Construction Adjudication: Protecting Cash Flow and Project Momentum in Fast-Moving Projects
Introduction
The construction industry is one of the most dynamic economic sectors in the UAE and wider Gulf region, characterised by ambitious timelines, complex contract structures, and high financial dependencies. With multiple subcontractors, evolving specifications and demanding project schedules, disputes are almost unavoidable. Issues such as delayed payments, variations, extension-of-time claims and defect concerns can easily disrupt progress and strain cash flow. Traditional dispute mechanisms often cannot keep up with the pace of construction. Litigation is slow and expensive; arbitration, although faster, can still take months or years to conclude. When project momentum and financial stability are at risk, parties require a dispute resolution method that delivers clarity quickly.
Construction adjudication serves precisely this need. As a fast-track process designed specifically for construction disputes, adjudication provides interim binding decisions that enable cash flow to continue, projects to progress and uncertainty to be minimised.
Why Adjudication Matters
Adjudication has become essential because:
- It delivers decisions within strict deadlines—often 28 days
- It protects contractor cash flow
- It resolves disputes without stopping work
- It provides clarity on technical issues
- It is more cost-effective than arbitration
- It maintains project momentum
This process ensures disputes do not jeopardise project delivery.
How Construction Adjudication Works
Notice of Adjudication
The party refers the matter by issuing a formal notice.
Appointment of Adjudicator
A technical expert is appointed rapidly to maintain the strict timeline.
Submission Exchange
Parties exchange key documents under an accelerated procedure.
Decision Issuance
The adjudicator delivers a reasoned, interim binding decision that remains effective unless revised later.
Scenario Example
A contractor experienced payment delays that threatened project continuity. Through adjudication, a specialist reviewed evidence swiftly and restored cash flow through an interim binding decision—protecting both project momentum and the contractor’s financial stability.
Expert Insights
Adjudication is powerful because it:
- Prevents project standstills
- Encourages timely payment
- Focuses on technical accuracy
- Limits cost escalation
- Provides clarity for ongoing works