Frequently Asked Questions

It is advisable to involve a specialized lawyer when there are serious indications of a dispute, contractual breach, or potential financial claim. Early involvement of a lawyer helps assess the legal position, preserve evidence, and manage correspondence and procedures before the dispute escalates.

The assessment involves reviewing the facts, contracts, correspondence, documents, and evidence, then determining the legal basis of the claim, the available evidence and its weight, potential defenses, procedural risks, and enforceability before determining the most appropriate dispute resolution strategy.

This varies depending on the nature of the dispute. Documents typically include the contract and its appendices, purchase orders, invoices, correspondence, meeting minutes, notices of claim, proof of payment or performance, and any document supporting the facts underlying the claim.

Jurisdiction is determined in accordance with the applicable statutory rules, taking into consideration the nature of the dispute, the status of the parties, and the subject matter of the claim, as well as the existence of an arbitration agreement or any other matter affecting the competent forum.

This depends on the nature of the claim, the contract, and the relevant statutory or contractual requirements. A notice may be necessary to establish the claim or trigger a contractual or statutory effect. Therefore, it should be reviewed before taking judicial action.

A company may establish its financial claims against another company through contracts, invoices, payment certificates, correspondence, acknowledgments, and other relevant evidence.

Yes. Digital correspondence and emails constitute forms of digital evidence under the Saudi Evidence Law. Their evidentiary value varies depending on their source, how they were created, and whether their authenticity can be verified. Accordingly, they should be preserved in their original form and with their full context.

The process begins by reviewing the contract, the basis of the amount due, the supporting documents, and the reasons for non-payment. The appropriate course of action is then determined, whether through a formal demand, negotiation, litigation, or arbitration, as applicable.

Yes. A company may engage a technical, accounting, or engineering expert to assess the matter and support its understanding of the technical aspects. The court may also appoint an expert where resolving the case requires a technical opinion on a particular matter.

No. As a general rule, an expert’s opinion does not bind the court. The court may adopt all or part of it or disregard it, while stating the reasons where required. The parties may also agree in advance to accept the expert’s report in accordance with the applicable statutory requirements.

Complex cases require establishing a chronological timeline of events, categorizing documents by subject matter and claim, identifying agreed and disputed facts, and linking each claim or defense to the supporting evidence in order to save the parties’ time and effort.

Yes. The commencement of judicial proceedings does not prevent the parties from exploring settlement. Any settlement offer may be evaluated in light of the strength of the legal position, the value of the claim, the expected duration and costs, enforceability, and commercial considerations.

The principal amount of the underlying right should be determined separately from compensation or additional claims. The legal basis, calculation method for each amount, and supporting documents should also be reviewed.

Generally, yes. Compensation may be claimed where its requirements are satisfied and the damage and its causal connection to the breach can be established, subject to the contract, applicable law, and the nature of the damage claimed.

The company should immediately identify the applicable procedural deadlines, preserve documents, review the contract and correspondence, analyze the claims, evidence, and potential defenses, and avoid making unconsidered admissions or responses.

It begins by understanding the opposing party’s claims and grounds, then identifying procedural and substantive defenses, counter-evidence, and any counterclaims, and prioritizing the issues according to their impact on the dispute.

The counterclaim should be assessed in terms of its legal basis, value, supporting evidence, and connection to the existing dispute, after which the appropriate procedural method for bringing it should be determined.

It is important to preserve contracts, correspondence, invoices, meeting minutes, and relevant electronic data, prevent their deletion or alteration, and document the source, dates, and context of the documents.

The judgment’s operative part, reasoning, and legal effects are reviewed, followed by determining the available methods of appeal, their deadlines and requirements, and whether there are legal grounds justifying an appeal.

A judgment establishes a right or obligation, while enforcement aims to give practical effect to the judgment and recover the awarded amount or entitlement. Therefore, enforceability and the debtor’s assets should be considered from the stage of assessing the dispute.

An arbitration agreement is an agreement between the parties to refer an existing or potential dispute to arbitration. Under the Saudi Arbitration Law, an arbitration agreement must be in writing; otherwise, it is invalid.

Yes. If a claim is filed before a court concerning a dispute covered by an arbitration agreement, and the defendant invokes the arbitration agreement before submitting any request or defense in the case, the court must rule that the case is inadmissible.

If the defendant submits any request or defense before invoking the arbitration agreement, the right to rely on the arbitration agreement is deemed waived, and the court may continue hearing the dispute despite the existence of the arbitration clause.

