Delay claims are among the most common and contentious issues in international construction arbitration. Whether the project involves an industrial facility, a power plant, an infrastructure network, a data centre, or a residential complex, the reality is familiar to anyone in the industry: projects often take longer than expected.[1] When delays have significant financial consequences, which frequently occurs in major international projects, disputes often end up in arbitration. Arbitral tribunals must then determine who is responsible for the delay and who should bear the resulting costs. This is far from a straightforward task for any tribunal.
This note provides a short overview of delay claims in international arbitration. It explains what they are, why they arise so frequently, how they are analysed, which costs may be recovered, and the defences that are most commonly raised.[2]
What Are Delay Claims?
A delay claim arises when a contractor alleges that it has been delayed in completing the works and seeks contractual relief, usually an extension of time, compensation for prolongation, or both. Delays are common in large-scale international projects. They may be caused by design changes, coordination problems, late approvals, procurement difficulties, adverse weather, labour shortages, geopolitical events, or interventions by public authorities.[3] The question of why the project is late, including who is responsible for the delay and who should bear the associated costs, quickly becomes the central point of dispute.[4]
However, delay disputes are inherently complex and are often described as “messy” from a factual perspective.[5] The stakes are often very high, with claims that may reach tens or even hundreds of millions of dollars. Identifying the cause, or more often the combination of causes, is rarely a simple task.[6] Construction projects involve numerous separate or interrelated activities running at the same time, which makes it difficult to determine the impact that each individual activity had on the overall project duration. The task becomes more difficult when accurate contemporaneous project records are incomplete or unavailable. Leading commentators note that the success of a delay claim in arbitration depends on a thorough and detailed analysis of the contemporaneous evidence.[7] When such evidence is scarce or does not exist, building a convincing delay claim becomes even more challenging.
Legal Nature of Delay Claims and Procedural Framework
From a legal perspective, delay claims are, in essence, contractual claims. The starting point for every delay claim is the contract itself. Ideally, it sets the time for completion, identifies the events that may justify an extension of time or additional payment, and establishes the notice and programme requirements the contractor must follow. Standard forms such as FIDIC or NEC contracts typically contain detailed mechanisms for notifying delay, providing particulars, and assessing the impact on the programme.
Substantive applicable law then fills any gaps left by the contract and determines how contractual mechanisms are to be interpreted. It governs questions such as the enforceability of notice and time bar provisions, whether liquidated damages may be reduced if they are excessive, the duty to mitigate delay, the consequences of late variations or employer interference, and the treatment of force majeure and hardship.
There can be significant differences between the substantive laws that apply, and these variations may influence both entitlement and the financial consequences of delay. Common law jurisdictions tend to draw a clearer distinction between entitlement to additional time and entitlement to additional money, treating these as separate questions that must each be proven. An extension of time may be granted without any corresponding right to compensation, and each must be proven separately. Civil law systems, by contrast, tend to adopt a more unified approach to completion and acceptance, drawing on broader principles such as good faith, cooperation, and preservation of the contract’s economic balance.[8] In many civil law jurisdictions, doctrines such as decennial liability, hardship, and unforeseeable conditions operate as mandatory law and may adjust both time and price even where the contract is silent.[9] Despite these differences, both legal traditions recognise the importance of allocating delay risk clearly and adopting workable mechanisms for adjusting the completion date when delay events occur.
The procedural framework of the arbitration also shapes how delay claims are presented and proven in an actual arbitration. Document production is often important, given the volume of project records required for a complete delay analysis. Witness statements assist in explaining factual events and working practices, and help fill the documentary gaps. Expert evidence is usually essential to identify the critical path, evaluate causation, and quantify costs.
Finally, although not binding unless expressly incorporated, experts and tribunals commonly refer to recognised industry guidance, such as the SCL Delay and Disruption Protocol, as a means of evaluating delay methodology and good practice.[10]
Basic Concepts in Delay Analysis
Time for Completion and the Programme
Every project has a contractual completion date and a programme that sets out how the contractor intends to achieve it. The programme functions as the project timetable. It shows the sequence of activities, their durations, the logical links between them, and the key milestones that must be reached. Programmes are a living document and are often updated as the works progress, so the schedule included in the contract may look quite different only a few months later.[11]
The concept of “completion” varies between legal systems. In common law jurisdictions, completion is usually equated with practical completion, namely the point at which the works are fit for use (or purpose), notwithstanding minor outstanding defects. At this stage, liquidated damages typically cease to accrue, although the contractor remains bound to remedy defects during the defects liability period. Civil law systems ordinarily treat completion and acceptance as a single, formal act of réception. Acceptance triggers warranty periods, including, in many jurisdictions, the decennial liability regime.[12] Unlike common law, civil law often does not distinguish between “practical” and “substantial” completion; the decisive moment is the employer’s formal acceptance, which determines when risk transfers and when post-completion liabilities begin.[13]
Delay Events: Who Is Responsible?
