Case Study 5
Dispute Resolution

Project: The engineering, procurement and construction of the 46” Baku Tablisi Cheyan oil and 42” South Caucasus gas pipeline in the Republic of Georgia.

Value: Multi million dollar 4 year project.

Client challenge: Contractual dispute and financial exposure as a result of non performance by a subcontractor, and a projected schedule overrun of around 2 years, with forecast outturn costs almost double the original budget.

Rhead role: To improve overall cash flow we ensured valid entitlements were appropriately presented and prepared an ‘arbitration-ready’ format claim for delay and disruption in the event that negotiated settlement was not achieved. The Rhead Group also provided expertise to monitor subcontractor progress and tackle issues on a daily basis. They ensured the timely issue of notices and compiled contemporaneous records to rebut any future subcontractor claims.

Benefits: Our client secured a negotiated final settlement prior to the completion of works. As part of this settlement we also amended the last 10% of the main lump sum contract to a reimbursable form under which the works were completed at cost, effectively from our client. The quality of the Rhead Group records and legal expertise then successfully defended the subcontractor’s claim and reduced its scale from more than double the original subcontract price to 20% of the submitted claim value, also avoiding costly legal fees that would otherwise have been incurred by our client.