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Saudi Arabia launches engineering dispute resolution centre

The new service by Saudi Council of Engineers will focus on arbitration and alternative dispute resolution tools

Saudi Council of Engineers has launched an engineering dispute resolution centre [representational image].
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Saudi Council of Engineers has launched an engineering dispute resolution centre [representational image].

Saudi Council of Engineers, a professional body for engineers in Saudi Arabia, has launched a dispute resolution and arbitration centre.

Established through Decree No. M/34, the facility will provide arbitration services and related supported services of relevance to the construction sector.

Chairman of Saudi Council of Engineers’ board, Saad Al-Shahrani, said the centre would serve as an independent entity in the organisation, and aim to train engineering professionals in the field of arbitration.

The new section will also provide and secure supporting requirements for arbitration, and work with other similar dispute resolution centres to improve practices, in addition to implementing policies and adopting amendments or new procedures.

Secretary general of Saudi Council of Engineers, Farhan Al-Shammari, said the centre would foster a culture of competent engineering arbitration, serving different sections across ministries, judicial departments, government institutions, corporate firms, public- and private-sector outfits, and workers in the engineering sector.

According to SPA, the centre will also introduce expert arbitrators and oversee the delivery of technical consultations, in addition to holding training courses covering arbitration, engineering disputes, and alternative dispute resolution mechanisms.

The launch of Saudi Arabia’s latest dispute resolution authority comes as construction activity heats up in the kingdom, which has more than 5,000 active projects worth well over $819bn (SAR3tn).

Experts say contractors tend to price more competitively in Saudi Arabia, with the “aggressive approach to tendering” having the potential to create long-term challenges for the local industry.

Nabeel Ikram, partner at Hogan Lovell’s, told Construction Week in October 2018 that contractors working in Saudi Arabia must familiarise themselves with local laws to avoid long-running construction disputes.

“You have to look at what form of contract is being used – it will suit both parties if they have one that they are both comfortable with,” Ikram said at the time.

“You really have to look at the payment cycle terms too, and what rights you are afforded. Under Saudi law, you haven’t actually got a right to suspend [work] if you haven’t been paid. In other parts of the Middle East, you can suspend [but] that is not the case in Saudi. That makes [the process] that much more difficult.”

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Construction Week - Issue 764
May 31, 2020