Delay events are usually classified into three categories:
- Employer Delay – examples include late design approvals, instructions changing the scope of work, lack of site access, and delays by other contractors. These typically entitle the contractor to time and possibly costs.[14]
- Contractor Delays – These include insufficient resources, poor planning, errors in design or workmanship, or late mobilisation. Such delays do not entitle the contractor to time or compensation and may trigger liquidated damages.[15]
- Neutral Delay – These are outside both parties’ control, such as force majeure, extreme weather, pandemics, or political unrest. Contracts differ on whether neutral events entitle the contractor to time or money.[16]
In practice, it is important to distinguish between excusable delays, which entitle the contractor to an extension of time, and compensable delays, which additionally give rise to monetary recovery. An event may provide time but not money, depending on how the contract allocates the relevant risk. Neutral events, such as adverse weather, are sometimes referred to as “non-compensable Employer Risk Events”.[17] Standard forms such as FIDIC and NEC contain detailed clauses governing delay events and extensions of time.
Extensions of Time (EOTs)
If a delay event affects the critical path (the sequence of activities controlling the project’s overall duration), the contractor may be entitled to an EOT. An EOT moves the completion date and protects the contractor from liquidated damages. The logic is simple: an employer cannot benefit from its own delaying actions. EOT provisions, therefore, preserve the employer’s right to impose liquidated damages for contractor delay, while preventing the completion date from becoming “at large”, in which case the contractor would only be required to finish within a reasonable time.
The Critical Path
The critical path is the backbone of any delay claim. It represents the longest chain of activities that determines the earliest possible completion of the works.[18] If an event affects an activity that is not on the critical path, or one that has float, it will not delay the overall project. Identifying the as-built critical path is often one of the most contentious aspects of delay analysis, because programmes change over time, activities move in and out of criticality, and experts may reach different conclusions based on the same contemporaneous data.[19]
Why Delay Analysis Is Difficult in Arbitration
Delay disputes are among the most complex issues that tribunals encounter in construction arbitration. There are three principal reasons for this:
First, construction projects generate an enormous volume of data, including correspondence, drawings, instructions, change orders, progress photographs, daily logs, monthly reports, minutes of meetings, inspection records, and often dozens or hundreds of programme updates. Reconstructing events from these contemporaneous documents requires establishing an accurate timeline and determining how the individual events interacted.
Second, there is no single, universally accepted method for analysing delay. Both the SCL Delay and Disruption Protocol and industry practice recognise several different techniques. Experts may reach opposite conclusions because they rely on different programme updates, interpret logic links differently, select different analytical windows, or adopt prospective, retrospective, or hybrid approaches. These methodological choices can lead to very different outcomes, even when experts analyse the same project data.
Third, delay analysis often intersects with several legal doctrines, the application of which varies significantly between jurisdictions. Issues such as concurrency, where employer and contractor delays overlap, may be addressed differently depending on the governing law and the contract. Strict notice provisions may bar or limit claims if notices are late or incomplete. The prevention principle may excuse delay where the employer has impeded progress, while the duty to mitigate requires both parties to take reasonable steps to reduce the effects of delay. Global claims, where causation is not clearly linked to specific events, are also treated with varying degrees of caution in different legal systems.
These legal considerations affect both entitlement and quantum. Because findings on delay determine whether liquidated damages may be applied and whether the contractor may recover prolongation or other costs, the interaction between the factual analysis and the applicable law is often decisive.
Delay Analysis and the Role of Expert Evidence
The goal of delay analysis is to determine the impact of a delaying event on the critical path. The critical path is defined as the “longest sequence of activities through a project network from start to finish”, the sum of whose durations determines the overall project duration. A delay to any activity on this path is a “critical delay”.[20] Experts may apply the critical path method prospectively, to forecast the effect of potential delays, or retrospectively, to determine what actually occurred. Retrospective analysis is the approach most commonly used in arbitration.
