This year could be one of the most fractious ever for the region’s major companies, as state-owned firms once considered untouch-able come under pressure from disgruntled investors and partners.

The decision by the US’ Dow Chemical Company and Kuwait’s state-owned Petrochemicals Industries Company to pursue arbitration hearings over their failed $17.4bn K-Dow joint venture is simply the latest dispute to come to light.

Dow wants $2.5bn in compensation after Kuwait’s Supreme Petroleum Council cancelled the deal in December 2008.

Elsewhere, creditors of Nakheel, part of the state-owned Dubai World, considered legal action against that company in December 2009, in anticipation of a default on the company’s $3.5bn Islamic sukuk. In the end, the debt was paid off by Abu Dhabi and the need for legal proceedings disappeared.

Other government-owned companies are also in dispute. In December Abu Dhabi Investment Authority filed an arbitration claim against the US’ Citigroup as it sought to recoup $4bn from a disastrous $7.5bn investment in the bank in November 2007, shortly before the banking crisis struck. Citigroup says the claim is without merit.

These wrangles are sobering for state-owned companies that previously might have considered themselves immune from such alter-cations. But as Gulf states take on more international business partners, they will have to get used to the international rules and scrutiny that come with the territory.

In the short term, the only winners will be the lawyers, but ultimately all investors will be better off if these disputes promote greater corporate transparency and result in contracts that are clearly enforceable when things go wrong.