Contractor disputes are among the most frequent, expensive, and disruptive challenges in construction, infrastructure, and energy projects across the MENA region. With the rapid expansion of mega-projects, increased reliance on international contractors, and the use of complex engineering contracts such as FIDIC, EPC, Design–Build, and PPP, disputes have become more intricate and technically demanding.
Contractor disputes often involve:
- delayed payments,
- disagreements over variations,
- subcontractor claims,
- quality and workmanship issues,
- conflicting interpretations of contract terms,
- disputes over quantities or valuations,
- project delays and extension-of-time claims,
- partial or full termination of contract,
- calling of performance or advance payment bonds,
- disputes over responsibility for design or execution errors.
Such disputes can jeopardize the stability of a project, disrupt cash flow, damage business relationships, and lead to significant financial exposure.
LEXARB specializes in contractor dispute arbitration and settlement, providing strategic support to contractors, subcontractors, and employers with a combination of legal expertise, technical insight, and practical industry experience.
Why Contractor Disputes Are So Common
- Complex contract structures and unclear risk allocation
Most major projects today involve:
- multiple layers of subcontracting,
- numerous approval cycles,
- international standards and specifications,
- strict performance and testing requirements,
- complex pricing mechanisms.
Any ambiguity in roles and obligations can easily escalate into conflict.
- Project delays and execution challenges
Delays are the leading cause of contractor disputes.
They may result from:
- late issuance of drawings,
- repeated design changes,
- slow material approvals,
- unexpected site conditions,
- failures in coordination among multiple contractors,
- poor project planning by one party,
- supply chain disruptions.
These delays often lead to:
- claims for Extension of Time (EOT),
- claims for additional costs,
- imposition of liquidated delay damages.
- Payment disputes
These occur when:
- certificates are withheld or delayed,
- employers dispute the quantities submitted,
- subcontractors claim unpaid balances,
- variations are not valued correctly,
- retention amounts become a point of contention.
Payment disputes can halt a project and damage contractor cash flow.
- Variation and change-order disputes
Variations may arise due to:
- updated employer requirements,
- discrepancies between drawings and actual site conditions,
- regulatory changes,
- design errors requiring rework.
Parties often disagree on whether the variation is valid, how much it should cost, and how much time is needed to complete it.
- Quality-related disputes
These involve:
- non-conforming materials,
- defective workmanship,
- issues raised during inspections and testing,
- failures in system performance,
- disputes over responsibility for defects.
- Termination and contract suspension
These disputes are among the most sensitive and damaging:
- wrongful termination,
- termination for convenience,
- suspension of works,
- invocation of performance bonds,
- demobilization claims.
LEXARB frequently handles complex termination-related disputes in major infrastructure and energy projects.
LEXARB’s Contractor Dispute Services
- Comprehensive dispute assessment
LEXARB begins by conducting an in-depth review of:
- the main contract and subcontract agreements,
- correspondence and site records,
- drawings, variation orders, and reports,
- payment histories and certificates,
- delay logs and schedules.
This allows LEXARB to build a clear understanding of liability and strengths of each side’s position.
- Claims management and preparation
LEXARB assists clients with:
- EOT claims,
- disruption and prolongation claims,
- variation and remeasurement claims,
- claims by or against subcontractors,
- claims for additional payment,
- wrongful termination claims.
Each claim prepared by LEXARB is supported by technical analysis, costing documentation, and legal arguments.
- Negotiation and commercial settlement
Not every dispute should reach arbitration.
LEXARB excels in:
- leading negotiation sessions,
- organizing technical discussions,
- structuring commercial settlements,
- drafting settlement agreements,
- preserving business relationships.
Many clients manage to resolve disputes quickly and cost-effectively through LEXARB’s negotiation strategies.
- Arbitration representation
When arbitration becomes necessary, LEXARB provides strong advocacy before:
- ICC,
- LCIA,
- SCCA,
- CRCICA,
- UNCITRAL panels,
- regional construction dispute boards.
LEXARB prepares:
- expert reports,
- technical analyses,
- delay and scheduling evidence,
- legal submissions,
- witness statements,
- hearing presentations.
- Bond protection and injunctions
LEXARB frequently represents contractors facing threats of:
- performance bond calls,
- advance payment guarantee calls,
- retention bond disputes.
The firm acts swiftly to protect the contractor’s financial stability through legal measures and emergency applications when necessary.
- Subcontractor dispute support
Subcontractors often face:
- unfair withholding of payment,
- disputes over variation valuation,
- delays caused by main contractors,
- improper termination.
LEXARB defends subcontractors vigorously to secure their contractual rights.
Case Study: Successful Settlement of a 120 Million USD Contractor Dispute
Project:
Large-scale desalination plant in a Gulf country.
Issue:
The main contractor withheld payments from a subcontractor, claiming delays and non-compliance.
Subcontractor’s position:
- delays were caused by the employer’s late approvals,
- additional works were performed and not paid for,
- quality was fully compliant.
Main contractor’s position:
- subcontractor failed to meet the schedule,
- certain works did not meet specifications,
- quantities claimed were excessive.
LEXARB’s intervention:
- Technical and contractual analysis of executed works.
- Review of approvals and correspondence to establish responsibility.
- Preparation of a comprehensive claim file.
- Negotiation with the main contractor.
Outcome:
- full release of outstanding payments,
- compensation for additional works,
- dispute resolved without arbitration,
- uninterrupted continuation of the project.
Why LEXARB Is the Leading Choice for Contractor Dispute Resolution
- Legal and technical expertise combined
LEXARB understands:
- engineering drawings and specifications,
- contractual structures,
- variation procedures,
- delay analysis and CPM scheduling,
- quality and testing documentation.
This blended expertise leads to stronger, more persuasive legal positions.
- Proven negotiation success
LEXARB has consistently delivered:
- fast and cost-effective settlements,
- avoidance of long arbitration processes,
- preservation of commercial partnerships,
- protection of client finances.
- Deep regional experience
LEXARB works extensively across:
- Saudi Arabia,
- UAE,
- Qatar,
- Bahrain,
- Kuwait,
- Egypt,
- Jordan.
This gives the firm insight into regional contracting practices and dispute patterns.
- Strong focus on risk mitigation
LEXARB helps clients:
- minimize disruption,
- prevent financial instability,
- avoid wrongful bond calls,
- protect project progress,
- reduce exposure to penalties.
LEXARB’s Practical Tips to Avoid Contractor Disputes
- Read every clause of the contract — never rely on assumptions.
- Maintain detailed site records and daily logs.
- Document every change or instruction.
- Follow notice procedures strictly.
- Prepare realistic scheduling and cost forecasts.
- Seek LEXARB’s advice early when risks appear.
Conclusion
Contractor disputes can threaten the success of even the strongest projects.
The key to managing them effectively lies in engaging a legal team with a thorough understanding of the construction industry — legally, commercially, and technically.
LEXARB provides:
- fast dispute analysis,
- expert-backed claim preparation,
- strong negotiation strategies,
- professional arbitration representation,
- effective solutions for contractors and employers alike.
If you are facing a contractor dispute — or want to strengthen your legal position before conflict escalates — contact LEXARB today for a confidential consultation with our construction and arbitration specialists.