Introduction
Commercial construction is one of the fastest-growing sectors across the Middle East, driven by booming real estate markets in Saudi Arabia, the UAE, Qatar, and Egypt. From corporate office towers and logistics hubs to retail centers, hotels, mixed-use developments, and large residential communities, commercial construction projects have become increasingly complex, high-value, and time-sensitive.
With this rapid expansion comes a rise in legal and engineering disputes involving:
- developers and main contractors,
- subcontractors and suppliers,
- design consultants and project managers,
- investors, landlords, and tenants.
Because these projects operate under strict delivery deadlines and involve significant financial commitments, commercial construction arbitration has become the preferred method for resolving disputes efficiently and confidentially.
LEXARB has built a strong reputation in representing commercial developers, contractors, and investors in arbitration proceedings across major regional and international forums. We combine legal precision, engineering insight, and business-oriented strategy to achieve favorable outcomes for our clients.
Why the Commercial Real Estate Sector Relies on Arbitration
- Tight delivery schedules and financial exposure
Commercial properties are linked directly to revenue generation.
Delays in:
- opening a mall,
- handing over residential units,
- launching a hotel,
- commissioning an office tower,
can result in:
- loss of rental income,
- breach of investor commitments,
- penalty payments,
- reputational damage.
Arbitration provides a faster and more specialized venue to resolve such issues.
- Multi-party contractual structures
A typical commercial construction project involves:
- a developer,
- a main contractor,
- multiple subcontractors,
- a design and supervision consultant,
- a project management team,
- international suppliers,
- financiers or investment partners.
This layered structure often generates overlapping responsibilities and conflicting interpretations of contract obligations—creating ideal conditions for arbitration.
- Need for confidentiality
The real estate sector is extremely sensitive to:
- investor confidence,
- market perception,
- tenant relations,
- valuation impacts.
Arbitration ensures disputes are resolved privately and professionally, avoiding public litigation.
- Ability to appoint technical and legal experts
Arbitration allows the parties to select:
- arbitrators with construction experience,
- engineering, delay, and quantum experts,
- specialists familiar with FIDIC, EPC, and commercial real estate contracts.
Common Disputes in Commercial Construction Projects
- Delay and late delivery claims
These include:
- late design submissions,
- delays in approvals,
- slow performance by subcontractors,
- material shortages and supply-chain disruptions,
- failure to meet contractual milestones.
- Defects and quality disputes
Frequent issues include:
- structural defects,
- façade failures,
- waterproofing and insulation issues,
- HVAC malfunctions,
- acoustic and finishing defects,
- non-compliance with building codes.
- Variation order disputes
These are among the most common disputes in real estate projects.
Examples:
- changes requested by investors or anchor tenants,
- upgrades in finishes,
- redesign of MEP interfaces,
- modifications to retail or office layouts.
- Financial disputes
Including:
- unpaid invoices,
- remeasurement disagreements,
- withheld retention,
- claims for loss of profit,
- increased costs due to delay,
- disputes over escalation and inflation.
- Consultant vs. contractor liability
These disputes center around:
- design errors,
- conflicting or unclear drawings,
- lack of supervision,
- approval delays,
- inaccurate IFC documentation.
- Contract termination and bank guarantee issues
Often the most contentious disputes:
- wrongful termination,
- termination due to cashflow problems,
- improper calling of performance bonds,
- disputes involving demobilization costs.
LEXARB’s Role in Commercial Construction Arbitration
- Comprehensive legal and technical assessment
LEXARB conducts a deep review of:
- contracts and amendments,
- drawings, specifications, and engineering reports,
- project schedules,
- notices, correspondence, and site instructions,
- change orders and claims,
- defect reports and testing results,
- financial evaluations.
This forms the backbone of a solid arbitration strategy.
- Preparing claims and defenses with strong evidentiary support
LEXARB prepares:
- delay and disruption claims,
- variation order claims,
- claims relating to defective work,
- financial and quantum claims,
- defenses to employer claims,
- counterclaims for termination-related damages.
Every submission is supported by technical analysis and expert evidence.
- Representation before leading arbitration institutions
LEXARB represents clients before:
- ICC,
- LCIA,
- SCCA,
- DIAC,
- CRCICA,
- UNCITRAL tribunals.
We have handled commercial real estate disputes exceeding USD 300 million, involving:
- towers and skyscrapers,
- mixed-use developments,
- hospitality and retail projects,
- large residential compounds.
- Negotiation and settlement expertise
Because delays in commercial projects have immediate financial consequences, LEXARB focuses on:
- early intervention,
- identifying commercial pressure points,
- designing tailored settlement solutions,
- leveraging expert findings,
- protecting long-term business relationships.
Many disputes are resolved without a full arbitration hearing.
- Supporting government real estate agencies
LEXARB advises government developers in:
- evaluating contractor responsibility,
- resisting inflated claims,
- correcting contractual frameworks,
- preparing procurement models for future projects,
- managing disputes in public–private developments.
- Protecting private developers and investors
We help secure:
- rights under development agreements,
- protections against wrongful termination,
- recovery of damages,
- defense against unjustified penalties,
- proper valuation of additional works.
Case Study – Arbitration in a USD 180 Million Commercial Development
Project:
A large retail and business center in a Gulf state.
Dispute:
The contractor missed the handover date.
The contractor argued that the delay was caused by major design revisions requested by the consultant and investors.
LEXARB’s intervention:
- Detailed analysis of revised drawings and timelines.
- Full CPM delay analysis.
- Appointment of an independent engineering expert.
- Representation in arbitration under SCCA rules.
Outcome:
- Consultant found responsible for 60% of delays.
- Contractor compensated for additional costs.
- Dispute resolved within 8 months, preventing project stagnation.
LEXARB’s Strategies for Minimizing Commercial Construction Disputes
- Document every change order immediately.
- Issue contractual notices without delay.
- Never execute additional work without written approval.
- Conduct technical reviews before implementing design changes.
- Maintain transparent communication with stakeholders.
- Use structured project controls and record-keeping.
Why LEXARB Is the Top Choice for Commercial Construction Arbitration
- Deep understanding of real estate and commercial construction markets
- Legal + engineering + financial expertise combined
- Successful record in multimillion-dollar disputes
- Strong reputation with major developers and investors
- Proven ability to resolve disputes efficiently and confidentially
Conclusion
In today’s competitive and rapidly developing real estate environment, disputes are inevitable—but costly delays and commercial disruptions do not have to be.
LEXARB offers sophisticated arbitration and negotiation solutions tailored specifically for commercial construction and real estate projects.
Our team ensures your contractual rights are fully protected and your project stays on track.
If your commercial construction or real estate project is facing a dispute—or if you want proactive legal support—contact LEXARB today for a confidential consultation with our arbitration experts.