{"id":2540,"date":"2026-03-18T17:11:23","date_gmt":"2026-03-18T17:11:23","guid":{"rendered":"https:\/\/tccons.ae\/blog\/?p=2540"},"modified":"2026-03-20T05:26:11","modified_gmt":"2026-03-20T05:26:11","slug":"when-the-world-shifts-what-construction-parties-must-do-right-now","status":"publish","type":"post","link":"https:\/\/tccons.ae\/blog\/when-the-world-shifts-what-construction-parties-must-do-right-now\/","title":{"rendered":"When the World Shifts What Construction Parties Must Do Right Now"},"content":{"rendered":"

\"When<\/p>\n

When the World Shifts<\/h3>\n

Geopolitical disruption doesn’t wait for your project to reach a convenient milestone. It arrives mid-contract, mid-programme, and mid-cashflow \u2014 and it tests the quality of your contracts, your records, and your commercial relationships simultaneously.<\/p>\n

We are at one of those moments again. Across the GCC, developers, contractors, and project teams are asking the same questions: Are we protected? What are our obligations? What can we actually recover \u2014 and what will we lose if we don’t act now?<\/p>\n

This is a practical guide. Not legal advice. But the kind of grounded, experience-based perspective that should be on every project desk right now.<\/p>\n

\"When<\/p>\n

Force Majeure: Widely Cited, Rarely Understood<\/h3>\n

The first thing that happens during any period of global disruption is that the words ‘force majeure’ start appearing in emails. Often within days. Usually without a clear understanding of what they actually mean.<\/p>\n

Under FIDIC 1999 (Clause 19) and FIDIC 2017 (Clause 18), force majeure is a tightly defined mechanism \u2014 not a general escape hatch. For an event to qualify, it must satisfy all of the following:<\/p>\n\n\n\n\n\n\n\n
Requirement<\/strong><\/td>\nWhat it means in practice<\/strong><\/td>\n<\/tr>\n
Beyond the party’s control<\/strong><\/td>\nThe event must be genuinely external \u2014 not caused or contributed to by the claiming party<\/td>\n<\/tr>\n
Unforeseeable at time of contract<\/strong><\/td>\nIf the risk was known or reasonably foreseeable when the contract was signed, FM will not apply<\/td>\n<\/tr>\n
Unavoidable in its effects<\/strong><\/td>\nThe party must have taken all reasonable steps to mitigate \u2014 passive acceptance is not enough<\/td>\n<\/tr>\n
Not attributable to the other party<\/strong><\/td>\nThe event cannot be something the other party caused or is responsible for under the contract<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
Notice must be given within 14 days of becoming aware of the event. That window is not negotiable.<\/em><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

More importantly, a contractor who waits weeks\u00a0 or worse, months, \u00a0before invoking force majeure is likely to find that entitlement has already been undermined procedurally, regardless of the merit of the underlying event.<\/p>\n

And clients should understand this equally clearly: a force majeure notice does not automatically entitle the contractor to additional money. Under most FIDIC forms, the default position provides time relief, an extension of time, but not cost recovery. Cost recovery under force majeure requires specific contractual language, and GCC-amended contracts frequently alter the standard FIDIC position. Check your contract. Do not assume.<\/p>\n

What UAE and KSA Law Says<\/h3>\n

The contractual clause does not operate in isolation. Statutory law sits behind it, and in some circumstances, provides rights that the contract alone may not.<\/p>\n\n\n\n\n\n\n\n
UAE \u2014 Federal Law No. 5 of 1985 (Civil Transactions Law)<\/strong><\/td>\n<\/tr>\n
Article 273: Where performance becomes impossible due to an external cause, the obligation is extinguished.<\/td>\n<\/tr>\n
Where performance is only partially affected, the court may reduce the obligation proportionately.<\/td>\n<\/tr>\n
Article 249: Courts may intervene to reduce an excessive obligation where exceptional unforeseeable circumstances make performance onerous \u2014 even where the event does not meet the full FM threshold.<\/td>\n<\/tr>\n
Practical note: The contractual FM clause and the statutory right overlap but are not identical. Where the contract is stricter, it generally prevails.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n\n\n\n\n
KSA \u2014 Saudi Civil Transactions Law (Royal Decree No. M\/191, 2021)<\/strong><\/td>\n<\/tr>\n
The concept of Quwwat Qahira (overwhelming force) is recognised under Sharia principles.<\/td>\n<\/tr>\n
Tribunals and arbitral panels examine foreseeability closely.<\/td>\n<\/tr>\n
Parties must demonstrate that reasonable steps were taken to mitigate the impact of the event.<\/td>\n<\/tr>\n
Practical note: Where the contract is silent or ambiguous, statutory protections may fill the gap. Take jurisdiction-specific legal advice early \u2014 not after a claim has crystallised.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\"When<\/p>\n

