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Case Overview

LexBerg was instructed in 2019 to represent a German engineering contractor in ICC arbitration proceedings against a Middle Eastern state-owned entity arising from the construction of a major infrastructure facility in the Gulf region. The contractor had completed a complex design-and-build contract, but the employer had withheld final payment certificates totalling €22.3 million, alleging defects in the mechanical and electrical systems, delays attributable to the contractor, and overcharging in respect of variations. The contractor disputed all three allegations and brought claims for the withheld sums plus €4.1 million in additional variation entitlements and prolongation costs.

The arbitration was seated in Paris under ICC Rules 2017, with a three-member tribunal. The governing law was English law, chosen by the parties in the contract. The proceedings were document-heavy — the document production process alone generated over 40,000 pages — and required LexBerg to manage bilingual German-English proceedings while simultaneously instructing specialist engineering and quantum experts whose evidence would be central to the outcome. The entire arbitration ran over four years from filing to final award.

LexBerg assembled a core team combining international arbitration specialists with construction law expertise, and retained technical experts with direct experience of the specific type of infrastructure facility at issue. This ensured that the technical rebuttal of the employer's defects claims could be presented in terms the tribunal could evaluate without requiring their own specialist knowledge of the facility's engineering systems.

Problem & Solution

The case required dismantling three independent employer allegations — defects, delay, and overcharging — each requiring its own expert evidence base and documentary record, while presenting a coherent affirmative case for the full withheld amount and the variation claims.

  • An accelerated document review process using document review technology processed 40,000+ pages within six weeks, identifying 23 key documents that directly contradicted the employer's account of the variation approval process.
  • A mechanical and electrical engineering expert conducted a site inspection and reported that the alleged defects were minor snagging items completed before the taking-over certificate, none meeting the contractual threshold for withholding payment.
  • A quantum expert report demonstrated that 68% of critical path delay was attributable to the employer's late provision of design approvals and site access, entitling the contractor to prolongation costs and relief from liquidated damages.
  • A nine-day oral hearing included cross-examination of the employer's witnesses and experts in both English and German, exploiting documented inconsistencies between their written statements and contemporaneous site records.
The Final Result

The ICC tribunal issued an award in favour of LexBerg's client of €21.8 million — representing 97% of the withheld payment amount — plus €3.4 million of the variation and prolongation costs claimed. The employer's counterclaim for defects damages and liquidated damages was dismissed in full. A substantial costs award was made in the client's favour. Enforcement of the award was completed in the relevant jurisdiction within nine months of issuance, with LexBerg coordinating local enforcement counsel throughout. The outcome ranks among the largest construction arbitration recoveries in LexBerg's international dispute resolution practice.

Case Details
Clients
Confidential
Category
International Arbitration
Date
March 20, 2023
Location
Frankfurt / ICC Paris

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