Contractual Risks and Dispute Escalation in Construction Firms Lacking Dedicated Contracts and Claims Management Team

Many construction companies operate without a dedicated contracts management team, exposing them to severe contractual risks and disputes. Assigning such a team is often perceived as a dispensable luxury that increases costs and lessens profit—until the absence of such expertise proves more costly. This paper presents a case study examining the contractual and dispute resolution challenges faced by an mechanical, electrical, and plumbing (MEP) subcontractor in Saudi Arabia, working under a fairly unbalanced subcontract with a contractor of higher contracts management expertise. Spotlighting the judgment in Tecnicas Reunidas v. Petroleum Chemicals and Mining Company (2025) England and Wales High Court (EWHC) 1785 (Comm), contract documents, project records, and interviews with managers and external legal advisors, the analysis identified key issues such as conflicts and discrepancies within the contract documents, tight time-barring provisions, and unclear and contradicting arbitration agreement. Disputes arose from disagreements on some projects’ execution processes to conflicts regarding the arbitration seat and the applicable governing law highlighted weak communication protocols and limited familiarity with alternative dispute resolution (ADR). It is concluded that the presence of a reliable proactive contracts management team plays a critical role throughout the contract life cycle, even during the tendering phase before signature. Lessons from this case study offer practical guidance for contractors willing to enhance dispute avoidance and resolution in similar cases.