Post-Contract: Where the Real Exposure Lives<\/h3>\n

Force majeure tends to dominate the conversation. But for most projects currently under construction, the more immediate and measurable impact will be felt through the post-contract mechanisms that run every month \u2014 and which many teams are not managing tightly enough.<\/p>\n

Interim Payment Certificates<\/strong><\/p>\n

Material price volatility and supply disruption affect contractor cashflow in ways that quickly translate into site performance. Contractors under financial pressure slow procurement, defer subcontractor payments, and prioritise sites where cash is flowing. If you are a developer or employer, protecting the rhythm of interim payment certification is not generosity, it is project management.<\/p>\n

Under FIDIC 1999, the Contractor submits a payment statement, the Engineer certifies within 28 days, and the Employer pays within 56 days of that certificate. GCC-amended contracts frequently extend these periods to 84 or 90 days. In a disruption period, those extended timelines deserve fresh scrutiny.<\/p>\n

Variations and Change Management<\/strong><\/p>\n

Disruption invariably produces scope changes \u2014 material substitutions, redesign to accommodate alternative supply chains, programme resequencing. Each of these is a potential variation, and each variation is a potential dispute if it isn’t managed through the correct contractual process from the outset.<\/p>\n\n\n\n
Instruction first. Agreed price ideally. What kills variation accounts on distressed projects is the informal instruction that was never formalised, never priced, and surfaces eighteen months later as a disputed claim.<\/em><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Cashflow Forecasting and the Anticipated Final Account<\/strong><\/p>\n

Every cost plan and monthly cost report should now be carrying a live, stress-tested Anticipated Final Account \u2014 with a best case, a most likely, and a worst case. If your cost report is still showing a single AFA figure with no scenario analysis, it is not reflecting project reality.<\/p>\n\n\n\n\n\n\n
AFA Scenario<\/strong><\/td>\nWhat it should capture now<\/strong><\/td>\n<\/tr>\n
Best Case<\/strong><\/td>\nMinimal disruption impact, no force majeure event crystallises, materials procured at tender rates<\/td>\n<\/tr>\n
Most Likely<\/strong><\/td>\n2\u20134 week programme delays, 5\u201310% uplift on disrupted trades, one or two contested variation claims<\/td>\n<\/tr>\n
Worst Case<\/strong><\/td>\nExtended supply chain failure on critical trades, formal FM claim submitted, EOT with prolongation costs pursued<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Claims: What Makes a Valid Claim and What Doesn’t<\/h3>\n

A contractor who experiences genuine disruption has a legitimate story to tell. Whether that story becomes a successful claim depends almost entirely on how it was documented in real time, and whether the contractual machinery was operated correctly.<\/p>\n

Gate 1 \u2014 Notice Compliance<\/strong><\/p>\n

Under Sub-Clause 20.1 of FIDIC 1999, notice must be given within 28 days of the contractor becoming aware of the event giving rise to the claim. Under FIDIC 2017 (Sub-Clause 20.2), this is even more explicit, the time-bar is strict. A claim without a compliant, timely notice faces an immediate jurisdictional challenge. In GCC arbitrations, time-bar arguments are taken seriously and frequently succeed.<\/p>\n

Gate 2 \u2014 Critical Path Demonstration<\/strong><\/p>\n

Not every delay is a delay to completion. A material delivery delayed by three weeks is a delay to completion only if that material is on the critical path and there is no float available to absorb it. Vague claims asserting that ‘project delays were caused by market disruption’ will not survive scrutiny. The contractor must demonstrate, with a credible delay analysis, that the specific event impacted the critical path and directly caused an extension of the contract completion date.<\/p>\n

