Resolving Disputes Arising from PPP Contracts on Seawater Desalination Plants: The Independent Expert as the Most Effective Means

Abstract

Water scarcity has prompted the exploration of new drinking water sources, which explains the growing interest in seawater desalination. Nevertheless, such projects are often very costly, placing a heavy burden on government budgets. In this regard, public–private partnerships (PPPs) have emerged as a proposed solution to reduce the financial strain on the concerned country. Here, the contract serves as a mechanism to regulate the relationship between the public entity and the private sector. Notably, PPP contracts for seawater desalination plants are predominantly characterized by their technical nature because these plants are essentially industrial in scope. Consequently, many disputes arising from the execution or interpretation of clauses within these contracts stem from technical issues. Given the inadequacy of the national jurisdiction to handle such disputes—particularly because the private party in these partnerships is often a national or foreign company—a methodology distinguishing between alternative dispute resolution (ADR) methods and independent expertise, based on technical considerations, is necessary. This study concludes that incorporating the requirement to resolve disputes through an independent expert specializing in seawater desalination plants, under this technical type of contract, is the most effective means to ensure the continuous implementation of such contracts. From a contractual perspective, the involvement of the independent expert must be ensured throughout the contract’s term, beginning from the negotiation stage regarding the contract clauses. The expert should also be empowered to oversee the contract’s implementation by being equipped with a system that monitors risks inherent in PPP contracts, integrated within a framework that is compatible with smart contracts and artificial intelligence. This would enable the expert to issue a fair resolution that provides accurate technical answers, which are more likely to be accepted by both parties to the dispute. This contractual approach, which emphasizes both the freedom of the contracting parties and the technological advancements related to contract law, must be bolstered by legislative efforts. National laws should provide a dedicated regulatory framework for independent expertise as an ADR method. This article aims to provide a theoretical and practical study, offering insights for researchers and practitioners regarding the identified problem herein.