Liquidated Damages for Delay in the Middle East: Not Etched in Stone

Abstract

Liquidated damages in construction contracts represent a fixed-rate mechanism to compensate employers for delays by contractors.Traditionally, common law courts do not interfere with the amount of liquidated damages due. By contrast, the local courts of certain civil law jurisdictions in the Middle East are empowered to adjust those liquidated damages, which raises important questions about how and when those courts will exercise that power and whether international arbitral tribunals will do the same.