EXCLUSIVE: Qatar blockade delays will cause years of construction litigation

06 June 2017

Contractors expected to invoke force majeure clauses to avoid being penalised by project owners

The delays to projects in Qatar caused by the blockade imposed by neighbouring Saudi Arabia and three other countries are expected to result in a spate of litigation that could rumble on for years.

On 5 June, Saudi Arabia, Bahrain, the UAE and Egypt said they would close land, sea and air access to Qatar after accusing Doha of fuelling instability in the region.

The blockade means contractors working in Qatar will not be able to receive deliveries of materials and equipment across the country’s only land border with Saudi Arabia.

Contractors say about 50 per cent of materials are trucked into Qatar from Saudi Arabia, and without these supplies they will be unable to complete jobs. “We are waiting for one more delivery next week by truck for a project we are close to completing,” said an international contractor speaking to MEED on 5 June. “Without those materials we cannot finish the job.”

Staff and workers travelling from Saudi Arabia, the UAE, Bahrain and Egypt will also be affected by the severing of direct flights.

Qatar is in the midst of preparations for football’s Fifa 2022 World Cup and the value of ongoing construction and transport schemes affected is $47bn, according to regional projects tracker MEED Projects.

Contractors affected by delays caused by the blockade are expected to invoke the force majeure clause in their deals so that they are not penalised by project owners. “I have already had discussions with contractors and consultants on delays and force majeure clauses,” says an international consultant working in Qatar.

Such claims are likely to be met with little sympathy from project owners in Qatar that over the past few years have developed a reputation for taking a tough stance with contractors when it comes to entertaining claims. “Lawyers will spend thousands of billable hours on interpretation,” says a regional contractor working in Doha.

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