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23 Feb 2023

Arbitration insights from Singapore - COVID-19 as a force majeure event in the construction industry - 1st 2023 edition

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In this first edition of Arbitration insights from Singapore in 2023, Singapore-based international arbitration partner Chris Bailey and the global international arbitration team examine recent developments in construction disputes.

The lead article examines the COVID-19 pandemic as a force majeure event in the construction industry – particularly in England and Wales, Singapore and the UAE. In other developments, the team takes a closer look at a recent report by King's College London on construction adjudication in the United Kingdom.

Lead article: COVID-19 as a force majeure event in the construction industry

In this first edition of Arbitration insights from Singapore in 2023, we examine the COVID-19 pandemic as a force majeure event in the construction industry.

While the construction industry has made significant efforts to address the impact of the COVID-19 pandemic with stakeholders on projects agreeing mutually acceptable solutions which do not necessarily fall within the strict confines of the construction contracts, it is expected that an unparalleled level of claims from developers, contractors and subcontractors will crystalise for years to come, as a result of the mounting financial losses experienced with many considering their entitlements either pursuant to a contract or a law.

One such contractual entitlement may be a force majeure declaration, and indeed many contractors and subcontractors have made such declarations in response to the difficulties caused by the COVID-19 pandemic. We therefore consider the latest position on force majeure in England and Wales, Singapore and the UAE. Click here for the full article.

Other developments: 2022 report on construction adjudication: tracing trends and guiding reform

In October 2022, the Centre of Construction Law & Dispute Resolution, King's College London, in collaboration with The Adjudication Society, published the 2022 Construction Adjudication in the United Kingdom: Tracing trends and guiding reform report (the "Report"). The Report is described as the first comprehensive survey of construction adjudication from the perspective of the users.

With adjudication in place in jurisdictions across the Asia Pacific region – including Australia, Malaysia, New Zealand and Singapore, – and the Act on the Settlement of Disputes regarding payment in construction currently at the public hearing stage in Thailand,- the findings of the Report will be of interest to those engaged in the construction industry in the region.

Of particular note, the Report finds that the leading causes of disputes are inadequate contract administration at 49%, changes made by the client at 46% and exaggerated claims at 43%. They are closely followed by the lack of competence of project participants at 41%. These four causes are the most common by a wide margin, exceeding other causes by at least 13%. Claims for extension of time are the most common head of claim by a wide margin at 73%. They are followed by final account claims at 51% and claims for interim payments at 49%. Click here for the full Report.

Construction practice: The firm's comprehensive global construction industry expertise

The firm's global construction practice is led out of its London headquarters. The practice is top tier ranked for Construction: Contentious in both the UK Chambers and Legal 500 directories and is described in the former as "a substantial construction practice with significant strength in representing major developers in the … infrastructure [and] energy … sectors".  

Beyond our London headquarters, the practice is global with Chris Bailey (onshore) and John Simpson (offshore) leading the Asia Pacific practice from Singapore. We have further construction partners based across our Dubai, Hong Kong, Paris and Seoul offices. Click here for our global construction brochure. 

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