Introduction
In recent times, the growth of complex infrastructure and energy ventures has elevated project finance into one of the most sophisticated financing structures in global commerce. Megaprojects involve multilayered contractual frameworks, extensive security packages, and diverse stakeholder commitments, combined with high risk and capital intensity. As a result, disputes frequently arise even where projects are carefully structured.
Disputes in such projects are inevitable, and certain issues recur in project finance arbitration, irrespective of the project type. This article identifies key flashpoints and outlines strategies for lenders, sponsors, and governments to achieve commercially viable resolutions. It highlights that aligning contractual safeguards with bankability is key to preventing disputes and maintaining project progress.
Common Triggers of Project Disputes: Delay, Default, Force Majeure, and Regulatory Change
Disputes in project finance transactions are usually caused by a handful of stress points that keep reappearing and are deeply embedded in construction and financing agreements.
One of these stress points is
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