Several methodologies are widely recognised in practice, including the following:[21]
- As-planned vs As-built: compares the baseline programme and its updates with actual progress over sequential periods, often referred to as windows. It is a retrospective method and is particularly relevant where a contract has been terminated, as it focuses on the events that actually caused delay.[22]
- Time Impact Analysis: involves modelling the effect of a delaying event at the time it occurred by inserting a fragmentary network into the programme to show the impact on completion.
- Time slice/windows analysis: divides the duration of the work into defined periods (windows) and evaluates the critical path and any delay within each period.
- Retrospective longest path: seeks to identify the actual critical path by working backwards from completion through the as-built record.
- Collapsed as-built: removes specific delaying events from the as-built programme to estimate when completion would have occurred in their absence.
Experts must demonstrate that their chosen methodology is appropriate, having regard to the reliability of contemporaneous records, the agreed baselines, the contractual framework, and the characteristics of the delay events.
Causation and the Problem of Global Claims
Proving causation is another very difficult aspect of a delay claim. The contractor must demonstrate that a particular event occurred, that it delayed specific activities, that those activities lay on the critical path, and that the resulting delay produced measurable loss. Establishing this chain of cause and effect requires detailed factual and technical analysis, and gaps in the evidence can quickly undermine a claim.
Tribunals treat global or total cost claims with particular caution. These claims group multiple delay events together without clearly explaining how each event contributed to the overall delay or loss.[23] Such claims are not automatically inadmissible, but the contractor must still prove that the relevant events occurred, that they were employer risk events, that they caused critical delay, and that delays attributable to the contractor have been separated out. If the contractor cannot disentangle Employer-responsible delay from its own underperformance or other unrelated causes, a global claim is likely to be significantly reduced or rejected.
Recoverable Costs in Delay Claims
Once entitlement to an extension of time is established, the contractor may then seek compensation for the financial consequences of excusable delay, although entitlement to an extension of time does not itself confer any entitlement to payment. Delay claims commonly include several distinct heads of loss:
- Prolongation costs – arise when the contractor must remain on site longer than planned. Recoverable costs may include site overheads, preliminaries, supervision, equipment, utilities, financing charges, head office overheads, and loss of profit.[24] The precise categories depend on the governing law. The contractor must demonstrate that these costs were caused by employer-responsible delay rather than its own inefficiencies.
- Disruption costs – Disruption concerns reduced productivity, even where the contractual completion date does not move. It reflects the efficiency with which the contractor is able to perform the works. Causes may include late information, resequencing, lack of coordinated access, or cumulative small impacts. Tribunals typically expect evidence comparing planned and actual productivity, with measured mile and earned value analysis often viewed as the most persuasive approaches.[25]
- Acceleration costs – represent the cost of expediting the works to overcome delay or meet contractual deadlines. The contractor must show that acceleration was instructed or reasonably necessary and that the costs flow from Employer-responsible delay.
Each of these categories requires proof of a causal link between the delaying event and the loss claimed. Establishing cause and effect is often challenging and usually requires detailed factual and expert evidence.
Most Common Defences to Delay Claims
Employers frequently challenge delay claims by arguing that the contractor contributed to its own delay. This may arise from inadequate resourcing, late mobilisation, poor planning, or inefficient site management. Where the evidence shows that both parties were responsible for the delay, tribunals may reduce or deny entitlement to additional time or to compensation.
Concurrency is another common defence. When employer and contractor delays overlap on the critical path, many legal systems allow an extension of time but refuse compensation for prolongation if the contractor’s own delay would have kept it on site in any event. The precise consequences of concurrent delay depend heavily on the contract wording and the applicable law.[26]
Failure to give proper notice is also often raised. Many contracts require prompt notification of delay events, and employers may argue that late or incomplete notices bar or limit claims. Although the strictness of enforcement varies between jurisdictions, timely notice is generally regarded as essential.
Employers may also contend that the contractor failed to mitigate the delay. Claims may be weakened if the contractor did not take reasonable steps to maintain progress, for example, by using available work fronts, allocating adequate resources, or coordinating work efficiently. Similarly, claims for acceleration costs may be rejected if the contractor acted unilaterally without proper instruction or agreement.
