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Alternative Dispute Resolution

Conflict seems to be an inherent part in international oil and gas projects. There has hardly been a project in which the parties agreed on all the issues that presented itself during the execution of the project. Some of those conflicts are minor and can be solved quickly. Some other conflicts are harder to solve and potentially lead to financial disadvantages of either party. If such disadvantage becomes to big and cannot be solved by negotiation, a party might want to explore further dispute resolution options. While there are a number of different options available, arbitration seems to be the most common one. This is rather unfortunate since arbitration is an option that is usually chosen at the end or after the project was completed.


I prepared a paper looking into several different aspects of arbitration including:

  • – Contract provisions for efficient dispute resolution
  • – International arbitration basics
  • – Arbitration institutes
  • – The involvement of the courts
  • – Arbitration cost considerations


If you are interested in reading the full paper, just drop us an email via our contact page. Please fill „Dispute Resolution“ into the subject line.

Are Global Claims Permissible?

During project execution claims management (change/variation order management) seldom receives the focus it should and project documentation is usually far from perfect. When the project comes to an end contractor usually find themselves struggling with cash flow problems and cost overruns caused by delay and disruption events. Contractor trying to get late claims accepted face two problems. First, a claim must be timely and it mist be properly substantiated. Bringing in a claim 6 month after the delay event occurred is usually difficult. Contractors therefore often resort to a Global Claim.


So, what exactly is a Global Claim? While there are numerous definitions of what represents a global claim, the SCL Delay and Disruption Protocol (2002, p. 56) defines a global claim in the following way:  

“A global claim is one in which the Contractor seeks compensation for a group of Employer Risk Events but does not or cannot demonstrate a direct link between the loss incurred and the individual employer Risk events.”

A Global Claim is a permissible vehicle for a contractor to get compensated for additional time and cost in case of proving actual entitlement the traditional way is impossible. I have taken a look at the recent case of Walter Lilly v Mackay in which Judge Akenhead extensively commented on Global Claims. This case made clear that, if condition precedence is complied with, there is a place for global claims even if cause and effect are difficult or impossible to establish. Essentially, contractors are being given a cautious green light to advance global claims if they comply with the qualifications set out by Judge Akenhead. But if a claimant aims for a successful global claim, proving the entitlement on the balance of probabilities and, if possible, the nexus between loss and cause is still a burden the contractor has to fulfill.


If you are interested in reading the full paper, just drop us an email via our contact page. Please fill “Global Claims” into the subject line.


Opinion on Delay Analysis Method

Disruption and delay seems to be of major importance in today’s construction world. Market pressure requires contractors not only to accept projects with insufficient profit margin but often requires them to price incomplete tenders with a lump sum price and complete the projects in the shortest possible period. For several different reasons this often leads to delays and disruptions caused by either party. If such disruptions or delays occur, the methodology of analyzing it is of major importance. The simple reason behind this is the desire to find an approach  accepted in arbitration and litigation.


I have done some research and compared a number of cases from the last 2 decades in order to identify a methodology that is accepted by the courts and arbitrators. The only common denominator I could identify was that whatever methodology is used, it must be based on facts and common sense. It does not seem that there is a generally acceptable format or methodology recommended for a delay analysis. The below table shows the outcome of the research project.
Case  Time Impact Analysis  Collapsed As-Built  As-Built Critical Path  As-Planned v As-Built  Impacted As-Planned  Common Sense Analysis 
McAlpine v McDermott        X    X 
John Baker v London Portman Hotel          X  X 
Balfour Beatty v Lambeth      X      X 
Skanska v Egger             X 
Mirant v Ove Arup   X          X 
London Underground v Citylink             X 
City Inn v Shepherd         X    X 
Walter Lilly v Mackay            X 


If you are interested in reading the full paper, just drop us an email via our contact page. Please fill „Delay analysis method“ into the subject line.