Arbitration may be appropriate for high-value, international, or technically complex disputes, or where the parties wish to appoint specialized arbitrators, adopt procedures suited to the nature of the dispute, or maintain a degree of confidentiality and keep the dispute away from public proceedings.

Yes. An arbitration agreement may be concluded before or after a dispute arises, and even after court proceedings have commenced, provided that the matters covered by the agreement are identified when the agreement is concluded after the dispute has arisen.

In institutional arbitration, an arbitration institution administers the proceedings in accordance with established rules. In ad hoc arbitration, the parties and the arbitral tribunal have greater responsibility for organizing and administering the proceedings.

The selection depends on the nature and value of the dispute, the location of the parties, the institution’s rules and fees, its experience, expedited and emergency arbitration mechanisms, and its suitability for the transaction.

The seat of arbitration determines legal consequences relating to the applicable legal framework and judicial supervision of the arbitration. Hearings, however, may be held elsewhere or remotely in accordance with the parties’ agreement and the applicable rules.

The effect depends on the type of agreement:

• Arbitration Clause: Where the contract contains an arbitration clause, the court must rule that the case may not be heard if the defendant invokes the clause before submitting any request or defense; otherwise, the right to rely on it is waived.
• Foreign Jurisdiction Clause: An agreement granting jurisdiction to a foreign court does not deprive Saudi courts of jurisdiction where international jurisdiction is vested in them under the law, in accordance with Saudi Supreme Court Decision No. (431413).

The parties may agree on the language of arbitration. In the absence of an agreement, arbitration subject to Saudi law shall be conducted in Arabic unless the arbitral tribunal determines otherwise. The language of the contract and documents, as well as that of witnesses and experts, should be taken into consideration when selecting the language.

This depends on the value, complexity, and technical nature of the dispute, the volume of documents, costs, and expected duration of the proceedings. A sole arbitrator may be more suitable for disputes of lower value or complexity, while a three-member tribunal may be more appropriate for large or complex disputes. In all cases, the number of arbitrators must be odd under the Saudi Arbitration Law.

Consideration should be given to the arbitrator’s independence and impartiality, experience in the relevant type of dispute and industry, arbitration experience, language skills, availability, and familiarity with the applicable law or subject matter of the dispute.

The matter should be assessed in light of the arbitrator’s disclosure obligations and duties of independence and impartiality. An application to challenge the arbitrator may be made where the applicable grounds exist under the law and relevant rules.

The arbitral tribunal decides objections relating to its jurisdiction, including objections concerning the existence, validity, expiry, or scope of the arbitration agreement, in accordance with the Arbitration Law.

Yes, where the applicable rules permit it. The Saudi Center for Commercial Arbitration Rules provide for an emergency arbitrator mechanism to consider urgent measures before the tribunal is constituted.

Yes. The Saudi Center for Commercial Arbitration Rules include expedited procedures that generally apply where the total value of the dispute does not exceed SAR 4 million. The parties may agree to apply them to higher amounts. Separate procedures for small claims not exceeding SAR 200,000 also came into force in August 2026.

The method of presenting evidence is governed by the applicable rules and procedural orders issued by the tribunal. It may include documents, witness statements, expert reports, and examination of experts during hearings. The Arbitration Law also permits the tribunal to appoint one or more experts.

Confidentiality should not be assumed to be absolute in every arbitration. Its scope depends on the applicable law, institutional rules, the parties’ agreement, and the nature of the documents and proceedings.

Yes. The parties may reach a settlement during the proceedings, with the effect of the settlement on the arbitration, costs, and the manner in which the settlement is documented being addressed in accordance with the applicable rules.

No. An arbitral award is not subject to an ordinary appeal through which the merits of the dispute are reconsidered. It may instead be challenged through an action to set aside the award on the grounds specified in the Arbitration Law.

If the losing party does not voluntarily comply with the arbitral award, the successful party may apply to the competent court for enforcement, submitting the arbitral award, arbitration agreement, and other documents required by law. Once the court verifies that the enforcement requirements have been satisfied and that no impediment to enforcement exists, it issues an enforcement order, and the award is enforced against the losing party’s assets in accordance with the applicable procedures.

The process begins by reviewing the contract, payment certificates, completion or acceptance certificates, correspondence, and reasons for non-payment, then determining the amount due and the contractual procedures required to claim it.