Conclusion: Navigating Delay Claims
Delay claims in international arbitration turn on clear facts, strict adherence to contractual procedures, and a persuasive analysis of how specific events affected the critical path. Although determining responsibility is complex, established industry guidance and careful expert analysis assist tribunals in making sense of competing narratives. Ultimately, the contractor or employer must demonstrate, with precision, how the events for which the other party is responsible impacted the project timeline and any resulting costs.
[1] J. Jenkins, International Construction Arbitration Law (3rd edn., January 2021), §10.01.
[2] For an overview of the financial aspects of construction disputes, including cost allocation in arbitration, see Aceris Law’s Costs of Construction Arbitration.
[3] J. Jenkins, International Construction Arbitration Law (3rd edn., January 2021), §10.01.
[4] For a broader discussion of the underlying causes of construction disputes, see Aceris Law’s Managing Construction Disputes: Understanding the Causes.
[5] J. Bailey and A.J. Roquette, Chapter 5: Evidence in Construction Disputes, B. Delay, in A.J. Roquette and T.C. Pröstler (eds.), International Construction Disputes: A Practitioner’s Guide (2021), para. 2.
[6] Ibid.
[7] J. Jenkins, International Construction Arbitration Law (3rd edn., January 2021), §10.03.
[8] See C. R. Seppälä, The FIDIC Red Book Contract: An International Clause-by-Clause Commentary, Chapter II: Applicable Law (April 2023), pp. 45-158.
[9] See C. R. Seppälä, The FIDIC Red Book Contract: An International Clause-by-Clause Commentary, Chapter II: Applicable Law (April 2023), pp. 45-158.
[10] R. Gibson, Construction Delays, Extensions of time and prolongation claims (2nd edn., 2008), pp. 17-18.
[11] J. Doe and D. Kim, Delay in Construction Claims, Korean Arbitration Review, Issue 5 (31 May 2015), p. 46; J. Jenkins, International Construction Arbitration Law (3rd edn., January 2021), §10.02.
[12] See C. R. Seppälä, The FIDIC Red Book Contract: An International Clause-by-Clause Commentary, Chapter II: Applicable Law (April 2023), pp. 45-158.
[13] See C. R. Seppälä, The FIDIC Red Book Contract: An International Clause-by-Clause Commentary, Chapter II: Applicable Law (April 2023), pp. 45-158.
[14] J. Bailey and A.J. Roquette, Chapter 5: Evidence in Construction Disputes, B. Delay, in A.J. Roquette and T.C. Pröstler (eds), International Construction Disputes: A Practitioner’s Guide (2021), para. 25.
[15] Ibid.
[16] Ibid.
[17] Id., paras. 84-85.
[18] Id., para. 44; J. Jenkins, International Construction Arbitration Law (3rd edn., January 2021), §10.03.
[19] Id., paras. 44-45; J. Doe and D. Kim, Delay in Construction Claims, Korean Arbitration Review, Issue 5 (31 May 2015), para. 46.
[20] J. Bailey and A.J. Roquette, Chapter 5: Evidence in Construction Disputes, B. Delay, in A.J. Roquette and T.C. Pröstler (eds.), International Construction Disputes: A Practitioner’s Guide (2021), para. 44.
[21] J. Jenkins, International Construction Arbitration Law (3rd edn., January 2021), §10.03 [A].
[22] Id., §10.03 [B].
[23] For more information, see Aceris Law’s Global Claims in Construction Arbitration.
[24] For more information, see Aceris Law’s Prolongation Claims in Construction Arbitration: Heads of Costs That May be Claimed.
[25] For further details, see Aceris Law’s Disruption Claims in International Arbitration.
[26] V. A. Ramsey, Chapter 9. Problems of Delay and Disruption Damages in International Construction Arbitration in Y. Derains and R. Kreindler (eds.), Evaluation of Damages in International Arbitration, ICC Dossier Series, Vol. 4 (ICC Institute of World Business Law, 2006), pp. 199-200; J. Bailey and A.J. Roquette, Chapter 5: Evidence in Construction Disputes, B. Delay, in A.J. Roquette and T.C. Pröstler (eds.), International Construction Disputes: A Practitioner’s Guide (2021), paras. 67-71.