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- info@al-tayyar.com.sa
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Case Study
Dispute Value
FIDIC Contract Dispute – SAR 1.9 Billion Project & SAR 1 Billion Claims
SAR 1,900,000,000
Atyar Advocates and Legal Consultants provided legal support in a major SAR 1.9 billion FIDIC-based construction project involving 93 residential buildings and approximately 3,000 apartments.Claims approaching SAR 1 billion arose from delayed payments, additional works, VAT, retention, bank guarantees, completion issues, extensions of time, damages, and prolongation costs.Atyar prepared a 1,000+ page legal study in Arabic and English, developed a comprehensive dispute strategy, and initiated proceedings before the Commercial Court in Riyadh regarding certain claims.
Quick Matter Overview
Contract Value
SAR 1,900,000,000
Value of Claims
Approximately SAR 1,000,000,000
Nature of Contract
Construction contract based on FIDIC
Project Scope
Construction of 93 residential buildings comprising approximately 3,000 apartments
Subject of the Dispute
Outstanding payments, additional works, extensions of time, retention monies, guarantees, and compensation claims
Current Status
Comprehensive legal study and claims strategy completed; certain proceedings have commenced before the Commercial Court in Riyadh and remain ongoing
Background of the Dispute
The matter concerned a major construction contract valued at SAR 1.9 billion for a residential project comprising 93 buildings and approximately 3,000 apartments. During execution, disputes arose regarding delays in approvals and interim payments, additional works, VAT, the final payment certificate, retention amounts, bank guarantees, cancelled works, and claims for damages, extensions of time, and prolongation costs.Atyar Advocates and Legal Consultants conducted a comprehensive review of the contract, amendments, correspondence, payment certificates, technical and financial records, and related documents. The legal team assessed the claims, contractual risks, and prospects of recovery, coordinated with relevant specialists, and prepared a bilingual legal study and structured claims and litigation strategy.
Contract Value
Value of Claims
Approximately SAR 1 billion
Project Size
93 Residential Buildings
Nature of Claims
Financial & Contractual Claims
Nature of the FIDIC Dispute
The matter involved the assessment of numerous claims and alleged breaches arising from performance of the construction contract, including:
- Delayed payment of interim payment certificates.
- Delayed approval of completed works.
- Non-payment for additional works.
- Claims relating to VAT.
- Non-payment of the final payment certificate.
- Non-release of retention monies.
- Assessment of entitlement under the contract and supporting documents.
- Issues concerning the performance or final completion certificate.
- Non-release of the bank guarantee.
- Claims for costs and administrative expenses relating to cancelled works.
- Extension of time claims.
- Prolongation and additional cost claims.
- Claims for damages and losses.
Essential Elements of the Dispute
FIDIC Contract
Reviewing the contractual provisions governing the project and identifying the parties’ rights, obligations, claims mechanisms, variation procedures, and time-related provisions.
Payment Certificates and Outstanding Amounts
Analysing interim and final payment certificates and identifying amounts claimed to remain unpaid for completed works.
Additional Works
Assessing works performed outside or in addition to the original scope and evaluating the contractual basis for payment.
Extension of Time and Prolongation Costs
Analysing delay events, responsibility for delay, and the basis for claims relating to extensions of time and associated costs.
Retention Monies and Bank Guarantees
Reviewing retention sums and bank guarantees and assessing the contractual conditions governing their release.
Compensation and Final Claims
Evaluating claims for losses, damages, additional costs, cancelled works, and other amounts arising from the alleged contractual breaches.
Key Legal Challenges
Scale of the Contract and Claims
The contract value was SAR 1.9 billion, while the claims approached SAR 1 billion. This required each claim to be analysed independently and connected to the relevant contractual provisions, facts, and supporting documents.
Multiple Categories of Claims
The dispute was not limited to a single payment issue. It involved payment certificates, additional works, retention monies, guarantees, extensions of time, prolongation costs, and compensation claims, each requiring a separate legal and evidentiary basis.
Extensive Documentary Record
The project generated a substantial volume of contracts, correspondence, minutes, payment certificates, technical records, financial documents, and emails. The legal team therefore had to establish a structured methodology for reviewing and linking the evidence to each claim.
Delay and Time-Related Analysis
Extension of time and prolongation claims required detailed assessment of delay events, responsibility for those delays, and their impact on project duration and cost.
Integration of Legal, Technical, and Financial Issues
The matter involved significant overlap between contractual, engineering, technical, and financial issues. This required coordination between the legal team and relevant external specialists.
