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Case Study

Commercial Arbitration in a Construction and Supply Dispute Relating to a Waterfront Development Project Valued at More Than SAR 5 Million

Dispute Value

SAR 5,000,000

A dispute arose between two construction companies under a subcontract and materials supply agreement for a waterfront development project in Yanbu, valued at over SAR 5 million, with claims exceeding SAR 2 million.A multi-member arbitral tribunal was constituted by the competent Commercial Court of Appeal, with Prof. Dr. Turki Al-Tayyar serving as a tribunal member.After approximately one year of proceedings, the dispute concluded with an amicable settlement between the parties within the arbitration framework.

Case at a Glance

Nature of the Dispute

Subcontracting and materials supply

Contract Value

More than SAR 5 million

Claim Value

More than SAR 2 million

Type of Arbitration

Multi-member arbitral tribunal

Duration

Approximately one year

Outcome

Dispute settled amicably within the arbitration proceedings

Background of the Dispute

The dispute arose from a subcontract and materials supply agreement for a waterfront development project in Yanbu, involving dewatering works, payment entitlements, completed works, and supplied materials.An arbitral tribunal was constituted by the competent Commercial Court of Appeal in the Eastern Region, with Prof. Dr. Turki Al-Tayyar serving as a tribunal member and participating in the review of the parties’ submissions and evidence.The proceedings ultimately concluded with an amicable settlement between the parties within the arbitration process.

Arbitration dispute involving subcontracting and material supply for a waterfront development project in Yanbu

Contract Type

Subcontract and materials supply agreement

Project Location

Yanbu

Scope of Works

Dewatering, water-removal works, and materials supply

Final Position

Settlement within arbitration

Nature of the Arbitration and Construction Dispute

The matter concerned an arbitration arising from a subcontract and materials supply agreement for a waterfront development project, involving financial claims and competing documentary evidence submitted by both parties.

The arbitral process required review of the project scope, completed works, supplied materials, alleged contractual breaches, payment entitlements, and the evidentiary strength of each party’s case.

  • Reviewing the subcontract.
  • Analysing the project scope.
  • Reviewing dewatering works.
  • Reviewing water-removal obligations.
  • Assessing materials supply obligations.
  • Analysing alleged contractual breaches.
  • Reviewing project execution records.
  • Evaluating the parties’ evidence.
  • Analysing payment claims.
  • Reviewing written submissions and defences.
  • Participating in the arbitral proceedings.
  • Bringing the dispute to an amicable settlement.

Essential Elements of the Dispute

Subcontract

Determining the scope of works and obligations allocated to each party.

Materials Supply

Reviewing the supply obligations, quantities, and associated payment entitlements.

Completed Works

Assessing the works performed and their conformity with the contractual requirements.

Contractual Breach

Analysing each party’s allegations of non-performance or defective performance.

Financial Entitlements

Reviewing claims exceeding SAR 2 million and linking them to completed works and supplied materials.

Evidentiary Record

Weighing the competing documents and evidence submitted by both parties.

Key Legal Challenges

Strong Evidence on Both Sides

Each party relied on documents and evidentiary materials supporting its own position, making comparative assessment of the evidence central to the dispute.

Multiple Contractual Components

The matter involved subcontracted works, materials supply, and payment for execution, resulting in several interrelated obligations and claims.

Technical Nature of the Works

The dispute involved dewatering and water-removal works within a waterfront development project, adding a technical dimension to the contractual analysis.

Determining Payable Works

It was necessary to distinguish between works actually performed, amounts contractually due, and amounts disputed by the parties.

International Element

The dispute involved a party with an international connection, adding a cross-border dimension to the contractual and arbitral framework.

Combining Adjudication with Settlement

The proceedings required the tribunal to manage the dispute while preserving the possibility of a consensual resolution between the parties.

Our Arbitration Approach

Analysing the Contract and Scope of Works

The process began with identifying the contractual obligations relating to subcontracting and supply.

