Can You Claim Damages for Project Delays in Bahrain Construction Contracts?
In Bahrain’s construction industry, project delays are common but their legal consequences can be costly. Whether caused by late approvals, material shortages, scope changes, or labor disruptions, delays often result in financial losses, strained relationships, and even legal disputes.
The key question is: can you claim compensation for these delays? The answer depends on your contract terms, documentation, and the legal approach you take.
In this blog, we explain when and how damages for project delays can be claimed under Bahraini law, what contractors and developers need to prove, and how lawyers help navigate these claims effectively.
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What Are Delay Damages?
Delay damages refer to financial compensation claimed when a party fails to meet the agreed project timeline. These claims can take two primary forms:
- Liquidated Damages: A fixed amount agreed in advance per day of delay
- General Damages: Actual losses suffered as a result of the delay (e.g., rental losses, financing costs, penalties)
For either type to succeed, the affected party must show that the delay was caused by the other party’s breach or failure and not by external or excusable factors.
Legal Basis for Delay Claims in Bahrain
Under Bahraini civil law and standard construction contracts like FIDIC, delay claims are enforceable if the contract:
- Clearly defines timelines and completion dates
- Specifies penalties or compensation mechanisms
- Outlines procedures for notifying and documenting delays
If the delay results in quantifiable loss, and was not caused by force majeure or third-party actions, the injured party has the right to file a claim and pursue compensation.
Common Grounds for Delay Claims
You may be entitled to damages for delay if:
- The contractor failed to meet the project deadline without valid excuse
- There was no approved extension of time (EOT)
- The delay caused financial losses (e.g., missed opening date, late handover)
- Your contract includes a penalty clause or permits compensation claims
Likewise, a contractor may claim for delays caused by the project owner, such as:
- Late approvals or design changes
- Restricted site access
- Delays in payments
- Failure to provide materials or instructions
What You Need to Prove
To succeed in a delay claim, you must prove:
- That a binding contractual deadline was missed
- That the delay was caused by the other party
- That the delay caused real, measurable losses
- That you followed the correct legal and procedural steps (such as giving timely notice)
Documentation is essential this includes project schedules, email communication, variation orders, daily logs, and financial records.
Example:
In a commercial development project, the completion date was fixed in the contract, with liquidated damages of BD 1,000 per day of delay. The contractor failed to finish on time, citing labor shortages. However, the employer found that the delay was caused by the contractor’s failure to order materials early and by mismanagement of site scheduling.
A lawyer was engaged to review the timeline, contract terms, and daily reports. After analyzing the evidence, the lawyer submitted a formal claim on behalf of the project owner. The contractor disputed the amount, but since no extension of time had been formally requested or granted, and the delay was proven to be within the contractor’s control, the parties reached a negotiated settlement with partial damages paid to avoid litigation.
This example illustrates how a legally structured delay claim, supported by proper documentation and legal advice, can result in compensation without resorting to court.
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Tips for Project Owners Claiming Damages
- Ensure your contract includes a clear completion date and a liquidated damages clause
- Keep daily site logs, photographic evidence, and progress reports
- Issue timely notices if delays occur
- Document how the delay impacted your finances or project delivery
- Engage a lawyer early to structure your claim properly
Tips for Contractors Responding to Delay Claims
- Track potential delays from the start
- Request extensions of time (EOT) formally and in writing
- Keep a record of site disruptions, variation orders, or late approvals
- Communicate consistently with the consultant or engineer
- Seek legal advice before responding to a formal claim
In our previous blog on How to Handle Late Payments in Construction Projects in Bahrain