This Comparative Note is intended to give an overview of the insolvency regimes across the key jurisdictions in the region being Bahrain, Oman, Qatar, the UAE and Saudi Arabia, in relation to the effect of contractor insolvency on a construction project.

None of the jurisdictions have insolvency laws which specifically relate to the construction industry therefore this Comparative Note will review each jurisdiction's relevant insolvency law (where applicable) and apply the law to the region's standard construction industry practices.

A prevalent theme in construction contracts is the scenario whereby a main contractor and/or subcontractor endeavours to progress works against a backdrop, which seemingly indicates it is operating within a fragile financial environment. That environment generally derives from late or non-payment and/or cash flow restrictions. Such entities may have been in that predicament during the tender phase only to see it exacerbated once the contract was awarded. Alternatively, the main contractor and/or subcontractor came into the project with a healthy financial backdrop only to be hindered by events arising during the contract term. All too often, they will be permitted or compelled to carry on, neither of which is commercially conducive to a successful project.