Could you begin by outlining some of the most common features of construction disputes and litigation in the Middle East?
The technical expertise needed to resolve construction claims largely sits with professionals operating in the English language. Generally speaking, this makes arbitration the preferred dispute resolution mechanism, certainly for contractors. Major developers, however – especially those that are government backed – may insist on local courts.
Contracts are typically subject to local laws, which are usually applied to FIDIC forms that are more-or-less customised depending on whether the parties used specialist legal advice in the procurement and tendering process.
The core skills of interpreting the contracts and assembling the factual and expert advice needed to resolve construction disputes will be the same whether you are appearing before arbitrators or the local courts. However, very different skillsets are required to present a case before arbitrators than before Arabic courts. For this reason, I work with King & Wood Mallesons’ specialist in-house Arabic courts team whenever the dispute is being resolved in the courts from the outset, or when there are enforcement disputes following an arbitral award, which is commonplace in the Middle East and Africa (MEA) region.
When it comes to resolving construction claims, national courts in the Gulf tend to lack the specialist knowledge of experienced arbitrators or, for example, London’s Technology and Construction Court. This can mean that technical issues are farmed out to court-appointed experts.
King & Wood Mallesons works with Emirati advocates who have exclusive rights of audience in the courts, but our own lawyers are able to prepare the written Arabic pleadings and also argue before court appointed experts.
Oral advocacy and the cross-examination of witnesses does not feature strongly in the court process. Nevertheless, these are essential skills before arbitrators. Having practised advocacy both before courts and arbitral tribunals all over the world during the last 30-plus years, this is the part of the process that gives me the most professional satisfaction – perhaps second only to negotiating a good settlement or securing a win for a client.
Can a greater legal focus during the design stage help to avoid disputes further down the line?
There is a temptation to be pennywise and pound-foolish by cutting and pasting contracts together without specialist legal expertise. I am a specialist in the casualty end of the business, but I am fortunate to have colleagues – not only here, but in London, Singapore, Hong Kong, China, and Australia – who will help clients to ensure that their contracts are clear and that risk is allocated properly and sensibly. These factors are vital, as is diligent contract administration.
On occasion, clients – more so developers than contractors – will look to address front-end aspects by instructing lawyers to assist in the preparation of various template agreements for their use. Unfortunately, however, in doing so, they tend to apply knowledge acquired from historic projects that have gone awfully wrong. In some of these cases, lawyers continue to act for the clients throughout the lifecycle of the project in a legal and contractual project-counsel role, tackling legal, contractual, technical, and operational issues as they arise.
Failing to keep contemporaneous records and serve notices in a timely manner can cost a contractor or an employer dearly. Very often, these disciplines may be culturally uncomfortable – say for a Chinese contractor working for a major Saudi Arabian enterprise. It is vital not to bury your head in the sand; you need to spot where disputes are brewing and act quickly to avert them. If you don’t, you’re likely to end up spending time and money on costly arbitration and litigation procedures. Prevention, as they say, is better than cure.
Has the speed of judicial proceedings within the Middle East’s construction sector increased during recent years? If so, what are the reasons for this change?
Arbitration is rarely quick or cheap, and may be followed by a year or more of enforcement litigation. Local court-based litigation takes place on a spectrum ranging from glacial, say in Saudi Arabia, to fairly rapid, in places like Abu Dhabi. In the speedier areas, judiciaries are usually incentivised to process cases swiftly.
Of the courts modelled on the United Kingdom’s common law system, Dubai International Financial Centre (DIFC) has now built up a significant caseload. That said, I have not seen much evidence of contractors or clients opting to have construction claims resolved directly before the court, as opposed to seeking enforcement of awards there.
Qatar has similar courts, but they have a way to go to catch up with DIFC’s caseload. Bahrain, meanwhile, has opted for an interesting hybrid of litigation and arbitration, and is well served by its local legal community – international firms being thinner on the ground.
Abu Dhabi will be the next entrant into the synthetic common law model. The Emirate has saved itself the trouble of codifying common law by borrowing from English common law – in a similar way to markets like Hong Kong and Singapore.
To what extent does technology play a role in construction contract law and litigation?
Delay and disruption claims require an advanced and complex science of contingencies, and computer methodology has become essential. There are some extraordinarily complex – and for now, expensive – tools coming online. If deployed effectively, they can facilitate lawyers with the craft of convincingly demonstrating why their clients are right. That said, after watching the US election cycle, you’d be forgiven for concluding that genuine stupidity is advancing more rapidly than artificial intelligence.
What are the pressures and challenges of being a construction lawyer in Dubai, a city with some of the highest-value disputes in the world?
I came to this region in 2009 and started, what was then, SJ Berwin’s Dubai office; we have been known as King & Wood Mallesons since November 2013. Initially, I was working from my kitchen table with one employee, who was the daughter of the head of MI6. Luckily, I never needed her father’s help. Even so, it was an exciting time.
Due to the importance of the built environment, construction has progressively become a bigger part of my workload. My background has mainly been in international shareholder disputes, as well as fraud, asset-tracing, and corruption cases. In my first two years in Dubai, I spent 180 nights – or six months – sleeping on aeroplanes; on several occasions, going straight from the plane to either a court or an arbitration hearing. I also took several trips to go to court in the Seychelles. These excursions weren’t as glamourous as they sound, particularly when you consider I was flying there and back within 24 hours.
Construction disputes are less peripatetically demanding, but the combination of understanding the laws of the Gulf whilst deploying them before arbitrators, DIFC courts, and local courts has been as professionally challenging as it has rewarding. I have come to acquire great respect for the detailed, scientific, forensic, and practical skills that my more technically specialised colleagues possess.
Have you ever opposed a company that you later represented as a client?
I have been representing clients in the Middle East since the 1980s, and one feature of local culture that I have always loved as a litigator is that if you do a really tough job opposing somebody, they may well want you on their side the next time. This situation is more prevalent amongst my clients and opponents in the Middle East than in any other part of the world. It is also rather more rewarding than death threats, which I’ve received a couple of times when working outside of this region.
What is the most common cause of complaints and disputes in the Middle East’s construction sector?
In a word, ‘delay’. If you’re a contractor, this means that your money is late. If you’re a developer, it means that your building is late. The culture of blame is more visible in the construction industry than one might imagine. Not invariably, but for the most part, matters of quality represent a sideshow, and are used as leverage in terms of how much money goes where.
How do you think construction lawyers are perceived by Middle East governments and the general public?
I think that construction lawyers – particularly those who do the non-contentious work – are regarded as trusted professionals who are a lot closer to the coalface than their counterparts in other industries. I come from a rather different background; I enjoy being a ‘hired gun’ and a problem solver.
How would you summarise your role as a construction lawyer?
Litigation strategy is more of an art than a science, yet its application to technical construction disputes calls for a peculiar marriage of the two. Essentially, it requires practitioners to tell a highly compelling story to make cash go from A to B – or to stop it from doing so, depending on whose side you’re on. That may sound facile, but it’s true.
Tim Taylor QC of King & Wood Mallesons is a solicitor advocate who acts for major corporates, financial institutions, sovereign states, and parastatals.