Each element of the claim should be analyzed against the contract, scope of work, instructions, payment certificates, and actual project records. The accepted and disputed portions should then be identified, together with the basis for objecting to each disputed amount.

They help determine the work performed, approved and paid amounts, retained amounts, and the development of the financial account. However, they must be considered together with the contract, variation orders, correspondence, and other project documents.

This depends on the contract, stages of completion and acceptance, the defects liability period, and any conditions precedent to releasing the retained amount. Therefore, the due date cannot be determined without reviewing the contract.

The claim begins by identifying the original scope of work, then establishing the additional works, the basis on which they were instructed, their cost, and their time impact. The pricing structure of the construction contract and its provisions, as well as any statutory or contractual requirements for approving the increase, must also be considered.

Not necessarily. However, the absence of a written variation order may materially weaken the claim. Entitlement depends on the contract, pricing structure, evidence of the instruction or authorization for the variation, and agreement on the additional payment where required. The Civil Transactions Law contains specific provisions governing increases in remuneration in certain lump-sum construction contracts.

This depends on the cause of the delay, the allocation of risks under the contract, the event’s impact on the schedule, and compliance with notice requirements and procedures for establishing the effect on the completion date.

The delaying events, their dates, the parties responsible for them, and their relationship to the project schedule and affected activities should be identified. The claim should be supported by records, correspondence, and updates demonstrating the impact of each event.

Concurrent delay refers to the overlap of more than one cause of delay during the same or closely related period, where the causes may be attributable to different parties. Its assessment requires a chronological analysis of the contract, schedule, and facts rather than simply establishing that two events occurred at the same time.

The contract terms, the contractor’s responsibility for the delay, any entitlement to an extension of time, and the relevant contractual procedures must be considered. Where Saudi law applies, agreed compensation is also subject to the provisions of the Civil Transactions Law, which permits adjustment in circumstances specified by law.

An extension of time grants the contractor additional time to complete the works. Prolongation or disruption costs relate to the financial consequences of extending the project duration, resource disruption, or reduced productivity. Depending on the contract, facts, and evidence, one may be recoverable without the other.

Works may be suspended where the contract or law permits it, such as where the other party commits a material breach that prevents continued performance, subject to the notices, cure periods, and procedures specified in the contract. Suspending works without a contractual or legal basis may constitute a breach and result in liability for the resulting damages.

An employer may terminate the contractor’s contract where a contractual or statutory ground for termination exists, such as a material breach, delay in performing the works, or unjustified suspension of the works, subject to any notice or cure period required by the contract. Termination without a valid reason or without following the agreed procedures may expose the employer to liability for resulting damages.

A contractor may suspend the works or terminate the contract where a contractual or statutory ground exists, such as a material breach by the employer, failure to pay amounts due, or prolonged suspension of the works, as applicable. Before taking either action, the contractor must comply with the notices, cure periods, and procedures specified in the contract; otherwise, the suspension or termination may be considered unlawful.

A defects claim begins with notifying the responsible party of the defect and documenting it, followed by determining its cause, the manner in which it violates the contract or specifications, and the party responsible for it. The contractor should be given an opportunity to remedy the defect where required. If the defect is not remedied, the contractual remedies may be pursued, including remedying the defect at the contractor’s expense and claiming the associated costs and damages, as applicable.

This depends on the cause of the defect and the allocation of responsibility under the contract, including whether the defect resulted from execution, design, materials, the employer’s instructions, or another cause, as well as the applicable warranties and statutory liabilities.

The contractor should act immediately to review the guarantee, the contract, the basis of the demand, the nature of the guarantee, and any available legal remedies, as calling the guarantee may have an immediate financial impact that may be difficult to reverse later.

The relationship between the employer and the main contractor must be distinguished from the relationship between the main contractor and the subcontractor. Under the Civil Transactions Law, the main contractor remains responsible to the employer, and a subcontractor may not directly claim payment from the employer except where permitted by law, such as in cases of assignment.

The review covers the original contract value, variations, payment certificates, payments made, retention amounts, deductions, claims, compensation, and any settlements, in order to determine the parties’ final financial position.

These include baseline schedules and updates, daily and weekly reports, correspondence, instructions, meeting minutes, photographs, labor and equipment records, variation orders, payment certificates, and cost documentation.

They are international standard contractual forms issued by FIDIC to regulate various types of construction and engineering projects, including the allocation of design and execution responsibilities and risks, as well as claims and dispute management.

