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Arbitration cases to increase by mid-2017

There will be an increase in arbitration cases in the GCC construction sector from mid-2017 due to tightening liquidity in the region

Expert believes more arbitration cases will come to light by mid –year.
Expert believes more arbitration cases will come to light by mid –year.

There will be an increase in arbitration cases in the GCC construction sector from mid-2017 due to tightening liquidity in the region, an expert said on Tuesday.

Sadique Mohd, head of legal, China State Construction Engineering Corporation (CSCEC), told Construction Week during a round table at DIFC courts in Dubai that he believes more arbitration cases will come to light by mid –year, a trend that will continue to at least 2019.

“The peak of arbitration cases I think for most lawyers was 2012-2013 off the back of the 2008 financial crisis. Unfortunately I am beginning to see this again,” said Mohd.

Though he added that the variety of the disputes have increased, cases due to payment issues are the most prevalent.

“I can imagine that dispute lawyers will get very busy soon,” he said.

Though cases have started to arise in the last two years, many are just starting to surface, he added. “I am currently handling 4-6 major arbitration cases, which have already been filed. There are unfortunately a couple more on the horizon.”

Mohd said he believes the construction market will continue to face challenges this year, but that he expects the market to pick up by 2018, fueled by development in preparation for the Expo 2020 and other events.

“The unique thing about the GCC [construction sector] is that cycles are very short, meaning that if it goes down, it goes down for a short period of time before [picking up again],” he said. “It is a 2-4 year cycle, whether it’s a good time or not so good time.”

Though CSCEC is transitioning towards a more developer role this year, it will continue to work on major transport and infrastructure projects in collaboration with the Dubai Roads and Transport authority and others.
 

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