Saudi Arabia is building at a pace few countries can match. Flagship Vision 2030 “giga-projects” such as NEOM, Diriyah and the King Salman International Airport are propelling the Kingdom toward becoming the world’s largest construction market by 2028, with output forecast to reach nearly $181.5 billion annually. Add in Expo 2030 and the FIFA World Cup in 2034, and the result is a pipeline of works of unprecedented complexity and ambition.

But the speed and scale of delivery are producing a parallel surge in disputes. Hamed bin Hassan Mira, CEO of the Saudi Center for Commercial Arbitration (SCCA) said that construction already accounts for a substantial share (30%) of its caseload, with awards enforced swiftly through Saudi courts. Against this backdrop, litigation funding and top-tier disputes counsel are becoming indispensable tools for contractors and asset owners alike, enabling them to pursue claims or mount defenses without derailing capital programs.

Amid this wave of disputes, one issue is proving particularly contentious: Notices.

The notice question

Notices—whether given, withheld, or delayed—are the procedural lifeblood of FIDIC contracts. They are also a growing battleground in Saudi disputes.

FIDIC contracts — the international industry standard — are clear. Miss the 28-day notice window under Sub-Clause 20.2.1, and the claim is gone. Related clauses, such as Sub-Clause 3.7 (Engineer’s determinations) and Sub-Clause 8.4 (Extension of Time), tie relief to timely notice. English case law has historically enforced these provisions strictly, with decisions such as Bremer Handelgesellschaft v Vanden Avenne and Obrascon Huarte Lain SA v HMAG Gibraltar underscoring the point.

Yet Saudi law is not English law. The Saudi Civil Transactions Law (CTL), which came into effect last year, introduces statutory duties that soften outcomes and recalibrate risk allocation.

Civil code meets contractual machinery

Three CTL provisions stand out for their interaction with FIDIC’s notice regime:

• Article 95: Good Faith: Parties must act in good faith in performing contracts. For contractors who tactically withhold notice, this cuts against them. But where employers already knew of disruption or delay, tribunals may find that enforcing a strict time-bar conflicts with good faith and undermines legitimate expectations.

• Article 470: Statutory Notice: Contractors must immediately notify employers if unit-based quantities significantly exceed expectations. This statutory obligation overlaps with FIDIC Sub-Clause 12.3 (Evaluation of Work) and Sub-Clause 13.1 (Right to Vary). Compliance with Article 470 may give contractors a defense against time-bar arguments. Failure under both regimes, however, compounds risk.

• Article 471(3): Exceptional Circumstances: Tribunals may restore contractual balance when extraordinary events disrupt performance — for example, pandemics, embargoes or regulatory changes. Relief can include extensions of time, adjusted fees or termination with compensation. This provision aligns with FIDIC Clause 18 (Exceptional Events) and Sub-Clause 13.7 (Changes in Legislation), but provides a statutory pathway where enforcing strict notice rules would be disproportionate.

The effect is significant: Saudi tribunals are now tasked with balancing FIDIC’s procedural precision against statutory duties that emphasize fairness and proportionality.

Comparative practices in the Gulf

Although Saudi Arabia’s CTL is new, insights can be drawn from other Gulf jurisdictions where civil codes have long intersected with FIDIC contracts:

• Dubai: Courts have enforced notice provisions as true conditions precedent (Panther Real Estate Development v Modern Executive Systems Contracting), but arbitral practice has sometimes softened outcomes under good faith principles, especially where employers engaged substantively with late claims.

• Qatar: The Qatari Civil Code restricts contractual curtailment of statutory rights. Tribunals have used good faith and proportionality to prevent disproportionate loss from minor notice failures, sometimes granting partial rather than total relief.

• Kuwait: Arbitral practice emphasizes proportionality. Late notice may reduce recovery but rarely extinguishes claims altogether unless real prejudice is shown.

The emerging Gulf pattern is consistent: clarity of drafting matters, but civil code doctrines prevent employers from leveraging procedural defaults into windfalls. Saudi tribunals are likely to adopt a similar approach.

Strategic implications for Saudi Arabia

For contractors and asset owners, the stakes are high. Billions of dollars may turn on whether a notice was given on time, whether an employer already knew of an event or whether tribunals interpret statutory duties as tempering contractual machinery.

1. Clarity of drafting remains decisive—when FIDIC clauses clearly stipulate that notice is a condition precedent, tribunals generally enforce them.

2. Employer knowledge and conduct can override strictness—where the employer knew of the delay or treated late claims on their merits, tribunals have sometimes found that it would be inconsistent with good faith to rely on a time-bar.

3. Civil code principles temper outcomes—good faith, abuse of rights and proportionality doctrines have softened strict enforcement in Qatar and Kuwait, leading to outcomes where late notices reduce but do not entirely extinguish claims.

Success in this environment depends first on discipline. Maintaining rigorous contemporaneous records of notices, employer knowledge and causation is essential to protect entitlements. Parties also need to think in dual terms, ensuring contractual notice obligations are aligned with statutory duties under Article 470, rather than treating them as separate tracks. Where employers had actual awareness of disruption, that knowledge should be marshalled as a defense against attempts to rely on strict time-bars.

Drafting practices also require a recalibration for the Saudi market. FIDIC and statutory regimes should be harmonised through dual-track notice clauses, and contracts should include non-exhaustive examples of exceptional circumstances to guide tribunals. Provisions that acknowledge employer knowledge as relevant to prejudice can further temper disputes, while technology — from BIM data to daily site logs and contemporaneous correspondence — should be deployed systematically to build evidential narratives.

The result is a case strategy that is not only legally robust but also attuned to the statutory principles now shaping the Saudi market.

Disputes on a global stage

Saudi Arabia’s construction disputes are set to multiply in step with its giga-projects. For tribunals, the challenge will be reconciling FIDIC’s strict precision with statutory principles of fairness and proportionality under the CTL.

The Kingdom offers a historic opportunity for legal finance to support disputes at scale, while law firms must craft pleadings that tribunals can trust by weaving together contractual machinery, statutory obligations and evidential narratives. Treating the CTL as an ally to disciplined case-building is essential; with rigorous notice compliance and well-framed statutory arguments, the system is capable of managing disputes on a large scale.

Disputes at this magnitude are inevitable, but tribunals will reward parties who align FIDIC mechanisms with CTL principles. Saudi Arabia’s market is not only vast but also institutionally ready to deliver principled outcomes. Contractors and employers alike can now approach disputes with tools that preserve capital while securing fair and reliable results.