The 2017 suite introduced significant developments in claims management, notices, the role of the Engineer, and Dispute Avoidance/Adjudication Boards compared with the 1999 editions. The applicable edition must be identified precisely because the mechanisms for claims and dispute resolution differ between them.

The primary distinction relates to design responsibility, the nature of project execution, and risk allocation:

• Red Book: Generally associated with Employer-designed projects.
• Yellow Book: Associated with contractor design and construction.
• Silver Book: Associated with EPC/Turnkey projects involving a different allocation of risks.

The appropriate FIDIC form is selected based on the nature of the project, scope of work, party responsible for design, method of determining and paying the contract price, allocation of responsibilities and risks, and the mechanisms for contract administration and supervision.

It may be used as a contractual basis, but the Particular Conditions, nature of the project, Saudi laws, and risk allocation should be reviewed before adoption, as modifications may be necessary to adapt the standard form to the project.

The General Conditions establish the standard contractual framework, while the Particular Conditions are used to introduce project-specific data, provisions, and amendments. Their consistency with the remaining contract documents must be carefully verified.

Because amendments may transfer significant risks from one party to another or change the mechanisms governing payment, notices, claims, extensions of time, termination, and dispute resolution, resulting in an actual risk allocation that differs from the standard form.

Contract Data contains project-specific information that supplements the General Conditions, such as certain periods, amounts, and specified contractual information. It should therefore be checked for completeness and consistency with the Particular Conditions and the other contract documents.

Many rights and claims under FIDIC contracts require notice to be given within a specified period and in the manner prescribed by the contract. Failure to comply may, in certain circumstances, result in the loss of entitlement to an extension of time or compensation and other amounts due.

A Notice of Claim must be submitted within 28 days from the date on which the claiming party became aware, or should have become aware, of the event or circumstance giving rise to the claim. The Particular Conditions should be reviewed to confirm that this period or the notice procedure has not been amended.

Failure to submit a Notice of Claim within the prescribed period may result in the claim being treated as time-barred or otherwise affecting the claiming party’s entitlement. However, FIDIC 2017 provides a mechanism for addressing late notices, under which the claiming party may provide reasons for the delay in the detailed claim. Depending on the circumstances, consideration may also be given to the extent of prejudice suffered by the other party and whether it had prior knowledge of the relevant event or circumstance. Accordingly, the contract, Particular Conditions, and procedures followed by the parties should be reviewed before concluding that the claim is barred.

It is a claim that goes beyond the initial notice and sets out the contractual basis, facts, supporting details and documents, and the time or financial impact of the claim in accordance with the requirements of the applicable edition.

The Engineer exercises the powers granted to it under the contract, which may include issuing instructions, administering aspects of the works, issuing certificates and assessments, and making determinations on matters provided for in the contract.

It is a contractual process through which the Engineer evaluates or determines certain matters and claims in accordance with the mechanism set out in the contract. It differs from a decision of a dispute board or an arbitral award.

The variation mechanism specified in the applicable edition must be followed, including documenting the instruction, scope of the variation, valuation, and time impact. Where the Engineer is responsible for administering variations, it should be verified that the relevant action was taken by the person having the contractual authority to do so.

Relevant records generally include the baseline programme and updates, daily records, correspondence and notices, instructions, progress reports, records of resources and relevant events, and any time analysis linking the event to the completion date.

This depends on the applicable edition. The FIDIC 2017 suite reorganized the claims of both parties within a more aligned and detailed framework compared with earlier editions. Therefore, the applicable edition and Particular Conditions must be reviewed.

Both are boards established to assist in resolving disputes arising during project execution:

• DAB (Dispute Adjudication Board): Under the 1999 FIDIC contracts, its role primarily focused on deciding disputes referred to it.
• DAAB (Dispute Avoidance/Adjudication Board): Under FIDIC 2017, its role was expanded to include a preventive function aimed at helping the parties avoid disputes before disagreements develop into formal disputes.

It is a formal notice of dissatisfaction used in circumstances specified by the contract, including objections to certain determinations of the Engineer or decisions of the DAAB, depending on the relevant stage and provisions. It must be submitted in the prescribed manner and within the specified period to preserve the right to proceed to the next stage.

FIDIC forms generally provide for a multi-stage mechanism for managing claims and disputes, which may include an Engineer’s determination, a dispute board, and a period for amicable settlement before arbitration. However, the Particular Conditions may modify this process, so the final executed version of the contract must be reviewed.