Developing a Strategy for Multiple Proceedings
The scale and complexity of the claims required a structured approach to determine which claims should be advanced first, what procedural route should be adopted for each, and how to maintain consistency across multiple proceedings.
Our Legal Strategy
Comprehensive Review of the Contract and Project Record
The legal team reviewed the FIDIC contract, amendments, payment certificates, meeting minutes, correspondence, emails, and technical and financial project documents.
Classification and Analysis of Claims
The claims were divided into distinct categories, including payment certificates, additional works, retention monies, guarantees, extensions of time, and compensation.
Formation of Dedicated Legal Teams
The matter was handled through both internal and external workstreams, with specialist expertise engaged where necessary to address the technical and sector-specific aspects of the claims.
Preparation of a Comprehensive Legal Study
A detailed legal study exceeding1,000 pageswas prepared in Arabic and English. The study addressed the contractual, judicial, regulatory, Sharia, and claims aspects of the matter.
Development of a Claims and Litigation Strategy
The team identified legal strengths, risks, alternative options, and appropriate procedural routes for the various claims.
Commencement of Judicial Proceedings
Based on the findings of the legal study and claims strategy, proceedings were commenced before the Commercial Court in Riyadh in relation to certain claims, while other aspects of the dispute continue to be managed.
Legal Services Provided
Legal Advice
Providing advice concerning the FIDIC contract, financial claims, contractual breaches, and available legal options.
Comprehensive Legal Study
Preparing a detailed assessment of the contract, project record, claims, and the client’s legal position.
Litigation
Managing the disputes and proceedings arising from the project claims.
Representation Before Courts and Competent Authorities
Representing the client in judicial and procedural matters connected with the project.
Drafting Legal Memoranda
Preparing legal memoranda, responses, and submissions concerning the various claims and disputes.
Drafting Pleadings
Preparing statements of claim, procedural applications, and other pleadings required for the relevant proceedings.
Legal Insight
Major FIDIC disputes should not ordinarily be treated as a single financial claim.They often consist of multiple interrelated claims, each with its own contractual basis, evidentiary requirements, and financial consequences.Early legal assessment is particularly important where claims involve delays, additional works, retention monies, guarantees, and prolongation costs, because the legal strength of each claim depends on identifying its contractual basis and linking it to the relevant project record.A structured claims strategy can also help determine priorities, select the appropriate procedural route, and avoid inconsistencies between positions advanced in different proceedings.
Legal Value Delivered to the Client
- Analysed a construction contract valued at SAR 1.9 billion.
- Evaluated claims approaching SAR 1 billion.
- Prepared a bilingual legal study exceeding 1,000 pages.
- Identified the client’s legal position, strengths, and potential risks for each category of claim.
- Developed an integrated claims and litigation strategy.
- Commenced proceedings concerning certain claims before the Commercial Court in Riyadh.
The Firm’s Experience in FIDIC and Major Construction Disputes
Atyar Advocates and Legal Consultants provides legal services in major construction disputes and FIDIC-based projects, including analysis of contractual obligations, payment certificates, variations, additional works, retention monies, and bank guarantees.The firm’s services also include assessment of extension of time claims, prolongation costs, damages, and other financial consequences arising from alleged contractual breaches.For complex projects, the firm prepares detailed legal studies, develops claims and litigation strategies, drafts pleadings and legal memoranda, and represents clients before the competent courts and authorities.
Legal Team Responsible for This Matter
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
- Real Estate Dispute Resolution
- Property Ownership Claims
- Litigation Before the General Courts
- Investment Disputes
- Government Contracts and Administrative Matters
- Compensation Claims
Need Legal Support in a FIDIC or Major Construction Dispute?
If your company is involved in a major construction project and faces claims relating to payment certificates, variations, additional works, delays, extensions of time, retention monies, bank guarantees, or compensation, Atyar Advocates and Legal Consultants provides legal studies, claims management, litigation strategy, drafting, and representation before courts and competent authorities throughout Saudi Arabia.
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بيانات الاتصال
- شارع التخصصي، النخيل، الرياض 12384
- 3132 شارع الأمير تركي، الكورنيش، 6309, الخبر
- Info@al-tayyar.com.sa
- 00966555398969
مجالات الممارسة
القانون التجاري والشركات
صياغة العقود والوثائق القانونية
القانون المالي والمصرفي
الضرائب والزكاة والجمارك
العقارات والملكية الخاصة
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