers,
- marine engineers (for intake/outfall),
- geotechnical experts,
- energy modeling specialists.
LEXARB works closely with these experts to build a defensible technical narrative.
- Preparation for Institutional and Ad Hoc Arbitration
LEXARB represents clients before:
- ICC,
- LCIA,
- SCCA,
- DIAC,
- CRCICA,
- UNCITRAL tribunals.
Our role includes:
- drafting claims and defenses,
- leading document production,
- examining expert witnesses,
- presenting technical models,
- preparing time-impact analysis (TIA) reports,
- managing multi-language documentation.
- Negotiation and Early Dispute Resolution
Before full arbitration, LEXARB pursues:
- commercial negotiation,
- mediation,
- DAB/DAAB submissions (for FIDIC-based contracts),
- executive-level settlement dialogue.
Many water disputes settle once technical evidence is properly organized and presented.
- Enforcement of Arbitral Awards
LEXARB assists in:
- enforcing awards in foreign jurisdictions,
- overcoming sovereign immunity challenges,
- negotiating post-award settlements.
- Case Study: Successful Arbitration in a Reverse Osmosis Desalination Plant Project
A major contractor was accused of failing to meet guaranteed permeate quality and production capacity in a large RO facility.
LEXARB’s strategy included:
- Demonstrating that membrane fouling was due to intake water conditions, not equipment design.
- Providing evidence that the pre-treatment system design revisions were delayed by the consultant.
- Developing a performance model proving that operational parameters were outside the contractor’s control.
- Negotiating from a position of technical strength.
Outcome:
- The contractor avoided penalties exceeding USD 60 million.
- A revised operations protocol was agreed.
- Arbitration was concluded without damaging the ongoing relationship.
- Anecdote: One SCADA Log Entry Changed the Entire Dispute
In a dispute about pump station performance, the employer argued that the pumps were undersized, causing pressure loss.
While reviewing SCADA logs, LEXARB discovered a single timestamped entry showing:
“Bypass valve opened automatically due to operator override.”
This proved:
- the pressure drop resulted from operator intervention,
- not pump capacity.
The employer immediately shifted position, allowing a rapid settlement.
- Why Clients Trust LEXARB for Water and Desalination Arbitration
✔ In-depth sector knowledge (RO, MSF, MED, wastewater, pipelines)
✔ Ability to understand complex engineering and water chemistry issues
✔ Strong experience with EPC, DB, PPP, and concession contracts
✔ Multilingual capability: English, Arabic, French, Russian
✔ Proven success in resolving disputes involving government entities and utilities
✔ Strategic negotiation that reduces costs and preserves project continuity
✔ Ability to manage technical experts and voluminous documentation
LEXARB delivers precise, high-level dispute resolution for one of the world’s most sensitive and essential infrastructure sectors.
Conclusion: Arbitration Is Essential for Managing Water Infrastructure Disputes — LEXARB Delivers Strategic, Technical, and Legal Excellence
Water and desalination projects involve critical national infrastructure, highly specialized engineering, and multi-million-dollar risks.
LEXARB provides the expertise needed to:
- resolve disputes efficiently,
- protect commercial interests,
- preserve operational continuity,
- and achieve enforceable outcomes.
If you are involved in a dispute relating to desalination plants, water treatment, pipelines, or water management infrastructure, contact LEXARB for a confidential consultation.
Our arbitration specialists will guide you with clarity, precision, and sector-specific expertise.