Separating the Financial Claims

Claims relating to executed works and supplied materials were assessed separately and matched with the relevant evidence.

Neutral Assessment of Evidence

The documents submitted by both parties were reviewed according to their relevance and evidentiary weight.

Linking Technical Performance to the Contract

The technical works were analysed by reference to the contractual obligations governing them.

Structured Tribunal Deliberation

The submissions and evidence were considered within the framework of the duly constituted multi-member arbitral tribunal.

Supporting a Consensual Resolution

The arbitral process continued until the parties were able to conclude the dispute by settlement.

Arbitration Services Provided

Participation in the Arbitral Tribunal

Serving as a member of a tribunal constituted pursuant to a judicial appointment decision.

Contract Review

Analysing the subcontract and materials supply arrangements.

Evidence Assessment

Reviewing the documents supporting the parties’ competing claims and defences.

Claims Analysis

Assessing payment entitlements, work charges, and the value of supplied materials.

Arbitral Case Management

Participating in the review of submissions, defences, and the procedural conduct of the arbitration.

Dispute Resolution

Contributing within the tribunal to a process that concluded with an amicable settlement.

Outcome of the Arbitration

The arbitration proceeded through review of the contract, project execution records, materials supply, financial claims, and the evidentiary submissions of both parties.According to the supplied case information, the arbitral tribunal successfully brought the dispute to an amicable settlement between the parties.The parties accepted the settlement reached within the arbitration process, thereby concluding a dispute arising from a contract valued at more than SAR 5 million and claims exceeding SAR 2 million.

Legal Insight

Construction arbitrations become particularly complex where both parties present apparently strong documentary evidence supporting their respective positions.In such matters, the analysis should not be limited to the volume of documents. Each item of evidence should be assessed by reference to the contract, the scope of work, actual performance, and the specific financial claim in dispute.Arbitration also does not prevent the parties from reaching a settlement during the proceedings. A negotiated resolution can be an effective outcome where it follows a clear understanding of the parties’ legal positions and the risks of continuing the dispute.

Legal Value Delivered to the Client

  • Managed a dispute arising from a contract exceeding SAR 5 million.
  • Considered claims exceeding SAR 2 million.
  • Assessed competing documentary evidence.
  • Addressed a technically complex construction and supply dispute.
  • Participated in a judicially constituted arbitral tribunal.
  • Concluded the dispute through an amicable settlement accepted by the parties.

Nature of the Arbitration and Construction Dispute

The dispute concerned a subcontract and materials supply agreement for a waterfront development project in Yanbu, with claims relating to work charges, supplied materials, and alleged contractual breaches.

A multi-member arbitral tribunal was constituted to hear the matter, and the proceedings ultimately concluded through settlement.

  • Reviewing the contract.
  • Analysing the subcontract scope.
  • Reviewing dewatering works.
  • Reviewing water-removal works.
  • Analysing materials supply.
  • Identifying alleged contractual breaches.
  • Reviewing the evidence.
  • Analysing the claims.
  • Reviewing written submissions.
  • Participating in the arbitral proceedings.
  • Assessing the parties’ positions.
  • Concluding the dispute through settlement.

Legal Team Responsible for This Matter

Dr. Turki altayyar

Prof. Dr. Turki Al-Tayyar

Founder and Managing Partner, and an expert in the judiciary, legal practice, arbitration, and university education, with more than 25 years of combined experience.

Mr. Salem Saad Al-Dosari

Partner specialising in administrative contracts, investment, and litigation, with extensive experience in administrative and commercial cases.

Practice Areas Related to This Matter

Need Legal Support in Construction Arbitration or a Supply Dispute?

If you are involved in a dispute concerning subcontracting, materials supply, infrastructure works, or a commercial agreement with an international element, Atyar Advocates and Legal Consultants provides experience in arbitration, construction disputes, contract analysis, claims review, and alternative dispute resolution.

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