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Galfar wins $7m in legal case against state-owned Haya Water

Haya Contracting has been ordered to pay Galfar Contracting $6.8m in an arbitration case in Oman

Galfar has won another arbitration cases against Haya Water.
Galfar has won another arbitration cases against Haya Water.

Omani contractor Galfar Engineering and Contracting Company has won $6.8m (OMR2.6m), following a legal battle with government-owned Haya Water.

Galfar won an arbitration case against Haya Water, a state-owned company that claims to be a registered trademark of Oman Wastewater Services Company.

The arbitration case was brought before the Omani courts due to a dispute between the contractor and the client over an undisclosed contractual issue related to the construction of the Al Ansab Sewage Treatment Plant. This plant was completed more than a decade ago in 2004, Galfar said.

READ: Contractors may exit the UAE if disputes get worse

The defendant, Haya Water, has been ordered to refund $5.3m (OMR2m) to Galfar, pay all of the contractor's legal fees, and pay the claimant $1.4m (OMR558,535) in accumulated interested backdated from 8 May, 2004. 

Galfar confirmed its arbitration award in a missive on the Muscat Securities Market (MSM) on 2 July.

It is Galfar's second successful second arbitration case against Haya Water this year.

In February 2018, the contractor was awarded $60m (OMR23.1m) in a dispute related to the Al Seeb sewage system, the company said on MSM.

The company has grown increasingly concerned about delayed payments and the closing out of contracts in Oman, following the hit it took to its bottom line in 2017.

Galfar's latest full-year financial results show its revenue declined by 14% year-on-year. At the time of the announcement, its chairman, Majid Salim Said Al Fannah Al Araimi, said "payment delays had significantly impacted the company".

Meanwhile, Galfar has expanded its operations to Kuwait by registering  “a one-person company” in the country, according to the chief executive officer of the Muscat-listed company, Dr Hans Erlings.

Erlings is also a new entrant on Construction Week's Power 100 list, and is ranked 92 out of the most influential business leaders in the GCC.

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Construction Week - Issue 745
Jun 30, 2019