Case Study

Institutional Mediation Resolves a Road Construction Dispute Exceeding SAR 5 Million Within 12 Days

Dispute Value

SAR 500000

Construction and infrastructure disputes involving payment claims may benefit from institutional mediation.In this matter, the dispute concerned a road construction and asphalt project between Al Zulfi and Al Ghat, valued at over SAR 5 million. The Saudi Center for Commercial Arbitration appointed Prof. Dr. Turki Al-Tayyar, Founder of Atyar Advocates and Legal Consultants, as a neutral mediator.Despite ongoing court proceedings and initial resistance to settlement, mediation concluded within 12 days with an amicable settlement accepted by the parties.

Case at a Glance

Nature of the Dispute

Road construction and asphalt works

Project Value

More than SAR 5 million

Dispute Resolution Method

Institutional mediation

Appointing Institution

Saudi Center for Commercial Arbitration

Duration of Mediation

12 days

Outcome

Amicable settlement reached by mutual consent

Background of the Dispute

The dispute arose from a road and asphalt construction contract in the Al Zulfi–Al Ghat area, concerning financial entitlements arising from project execution.After one party commenced court proceedings, the parties turned to institutional mediation through the Saudi Center for Commercial Arbitration, which appointed Prof. Dr. Turki Al-Tayyar as a neutral mediator.Despite initial resistance to settlement, the mediation focused on narrowing the disputed issues and addressing the parties’ legal and commercial interests, concluding within 12 days with an amicable settlement.

Nature Project

Road & Infrastructure Project

Type Contract

Construction contract

Subject Dispute

Project Payment Entitlements

Project Location

Al Zulfi – Al Ghat

Nature of the Mediation and Construction Dispute

The matter concerned a construction dispute arising from road and asphalt works, involving financial claims connected with project execution after the dispute had already progressed to litigation

The mediation process involved analysing the parties’ positions and underlying interests, identifying the core areas of disagreement, and reopening negotiations in a structured manner.

Reviewing the nature of the construction contract
Identifying the financial claims in dispute.
Analysing each party’s position.
Assessing the effect of the pending court proceedings.
Identifying areas of agreement and disagreement.
Conducting mediation sessions.

Facilitating communication between the parties
Identifying shared commercial interests.
Evaluating alternatives to continued litigation.
Exploring possible settlement structures
Developing the settlement framework.
Concluding the dispute by mutual agreement.

Essential Elements of the Dispute

Construction Contract

Understanding the contractual obligations governing the roadworks project.

Financial Entitlements

Identifying the basis of the claims arising from execution of the works.

Existing Litigation

Taking into account that court proceedings had already commenced before the mediation succeeded.

Commercial Interests

Assessing what each party could realistically achieve through settlement compared with continued litigation.

Institutional Mediation

Managing a structured mediation process under the auspices of the Saudi Center for Commercial Arbitration.

Amicable Settlement

Reaching a consensual resolution without imposing a judicial or arbitral determination on either party.

Key Legal Challenges

Initial Resistance to Settlement

The mediation began with both parties taking firm positions and showing limited willingness to compromise.

Pending Court Proceedings

One party had already commenced litigation, making it more difficult to redirect the dispute toward a negotiated resolution.

Financial Claims Arising from a Construction Project

The dispute involved payment entitlements connected with project execution and contractual performance.

Divergent Assessments of Legal Rights

Each party held a different view of its contractual rights, liabilities, and financial entitlement.

Maintaining Mediator Neutrality

The process required strict neutrality and independence while facilitating substantive negotiations between opposing parties.

Achieving Resolution Within a Short Period

The mediation had to generate meaningful progress and conclude within 12 days.

Our Mediation Strategy

Reframing the Core Dispute

The mediation focused on the central contractual and financial issues rather than allowing peripheral matters to dominate negotiations.

Distinguishing Positions from Interests

The process moved beyond each party’s stated legal position and examined the underlying commercial interests driving the dispute.

Evaluating Litigation Alternatives

The parties were encouraged to consider the time, cost, uncertainty, and commercial consequences of continuing court proceedings.

Maintaining Strict Neutrality

The mediator remained independent and impartial throughout the negotiations.

Building Areas of Common Ground

The process identified issues capable of forming the basis of gradual agreement between the parties.

Converting Agreement into Settlement

The mediation moved from negotiated understanding to a mutually acceptable settlement framework.

Mediation Services Provided

Mediation Management

Organising and conducting the mediation process between the parties.

Dispute Analysis

Identifying the contractual and financial issues underlying the disagreement.

Facilitating Negotiations

Helping reduce the gap between the parties’ respective positions.

Settlement Option Assessment

Evaluating practical alternatives to continued litigation.

Neutral Negotiation Management

Managing the negotiation process independently and impartially.

Amicable Resolution

Assisting the parties in reaching a consensual settlement within a short timeframe.

Experience in Mediation and Construction Dispute Resolution

The team at Atyar Advocates and Legal Consultants has experience in matters involving construction disputes, commercial contracts, road and infrastructure projects, arbitration, mediation, and alternative dispute resolution.The firm’s Founder also has experience acting as a neutral mediator in institutional disputes, including matters in which the appointment is made by specialist arbitration and mediation institutions.

Legal Insight

Mediation does not depend on compelling either party to surrender its rights. Its purpose is to help the parties reassess the dispute in light of their interests, risks, costs, and realistic alternatives.Construction disputes can become lengthy because of the volume of contractual documents, financial claims, and technical issues involved.Where meaningful room for negotiation exists, mediation may provide a more flexible route to resolution.The commencement of court proceedings also does not necessarily prevent the parties from subsequently resolving their dispute through a negotiated settlement.

Legal Value Delivered to the Parties

Resolved a dispute involving a project exceeding SAR 5 million.
Redirected the matter from litigation toward consensual settlement.
Addressed payment claims arising from construction works.
Reduced the time and cost associated with continued court proceedings.
Managed negotiations between parties with opposing positions.
Reached an amicable settlement within 12 days

Legal Team Responsible for This Matter

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Need a Neutral Mediator for a Commercial or Construction Dispute?

If you are involved in a commercial or construction dispute and wish to explore alternatives to continued litigation, Atyar Advocates and Legal Consultants provides experience in mediation, arbitration, commercial contracts, construction disputes, and alternative dispute resolution.

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