The pre-signing stage is the primary opportunity to define rights and obligations, allocate risks, and address unclear or unbalanced provisions before they become binding or give rise to a dispute.

A bespoke contract may be necessary when the transaction is complex, high-value, or long-term, or involves specific risks, regulatory requirements, or obligations that a general template does not adequately address.

It is not recommended to do so without review. The template may contain provisions designed for a different legal environment or mechanisms that are inconsistent with Saudi laws or the manner in which the contract will be performed in the Kingdom.

To ensure that the signatory has the authority to represent the contracting party and enter into the transaction, thereby avoiding subsequent disputes concerning the scope of authority or the validity of the obligation created.

The scope of work should be clearly and comprehensively defined, including the contractor’s required works, technical specifications, each party’s responsibilities, exclusions, completion periods, acceptance requirements, and what is included in the contract price. A clear mechanism should also be established for additional works and changes to the scope, including their effect on the contract price and completion period.

The payment clause should specify:

1. The contract price or method of calculation and currency.
2. Payment due dates, conditions, and approved bank account.
3. Invoice submission and approval requirements, and responsibility for bank and transfer fees.
4. Treatment of exchange-rate differences, and any deductions or retention amounts.
5. Handling of disputed amounts, and consequences of late payment.

Because unregulated changes are among the most common causes of disputes over price and time. The contract should therefore specify who may request a change, how it is approved, how its cost is determined, and its impact on the completion period.

• Performance Obligations: Define what each party must do to perform the contract, such as supplying products, providing services, or completing works within the agreed timeframe.
• Contractual Warranties: Concern assurances regarding the quality, safety, or conformity of works, products, or services with specified requirements, and the remedies resulting from failure to meet those requirements, such as repair, replacement, or compensation, as provided in the contract.

The provision should clearly identify the circumstances in which one party must indemnify the other, the damages, losses, and claims covered by the indemnity, the persons covered, the procedures for making an indemnity claim, and the extent to which it is subject to any agreed limitations of liability, in accordance with the applicable law.

In principle, the parties may contractually regulate the scope and limits of liability, subject to statutory restrictions and the nature of the obligation. Under contracts governed by Saudi law, an agreement to exclude liability for fraud or gross negligence is not valid in circumstances regulated by the Civil Transactions Law.

The provision should identify the obligation whose delay triggers the agreed compensation, the amount or calculation method, the period for which it applies, and any applicable cap. It should be noted that the court may adjust agreed compensation in circumstances specified by the Civil Transactions Law, and compensation is not payable where it is established that no damage occurred.

This depends on the nature of the breach, the contractual terms, whether the breach can be remedied, any notice or cure period required before termination, and the relevant statutory provisions.

Suspension temporarily stops the performance of certain obligations while the contractual relationship generally remains in place. Termination ends the contractual relationship for the future in accordance with its terms and effects. The grounds, procedures, and consequences of each should therefore be clearly regulated.

To define the events covered, their effects on obligations, time, and costs, notice requirements, and whether they result in suspension, extension of time, or termination of the contract, as applicable.

Where general exceptional circumstances arise that could not reasonably have been anticipated and make performance excessively burdensome for the debtor, threatening substantial loss, the Civil Transactions Law provides mechanisms for negotiation and, where its conditions are satisfied, judicial intervention to restore the obligation to a reasonable level. There are also specific provisions concerning rebalancing in construction contracts.

It should identify the information covered, permitted use, persons to whom disclosure is allowed, exceptions, duration of the obligation, procedures for returning or destroying information, and consequences of breach.

The contract should identify ownership of pre-existing rights, ownership of works or rights developed during performance, and the scope, duration, modification rights, and reuse rights relating to licenses.

Because transferring rights or obligations or assigning performance to a third party may change the level of risk and expected performance. The contract should therefore specify approval requirements, limitations on assignment or subcontracting, and their legal and contractual effects.

It should be designed according to the nature of the transaction rather than using a standard wording. It may specify negotiation or mediation stages followed by litigation or arbitration. Where arbitration is selected, the institution, seat, language, number of arbitrators, and applicable law should be specified.

If the contract specifies a prevailing language in the event of a conflict, that version will prevail. If no such provision exists, the contract should be interpreted to determine the parties’ intent, without assuming that one language takes precedence merely because of the language used. If the dispute is before a Saudi court, proceedings are conducted in Arabic, and certified Arabic translations must be provided for documents drafted in a foreign language, in accordance with Article (23) of the Law of Civil Procedure.