Gate 3 \u2014 Quantum Substantiation<\/strong><\/p>\n

Even where entitlement and critical path are established, the amount recoverable must be substantiated from actual records \u2014 invoices, daywork sheets, labour allocation records, cost comparisons showing the price differential between what was tendered and what was paid. Estimates and approximations have their place in early claims. They are not sufficient for a final account.<\/p>\n\n\n\n\n\n\n\n
The Employer’s Mirror Obligation<\/strong><\/td>\n<\/tr>\n
Maintain your own independent assessment of contractor claims \u2014 do not simply accept a contractor’s narrative or quantum.<\/td>\n<\/tr>\n
Review each notice, assess entitlement separately from quantum, and maintain a formal claims register with your recommended position against each item.<\/td>\n<\/tr>\n
A claim that isn’t assessed promptly and responded to formally has a habit of growing \u2014 in value and in complexity \u2014 the longer it sits.<\/td>\n<\/tr>\n
Consider whether early commercial engagement and partial agreement on undisputed items reduces overall exposure and dispute risk.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\"When<\/p>\n

Practical Steps: What to Do This Week<\/h3>\n\n\n\n\n\n\n\n\n
If you are a Developer \/ Employer<\/strong><\/td>\nIf you are a Contractor<\/strong><\/td>\n<\/tr>\n
Review active contracts \u2014 confirm force majeure clause wording and notice periods<\/strong><\/td>\nIssue FM or Sub-Clause 20.1 notices now \u2014 do not wait for certainty on quantum<\/td>\n<\/tr>\n
Stress-test your AFA against a 10\u201315% cost escalation scenario on critical trades<\/strong><\/td>\nBegin contemporaneous records from today: affected activities, supply chain correspondence, alternative sourcing attempts<\/td>\n<\/tr>\n
Review long-lead procurement status with contractors: steel, MEP, aluminium cladding, specialist systems<\/strong><\/td>\nIdentify which affected materials sit on your critical path \u2014 this defines the value of any EOT claim<\/td>\n<\/tr>\n
Ensure contingency position is adequate \u2014 post-contract contingency of 2\u20133% may no longer be sufficient<\/strong><\/td>\nSeparate your variation account from your claims register \u2014 each requires a different contractual route<\/td>\n<\/tr>\n
Initiate a proactive commercial conversation before formal notices arrive<\/strong><\/td>\nEngage your commercial team now \u2014 not when the disruption is over<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Uncomfortable Truth<\/h3>\n

Disruption periods are revealing. They expose which projects have robust contract administration and which have been running on goodwill. They show which teams understand their contractual entitlements and which are operating on assumptions that won’t hold under scrutiny.<\/p>\n

The instinct in uncertain times is to wait for the situation to stabilise before making commercial decisions. In construction contracts, waiting usually means losing rights \u2014 through missed notice periods, inadequate records, and claims that could have been strong but are presented too late to be credible.<\/p>\n

The market will stabilise. Projects will continue. But the claims that land on desks in twelve months’ time will be won or lost based on decisions being made \u2014 or not made \u2014 right now.<\/p>\n\n\n\n
Act early. Document everything. Take advice before the clock runs out.<\/em><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

This document is intended solely for the informational purposes of those concerned and should not be relied upon as expert advice in any circumstance without consulting an expert professional. Reproduction or translation of this information is not permitted without explicit written consent from www.tccons.ae.<\/a>.
\nFor additional details, please reach out to info@tccons.ae<\/a><\/em><\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

When the World Shifts Geopolitical disruption doesn’t wait for your project to reach a convenient milestone. It arrives mid-contract, mid-programme, and mid-cashflow \u2014 and it tests the quality of your contracts, your records, and your commercial relationships simultaneously. We are at one of those moments again. Across the GCC, developers,… <\/p>\n

Read more<\/a><\/div>\n","protected":false},"author":1,"featured_media":2545,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[],"class_list":["post-2540","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cost-management"],"acf":[],"yoast_head":"\nWhen the World Shifts<\/title>\n<meta name=\"description\" content=\"Geopolitical disruption doesn't wait for your project to reach a convenient milestone. 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